What does it take in terms of assets, abilities, and/or income for you to consider them wealthy?
There are two thresholds that matter: “rich” is where you no longer have to really think much about money on a day to day basis, and “wealthy” is where you no longer have to work for a living. Both thresholds depend on your expenses and the lifestyle you’re looking for, I guess
I was about to type something very similar, but switching words. “Wealthy” to me implies having enough wealth to not really worry. “Rich” makes me think of Lamborghinis and yachts and mountains of cocaine.
I liked it back when the aristocracy was just called the “leisure” class. At least they didn’t spend their time playing at being an executive and pretending they earned what they have.
If you could retire and have enough to keep you comfortably housed and insured until you’re 90, that’s wealth enough.
My definition for myself to be rich is:
I have enough money that I can pay someone(s) yearly wage to manipulate my wealth into enough money to cover their salary and then some.
If you can basically do whatever you want and the cost is of little to no concern, you’re rich.
What if you don’t have to work and you can fly to Europe for vacation without much worry, but you can’t fly first class without worry?
Cost is a concern then.
Ok, so not rich at that point.
$5 million of spare money. Not net total wealth but actually $5 million investable dollars.
At that point, I’d you stick that money in a very conservative and safe brokerage account allocation, 5% return per year is $250k. That is a higher salary than almost anyone needs, meaning you can live very comfortably without working. You can’t buy a yacht but you can be “done” and so can your children and their children if they aren’t stupid.
If you choose to work, then you can just reinvest that $250k and let compound interest do its thing and get richer. Lucky you.
With 5% you run a serious risk of running out of money. The general rule is 4% at retirement age, but younger than that with a longer time horizon is even less.
E.g you can look at this FIRE calculator (Financially Independent, Retired) which runs simulations against historical data. It’s all inflation adjusted for the yearly withdrawal.
With $5,000,000 and a $250,000 withdrawal rate, you have a 53.2% chance of making it 45 years and not running out of money. 4% 200k is 79.8%, and 3.5% 175k gets you to 96.3%.
Take that same 5 mil though and do 4% for 25 years with a 65 year retirement age so money until 90, and it’s a 98.4% chance.
If you can’t afford a yacht on $250k/year (after tax) then you need help budgeting, or it’s just not a priority. You might not be able to afford multiple houses AND a yacht, but a normal house and a yacht should be possible. Or your could replace the yacht with a couple lambos…
Not really the point, but sure, whatever.
Nobody wants to give a hard number?
I’ll say six million dollars earning ~5%/year. That’s $300k/yr before taxes. Assuming long-term investments, that’s 15% gains tax, so take $45k for taxes (fed), no idea what state will be because they’re all different, so just round it down to $250k year income in your pocket.
$250k/yr isn’t a lot of money…(I can hear the wtf’s…just hang on)…out of that has to come all your expenses including medical insurance in the US, your mortgage, car payments, etc.
This is not “fuck you” money. This is living an upper middle class lifestyle. You’ll have nice cars but not crazy nice. A decent house but not a mansion. You can tweak it a little this way or that depending on the CoL of where you live, but not a lot. Yeah, you can earn more in interest, but I was being conservative.
You’re rich because you don’t have to lift a finger to enjoy it, and you have the time to enjoy it.
Want closer to fuck you money with the above conditions? Try $20 million in the investments at 5%. That’ll get you a million a year before tax.
I agree my threshold is a bit lower and roughly comes out as getting 100k a year before tax so $2m.
Everyone is going to have different lifestyle wants. My low number might be too low for many, they might think living more lavishly would be more “rich”. I figured my numbers are adequate to live a moderate lifestyle and have no serious money worries. No Ferraris, of course, but a top trim level Honda no problem or a good BMW with some budgeting.
The real luxury is not having to work.
Anyone who can forego any form of future income and live off their current wealth for the rest of their life in relative luxury/comfort.
not having to work and still get to live comfortably and afford most of the things you desire
We need a new word beyond rich. Everyone takes rich as a personal achievable goal.
We need a word for someone who has more money than is healthy. An easy to use word.
They are so rich they no longer know the cost of things. They can’t relate to their neighbors. They no longer need to be a part of their community to survive.
Jeff Bezos is a
That’s a good one
If literally running around in a warehouse full of 20 dollar bills collecting all you can with your hands and unlimited bags makes less money, there’s no fucking way your actual work is producing so much value.
Someone for whom the normal and inevitable experiences of suffering (illness, death in the family, natural disaster, etc) have no real economic consequences.
I consider anything above $500k to be “well off”. Once you start to pass $10M, that’s truly wealthy. $1B rhymes with obscene
The tiers for me are: Doesn’t worry about money -> Doesn’t work -> Can afford a US senator to protect money. There are not titles for this kind of thing.
Someone who has everything they could possibly need and no bad debt. Does not need to be rich.
