The View from Washington, D.C.:

Transcription

1 The View from Washington, D.C.: 1,000 residents share their perspectives on life in the Washington metropolitan area, the local economy and personal finances April 2015

2 Methodology What An online study among a sample of the general public was conducted by Koski Research. Koski Research is neither affiliated with, nor employed by, Charles Schwab & Co., Inc. When The study was fielded February 18 th March 1 st, Who 1,000 Washington, D.C. aged completed the study. The sample was drawn from online sample sources. The geographical area of the sample included all the Maryland, Virginia, and D.C. counties in the Washington, D.C. Metropolitan Statistical Area (MSA). Quotas were set to be representative of the Washington, D.C. area by gender and age. The margin of error for the total survey sample is three percentage points. Note: Unless noted otherwise Washington, D.C. and the D.C. Area refer to the Washington, D.C. area as defined above and Washingtonians refers to the residents of this area. Charles Schwab 1

3 Life in the Washington, D.C. Metro Area Charles Schwab 2

4 Four in 10 Washingtonians are lifers; most live in the suburbs Lived in Washington, D.C. for Entire Life Current Residence No 61% 6% Rural area near Washington DC 47% Suburbs of Virginia Yes 39% 30% 17% Suburbs of Maryland City of Washington DC Q1 Have you lived in the Washington, D.C. area all your life? (Do not count time you may have been away at school or in the armed services.) (Base: All Washington, D.C. = 1,000) Q2 Would you describe the area where you live as? (Base: All Washington, D.C. = 1,000) Charles Schwab 3

5 Washingtonians consider the D.C. metro area one of the best for the arts and dining, but one of the worst for cost of living How Washington, D.C. compares to other U.S. Metropolitan Areas One of the Best One of the Worst Neither One of the Best nor One of the Worst Arts and culture 80% 13% 3% 17% Food and dining 72% 5% 23% Employment rate 57% 12% 31% Quality of education 56% 14% 30% Quality of life 56% 7% 37% Public transportation 49% 17% 34% Housing market 34% 29% 37% Infrastructure: roads, highways, etc. 29% 27% 44% Crime rate 15% 31% 54% Tax Rates 14% 41% 45% Cost of Living 14% 60% 26% Q5 When you think about the top large metropolitan areas in the U.S., how do you think the Washington, D.C. area compares on each of the issues listed below? For each characteristic please indicate whether you think Washington, D.C. is One of the Best metropolitan areas or whether it is One of the Worst. (Base: All Washington, D.C.=1,000) Charles Schwab 4

6 Nearly one in four Washingtonians prefer to live in Old Town Alexandria, but cost is a prohibitive barrier Preferred Neighborhood of Residence Barriers to Living in Preferred Neighborhood: Old Town Alexandria Bethesda 12% 21% It's too expensive 65% Capitol Hill Chevy Chase 8% 7% The real estate options do not meet my needs 20% DuPont Circle Rockville 6% 6% It's too far from work 19% Crystal City Eastern Market 4% 2% It's too far away from family members / friends 13% Brookland Rosslyn 2% 2% The schools in the area are not high quality 5% Clarendon-Courthouse Ballston 2% 2% There's too much crime in the area 4% Foggy Bottom Navy Yard 1% 1% Other 7% Shaw Other 1% 22% Nothing - I currently live there 14% Q8 Q9 If money were no object, where in the Washington, D.C. area would you like to live? (Base: All Washington, D.C.=1,000) What is preventing you from living in (preferred place)? (Base: All Washington, D.C.=1,000) Charles Schwab 5

7 Washingtonians are happy with their quality of life, public schools and job opportunities, but think politicians could do more for local economy Agreement with Statements About Washington, D.C. Agree Disagree I m happy with my quality of life in Washington, D.C. Children can get a good education in the public schools in my area There are plenty of job opportunities in the D.C. area I feel good about the property values in my neighborhood The Washington, D.C. area has high quality public transportation I like Washington, D.C. more when Congress is out of session Crime is hurting the economy in the Washington, D.C. area Tax rates in my area are reasonable Overall cost of living in my area is reasonable Election day is my favorite day of the year Politicians do a good job making the local economy stronger 77% 77% 74% 72% 70% 67% 57% 45% 42% 31% 30% 23% 23% 26% 28% 30% 33% 43% 55% 58% 69% 70% Q13 Please indicate your level of agreement or disagreement with each of the statements below. (Base: All Washington, D.C. = 1,000) Charles Schwab 6

8 Residents give the D.C. area high marks for diversity and young professionals, but see it as less appealing for retirees and the middle class How Washington, D.C. is graded Washington, D.C. is a place Grade A Excellent B C D F Fail A/B (Net) That welcomes diversity 44% 36% 16% 2% 2% 80% For young professionals 42% 39% 15% 2% 2% 81% Where I can achieve my career ambitions 31% 40% 21% 5% 3% 71% Where a child can receive a good education 30% 37% 21% 7% 5% 67% That is business friendly for large companies located here 24% 40% 27% 6% 3% 64% For innovation 22% 39% 28% 7% 4% 61% For entrepreneurs - those seeking to start and own a business in the area 19% 40% 29% 9% 3% 59% To raise a family 18% 38% 31% 8% 5% 56% For the middle class 12% 31% 34% 16% 7% 43% To spend your retirement years 10% 21% 29% 22% 18% 31% Q16 How would you grade the greater Washington, D.C. area on each of the following? (Base: All Washington, D.C. = 1,000) Charles Schwab 7

9 One-quarter of employed Washingtonians plan to leave the area when they retire, though many are undecided Planned Retirement Residence Among employed Washingtonians Don't plan to retire 2% 24% Want to stay in same neighborhood in Washington, D.C. area Undecided 41% 8% Want to move to a different neighborhood in Washington, D.C. area 25% Want to move outside of Washington, D.C. area Q3 When you think about retirement, what are your plans for where you will live? (Base: Employed Washington, D.C. = 668) Charles Schwab 8

10 The Washington, D.C. Metro Area Economy Charles Schwab 9

11 Six in 10 Washingtonians say the D.C. metro area economy is better than the U.S. economy Washington, D.C. Economy Comparison to U.S. Economy Worse 7% Same 33% Better 60% Q7 If you were to compare the economy of the Washington, D.C. area to the economy of the United States overall, would you say Washington, D.C. s economy is (Base: All Washington, D.C. = 1,000) Charles Schwab 10

12 Washingtonians confidence about the economy is highest closest to home In Your Neighborhood View of the economy: In Washington, D.C. In the United States 36% 25% Becoming more prosperous 41% Becoming more prosperous/ staying the same (NET) = 53% Becoming more prosperous/ staying the same (NET) = 81% Becoming more prosperous/ staying the same (NET) = 77% 28% Staying about the same 40% 41% 31% Becoming less prosperous 11% 8% 13% 10% 16% Cannot say Q6 How do you view the economy a. In the specific area or neighborhood where you live, b. in the Washington, D.C. area, c. in the United States? (Base: All Washington, D.C.=1,000) Charles Schwab 11

13 Three in four feel that political gridlock in Washington ultimately hurts the national economy Impact of Political Gridlock on National Economy Has no effect Helps the national economy 10% 15% 75% Hurts the national economy Q11 Political gridlock in national government ultimately (Base: All Washington, D.C. = 1,000) Charles Schwab 12

14 Washingtonians believe national government leaders should focus on balancing the budget and tax reform above other issues Biggest Priority for National Government Leaders Balancing the national budget 22% Tax reform 17% The unemployment rate The minimum wage Cost of higher education 8% 9% 11% Student loan forgiveness Funding for safety net programs, such as Medicaid and welfare Wall Street regulation or reform Reforming social security 6% 6% 5% 5% Some other issue 11% Q12 If you had to choose, which of the following is the one topic or issue that national government leaders should be making the biggest priority? (Base: All Washington, D.C. = 1,000) Charles Schwab 13

15 Personal Finances in the Washington, D.C. Metro Area Charles Schwab 14

16 Washingtonians by far say local cost of living has the greatest impact on personal finance decisions, but a majority remain confident that they ll achieve their goals Impact on Making Personal Financial Decisions Confidence in Ability to Achieve Financial Goals Local area cost of living 40% U.S. economic outlook Local area housing market U.S. stock market volatility 7% 7% 16% 25% Very confident Global economic outlook 5% Local area employment rate U.S. interest rate environment 5% 4% 49% Somewhat confident U.S. unemployment rate 4% Local area tax rates Global political instability Other 4% 2% 6% 19% Not very confident 7% Not at all confident Q10 Which of the following factors or events have the greatest impact on how you make your personal financial decisions? (Base: All Washington, D.C. = 1,000) Q20 How confident do you feel that you will be able to reach your financial goals? (Base: All Washington, D.C. = 1,000) Charles Schwab 15

17 40 percent of Washingtonians say living in the D.C. area hurts their ability to achieve their financial goals Effect of Living in Washington, D.C. on Reaching Financial Goals Uncertain Doesn't affect my ability to reach my financial goals 21% 12% 27% Living in Washington, D.C. helps 40% Living in Washington, D.C. hurts Q21 Would you say that living in Washington, D.C. helps or hurts your ability to reach your financial goals? (Base: All Washington, D.C. = 1,000) Charles Schwab 16

18 Washingtonians prioritize saving for retirement and emergency funds, though cost of living and debt often stifle saving Top Three Savings Priorities Obstacles Preventing Saving Retirement 65% Cost of living in Washington, D.C. is too high 48% Emergency funds 57% I m paying off other debt 38% Vacation funds 32% College costs for my children 25% I m still paying off my student loans 17% Purchasing a home 22% I m not able to make money in the market 12% Medical expenses for family members 21% I feel like I need better financial advice 11% Purchasing a new car Milestone / celebration 16% 7% I m paying for my children to go to private school 6% Other 4% Other 9% Not saving for anything currently 8% Nothing is preventing me from saving for my financial goals 23% Q26 Which of the following are your top three savings priorities? (Base: All Washington, D.C. = 1,000) Q27 Which of the following obstacles prevent you from saving for your financial goals? (Base: All Washington, D.C. = 1,000) Charles Schwab 17

19 On average, Washingtonians feel that a net worth of $270K makes a person comfortable, while it takes $1.25M to be wealthy Net Worth to be Financially Comfortable Net Worth to be Wealthy Median = $270K 8% $2.5M + Median = $1.25M 21% $750K to <$2.5M 38% 24% 25% 16% 6% $250K to <$750K $100K to <$250K <$100K Prefer not to say 29% 19% 6% 4% 4% Q17 Q18 At what level of personal net worth would you say a person in the Washington, D.C. area could be considered financially comfortable? At what level of personal net worth would you say a person in the Washington, D.C. area could be considered wealthy? (Base: All Washington, D.C.=1,000) Charles Schwab 18

20 The majority of Washingtonians are like the tortoise: building wealth slowly and steadily Approach to Building Wealth I am not building wealth 22% I m more like the hare willing to take some risks to accelerate the process 21% 57% I m more like the tortoise saving and investing consistently over time Q19 How would you describe your approach to building wealth? Charles Schwab 19

21 Only 26 percent of Washingtonians have a written financial plan, and nearly a third do not have a plan at all Financial Planning Don't have a plan 27% Have a plan in writing 26% Have a financial plan (NET) = 73% Have a plan but not written 47% Q23 Do you currently have a financial plan? (Base: All Washington, D.C. = 1,000) Charles Schwab 20

22 Washingtonians are split on whether their finances have fully recovered from the 2008 financial crisis Effect of 2008 Financial Crisis on Finances Not sure 20% Finances have fully recovered 41% Finances have not fully recovered 39% Q22 Which of the following statements best reflects your current financial situation? (Base: All Washington, D.C. = 1,000) Charles Schwab 21

23 Washingtonians are split on whether Wall Street or Washington has the bigger impact on the economy and their personal finances Impact on Economy Impact on Personal Finances 43% Wall Street and Washington have an equal effect on the economy 39% Wall Street and Washington have an equal effect on my personal finances 29% What happens in Washington will affect the economy more than what happens on Wall Street 34% What happens in Washington will affect my personal finances more than what happens on Wall Street 28% What happens on Wall Street will affect the economy more than what happens in Washington 27% What happens on Wall Street will affect my personal finances more than what happens in Washington Q14/Q15 Which of the following statements do you agree with most? (Base: All Washington, D.C.=1,000) Charles Schwab 22

24 Nearly two-thirds of Washingtonians own their homes; main barriers to ownership are affordability of homes and inability to save Home ownership Factors preventing home ownership I can t afford a home in the neighborhood I want to live in I m not making enough money to save for the purchase of a home 47% 46% Median D.C. Area income is $78,000 Own home 63% I m still paying off debt I m not interested in purchasing a home in the near-term 22% 40% Rent home Have other arrangement 29% 8% I m currently saving for other things besides a home It is more financially attractive to rent than own a home in D.C. Other Nothing would prevent me from purchasing a home Q28 Do you currently... (Base: All Washington, D.C.=1,000) Q29 Which of the following would prevent you from purchasing a home? (Base: Those who own or rent = 881) Q 36 Which of the following best describes your household income in 2013, before taxes? Base: All Washington, D.C.=1,000) Q30 Approximately what percentage of your income do you spend on your mortgage or your rent? (Base: Those who own or rent = 923) 20% 14% 3% 5% Average percent of income spent on mortgage or rent Among owners and renters = 30% Charles Schwab 23

25 Survey Demographics Charles Schwab 24

26 Demographics All Washington, D.C. (n=1,000) Gender* Male 50% Female 50% Generation Millennials (21-33) 28% Gen X (34-49) 28% Boomers (50-68) 36% Matures (Over 68) 8% Mean age 46.4 Children Have children (Net) 60% Under age 18 24% Over age 18 31% Both over and under age 18 5% No children 40% Racial Background White/Caucasian 72% African American/Black 14% Asian 10% Hispanic or Latino 4% Other 3% Prefer not to answer 2% Employment Status All Washington, D.C. (n=1,000) Employed (Net) 67% Full-time 54% Part-time 13% Unemployed, looking for work 6% Homemaker or student, not looking for work 10% Retired, semi-retired 17% Political Orientation Republican 21% Democrat 40% Independent 27% None of these 7% Prefer not to say 5% Charles Schwab 25

27 Demographics 2013 Household Income All Washington, D.C. (n=1,000) <$25K 8% $25K to $49.9K 12% $50K to $74.9K 17% $75K to $99.9K 17% $100K or more 37% Prefer not to answer 9% Median $78,100 Total Assets All Washington, D.C. (n=1,000) <$25K 23% $25K to $99.9K 17% $100K to $249.9K 10% $250K to $499.9K 12% $500K or more 21% Prefer not to answer 17% Median $100,000 Charles Schwab 26

28 Disclosures The Charles Schwab Corporation provides a full range of securities brokerage, banking, money management and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. ( Schwab ), member SIPC, offers investment services and products. Its banking subsidiary, Charles Schwab Bank (member FDIC and an equal housing lender), provides deposit and lending services. Brokerage Products: Not FDIC Insured No Bank Guarantee May Lose Value. (# ) Charles Schwab 27