Wealthy Americans better off than last yr; but still cautious

Wealthy Americans better off than last yr; but still cautious

According to the Merrill Lynch Affluent Insights Quarterly, a survey of the values, financial priorities and concerns of affluent Americans, during the last year, one in five affluent Americans have tapped into their long term savings and investments to meet immediate financial needs.

The top three reasons for dipping into their savings were to cover regular monthly expenses (35 per cent), pay down excess debt (27 per cent), and compensate for a loss in income within their family (19 per cent).

"The last couple of years have been a roller-coaster for many investors as they navigated through the recession and markets. While they believe the future may be getting brighter, many still struggle with the financial tug of war between near-term demands and future goals," said Sallie Krawcheck, president of Bank of America Global Wealth and Investment Management.

The survey further added that 41 per cent of affluent Americans indicate feeling financially better off today than they did one year ago and as many as 78 per cent respondent are confident that their personal financial picture will improve during the year ahead.

The latest survey found affluent Americans divided over their outlook for the US economy, with a quarter (26 per cent) optimistic that the economy will improve during 2011, another 25 per cent not optimistic, and the rest landing in the middle.

Paying off debt during the year ahead is another priority among the affluent, with 44 per cent expecting their debt to decrease in 2011.

However, many are unsure how debt and credit vehicles can be useful in their financial lives, with 39 per cent indicating they do not take full advantage of credit and lending options available to them, the survey added.