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The Making of a Millionaire: a National Survey On Wealth; Affluent Americans Fear Financial Losses Even as They Express Confidence About the Future.

Business Editors

BOSTON--(BUSINESS WIRE)--July 10, 2001

Survey by Fidelity Investments(R) and Ernst & Young LLP Reveals

How the Wealthy Feel About Their Money

Do the rich bask in their wealth, or do they worry they could lose it all? National survey findings released today by Fidelity Investments(R) and Ernst & Young LLP reveal that although affluent Americans generally feel confident about the future, they can't shake the fear of suffering a serious financial setback.

The Making of a Millionaire tracks the attitudes and behaviors of affluent Americans defined as: Today's Millionaires who have at least $1 million in liquid(1) assets; Up and Comers who have at least $500,000 in assets and are younger than age 40; and Working Wealthy who have at least $1 million in their workplace retirement plan(2).

Nearly two-thirds (65 percent) of Today's Millionaires surveyed said they are concerned they could suffer a significant financial setback at any time. Those most concerned attributed their fear to a volatile stock market, excessive personal debt or poor performing stocks.

Among Up and Comers an even higher number -- 70 percent -- expressed concern about a serious financial loss. Those most worried based their fear on losing their job, excessive personal debt or a decline in the stock market, as a large portion of the wealth in this group was attributed to company stock.

The Working Wealthy were most worried. Three out of four, or 74 percent, were concerned about experiencing a significant financial loss, usually attributing this to a potential job loss, health issues or a downturn in the stock market.

"This survey gives us useful insight into America's wealthy, especially regarding how these investors view their wealth," said Daniel T. Geraci, president, Private Wealth Management, Fidelity. "We have seen an explosion in the number of wealthy Americans during the past several years due to a strong stock market and a good economy. As a result, we have seen an increased need to help our affluent investors understand the unique and complex financial issues they face in managing and preserving their wealth."

Today's Millionaires who reported they were less concerned about losing their money said their confidence was due to a well-diversified portfolio, while Up and Comers who were less concerned, based their confidence on investing for the long-term.

"This research takes a compelling snapshot of wealth and investment attitudes in today's uncertain economy," said David Voss, director of Executive and Individual Services for the Affluent Market, Ernst & Young. "The survey attests to the importance of one of the basic tenets of investment planning -- a diversified portfolio aligned with 'personal time horizon' -- that keep investors on course." An Optimistic Outlook

Although the survey was conducted in March 2001 when the stock market was somewhat volatile, the majority of those surveyed reported they were optimistic about their financial future, even though most reported some level of financial loss during the past year.

Seventy-seven percent of Up and Comers and 75 percent of Working Wealthy, who view their wealth based on their incomes and workplace retirement savings, respectively, said their financial situation was equal to or better than a year ago. When asked about their financial situation next year, 69 percent of Up and Comers and 60 percent of Working Wealthy expected to be better off.

Among Today's Millionaires, who view their wealth in terms of their investments, 65 percent said they are the same or better off financially this year compared to last year, and 55 percent expect their financial situation to improve next year.

Richard Day Research, Inc., conducted the survey with data collected by Harris Interactive. A total of 1,885 financial decision-makers who reported significant household assets were surveyed online between March 8 and 27, 2001.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services with custodied assets of $1.5 trillion, including managed assets of $914.2 billion. Fidelity offers investment management, retirement, brokerage and shareholder services to 17 million individuals and institutions as well as through 5,500 financial intermediaries. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual fund supermarkets and a leading online brokerage firm. Fidelity Investments' Web site is at www.fidelity.com.

About Ernst & Young

Ernst & Young, a global leader in professional services, helps clients to quickly and confidently make financial decisions designed to enhance value. Its 78,000 people in more than 130 countries have the industry and financial experience to provide fresh perspectives on operating successfully in the new economy. Ernst & Young offers traditional audit and tax services, as well as customized services in corporate finance, online security, risk management, the valuation of intangibles and e-business acceleration. In addition, legal services are available in various parts of the world where permitted. A collection of Ernst & Young's views on a variety of business issues can be found at www.ey.com/thoughtcenter.

Ernst & Young refers to the U.S. firm of Ernst & Young LLP and other members of the global Ernst & Young organization. For the second straight year, Ernst & Young was named the number one financial planning firm by Worth Magazine in its annual Readers' Choice Survey.

Fidelity and Ernst & Young are not affiliated.

Editor's Note: This is the first in a series that will release data from the survey.

(1) Liquid assets are defined as stocks, bonds, mutual funds, cash and IRAs -- homes, personal property, insurance or workplace retirement savings plans were not included.

(2) For most of Working Wealthy, the $1 million or more in their workplace retirement plan represents the majority of their total wealth.
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Publication:Business Wire
Date:Jul 10, 2001
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