What does it take in terms of assets, abilities, and/or income for you to consider them wealthy?
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.
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.
Of course, rich is a relative descriptor, like tall or heavy, some people are richer than others.
I would call anyone who doesn’t need to work in order to live (i.e. who can live off investments and interest) rich.
Sorry for linking back to the R word. But FIRE comes to mind with your post
This is apt, because I know people who earn six figures but work 60 hours a week and are living paycheck to paycheck. They’re not poor, but they’re not rich.
A 6 figure salary while living in midwestern USA or elsewhere with low CoL is very different from living in most areas along the coast.
Are old retirees rich, then? I wouldn’t consider that accurate.
If you’re not pulling in upper 6 figures from those investments, you’re still not rich.
Old retirees that don’t need to work to live are rich, yes. If they can afford their rent and food and healthcare, they are doing better than 90% of humans on Earth.
No. Not being destitute doesn’t automatically make you rich. Things are not black and white. There’s a wide spectrum that is very flat until you get to the top 0.1%.
Bring in the top 10% doesn’t mean much when the different between top 99 and top 90 is multiple orders of magnitude larger than top 90 to top 10.
If your definition of “destitute” is having to work for a paycheck, you and I are not on the same page.
If I ever manage to earn ~3000 euros (my current net salary) a month from just investments and interest, I will definitely consider myself rich. There may still be richer people than me even in that scenario, which is why I wrote that “rich” is a relative descriptor.
That’s a totally obtainable goal!
For everyone? Do you really believe that?
If you max out your ROTH IRA every year until retirement that is possible (for the US). Yes, I believe one can easily save and invest in index funds. Based on compound interest with a return rate of 3-7% one could expect 450,000-1.05 mil after 35 years of working. That’s 583$ post tax dollars a month.
Post kids it’s been more difficult but I even picked up an extra job to make sure I can max out my retirement investments.
For everyone? Absolutely not. It is obtainable though. Even half of that per month would result in similarly good returns. The problem is investment education. Reminds me of my local communist reading group who to my surprise didn’t know anything about investing even though capital is like their whole thing.
Max contributions to a ROTH IRA is $7,000. Most people don’t have an extra $7,000 lying around. If you do, chances are you’re already in the top 10%.
I would still say that’s not true… I probably make half as much as you but I just try to be extremely frugal… just saying it’s doable
Everyone? No.
Anyone? Maybe.
For everyone, right? Nobody works everyone just collects their 3k
Relax. If you max out your ROTH IRA every year until retirement that is possible (for the US).
For most of us reading this it is an obtainable retirement income. On the world stage if you can read this you are probably rich. A little bit of savings can get you 3k inflation adjusted once you reach “old age”.
Of course on the world stage this varies per country but I agree that a big of savings can get you there by retirement, especially if done early.
In China a common goal is to save 140k USD then invest it and retire by one’s mid 30s living a simple life.
That would be achievable in the US as well - 140k US saved and living a “simple life”. Those some people who try it go back to work in a few years because it turns out they value a more complex life. YMMV.
I would call anyone who doesn’t need to work in order to live (i.e. who can live off investments and interest) rich.
Some caveats I would add: (1) Excluding receivers of pensions and/or other benefits.
(2) Without moving to a different country. I could retire today, if I moved to a low cost of living country.For (2), in that country, you would be rich.
The point at which you no longer know the well being of the people that count on you to survive, albeit employees or percentage of wealth held relative to the region. If someone you interact with is no longer human, like a landlord with a tenant that falls on hard times, anyone that feels they have rights that are more important than the well being of those in their immediate vicinity are worthless subhuman monsters I call rich.
Someone for whom the normal and inevitable experiences of suffering (illness, death in the family, natural disaster, etc) have no real economic consequences.
If you can basically do whatever you want and the cost is of little to no concern, you’re rich.
There are very few people who feel this way. CEOs making millions per year feel like they need to work - their mansions, airplanes and such cost so much money they don’t dare not work. It never occurs to them they could live like the rest of us.
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.
Eh I’ll adjust that a bit to “and you’re not required to work 40 hours a week to do so”. If you are living well and still working, then I’d still say congrats, but that’s not rich, that’s supposed to be the top end of middle class. (If it is anymore, well, who knows).
The big kicker is if tomorrow they lay you off, are you nervous or worried? Not rich then, the rich would shrug it off and take a few months or years off doing whatever they like. If your first thought when you get laid off is “how long will my savings last” or “I need to find another job”, congrats! Not rich.
But if you don’t need to work (or you’re someone like a board member or executive who shows up for 10 hours a week and claim they “work”, then no, your rich, you have enough were you don’t have to work anymore.
Anyone with a net worth listed on their wikipedia page.
Anyone who can lose several million dollars at work and might still have a job the next day.
Anyone who can damage fancy clothing and think “I’ll just get a new one.”
Anyone who can have a holiday abroad every year. Especially if they have a summer home.
Anyone who gets surprised when they find out someone has never been skiing.
Anyone who gets surprised when they find out someone has never been skiing.
That depends on culture a lot. In Austria it’s actually rare to find someone who has never been skiing (25% of the population go skiing regularly, and that has already been at around 50% not many years ago). Even when not doing it with your family while growing up everyone learns it at school.
I’m not rich at all but I do get surprised when someone who isn’t obviously from another country has never been skiing (typically it means that they grew up somewhere else but you just don’t notice anymore).
$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…
Wealth, to me, is relative, measured by how far-reaching you can do things.
In the top tier, there are billionaires who can make decisions on the world stage, such as Elon Musk making satellites to help various countries or L Ron Hubbard buying a navy and putting places of worship in other countries.
In the middle tier, there are people who can make decisions on the national level, such as smaller business chains putting their businesses in various states.
In the low tier, there are people who can make decisions on the local level, such as buying management at a local school.
And then there are the rest of us, who have our whole empires concentrated on a single street.
who have our whole empires concentrated on a single street.
Running an empire out of rental ain’t very glamorous tho esp when you short on tent
Anybody who doesn’t have to work for the rest of their life because it’s voluntary + they don’t really have to look at the price tags of the things they want.
So would that include retired people?
Few retired people I know can ignore the price tags off stuff…
If you get a golden parachute after losing your job, you’re overly wealthy.
Lots of other good definitions in here as well
Personally, I’d consider myself rich. I live in Germany which is already among the richer countries in the world giving me access to an insane amount of infrastructure and opportunities. Furthermore, I work for an IT company and make more money than average and more than I need to satisfy my immediate needs (shelter, food, transportation etc.) and pay for my hobbies (mostly outdoor stuff). I might not be a millionaire and I can’t just retire tomorrow but still I’m very aware of what a huge privilege I have compared to a vast part of humanity.
Personally, I think already my taxes are too low. Not to start about millionaires or billionaires.
These folks are always comparing themselves to billionaires. “What am I not a KING!”
Much the same story as yours. I consider myself filthy rich vs. the rest of modern humanity and obscenely rich vs. historical humanity.
I think it was Bill Gates who said that all the kings of Europe weren’t wealthy enough to buy the things in a modern grocery store.
Anyone who has strong opinions about new video games or a favourite Tiktoker is wealthy
What?
Rich - enough money to throw around and buy expensive things, but could lose everything with some poor decisions because they are spending their income instead of focusing on future wealth
Wealthy - expenses are easily paid using income from investments, easily accessible loans from property, or some other wealth based process. They don’t need to actively work to do the same kinds of thing a rich person can do, and it is difficult for them to lose their wealth.
There are not any specific dollar amount thresholds, because it depends on spending and local cost of living. Wealthy people will make decisions that maintain enough wealth that will increase in value over time to beat inflation, rich people make decisions based on whether they can afford it right now.
$500,000 combined household gross income
