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Millionaires don't feel so rich: survey

The wealthy no longer feel as flush, as their value dips along with the economy, says a Fidelity survey.

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By Aaron Smith, CNNMoney.com staff writer

How strong are the nation's 19 largest financial institutions?
  • All the major ones are fine
  • Most of them are fine, with a couple of exceptions
  • There are widespread problems in the system

NEW YORK (CNNMoney.com) -- Who wants to be a millionaire when nearly half of them don't even feel rich, according to a survey released Wednesday.

Some 46% of the 1,012 participants in the annual Fidelity Investments study said they "do not feel wealthy and are taking action to reassess and rebuild their wealth."

That's a big change from last year, when only 19% said they didn't feel rich. Fidelity blamed the drop on the corresponding plunge in wealth, with an average 19% reduction in household income and investable assets, and a 28% plunge in real estate holdings.

Fidelity, a Boston-based financial services company, described the average respondent as having $3.5 million in assets and $306,000 in annual household income.

The millionaires reported various ways in which they're adjusting portfolios amid the recession. The bearish types are dumping more of their money into fixed-income securities, while the bulls are buying more stocks, according to Fidelity.

Michael Durbin, president of Fidelity Institutional Wealth Services, said in a statement that most investors "become gripped by inertia during a market downturn," unlike millionaires, who draw upon past experiences from past recessions to make "tough decisions about their portfolios" and "get their finances back on track."

The average age of a millionaire is 59, Fidelity said, which means that most of them are old enough to have survived the last four recessions, beginning with the first oil crisis of the 1970s. Most of the millionaires, some 77%, said they've never seen it as bad as it is now.

Optimism has its rewards. Millionaires who use a financial downturn as a buying opportunity tend to be richer than their less optimistic peers, averaging $1 million more in assets, Fidelity said.

Other findings from the survey showed that about two-third of the respondents consider the U.S. as the most promising country to invest in, with China coming in second.

Millionaires rated the economy as "very weak," but expect to see the economy improve in 2010, led by a stock market rebound.

And most of them expect taxes to go up in the next five years, with 72% expecting higher capital gains taxes, 67% expecting a higher dividend tax rate, and 62% expecting a higher federal income tax rate. To top of page

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