What does it take in terms of assets, abilities, and/or income for you to consider them wealthy?
If they own a house, make at least 100k a year and can support their family comfortably, I would consider that wealthy. My father is in this bracket and he goes on vacations over seas, owns 3 relatively expensive vehicles, and still saves enough for retirement.
You don’t need a million dollars to live a rich, fulfilling life.
Not only live off investment portfolios, but live well.
I.e. one or two summer houses, take multiple foreign vacations. And do that comfortably with what they already have or are passively earning.
When you could stop working and just coast off of what you’ve got till you die. At that point, making more is a luxury.
That’s a really good answer, wealth comes with options
So you don’t think people should ever be able to retire?
I think people should have luxury, just not to the extent that it starts hurting society as a while. Like with Jeff Bezos’s behaviour.
There’s an enormous gap between grandma living month to month on her pension cheque and Jeff Bezos money. Grandma doesn’t work though so you could say she’s “coasting” even if she relies on the senior discount at the grocery store to get by.
There’s also a lot of people who have a lot of wealth (in the form of land, buildings, equipment) yet can’t afford to stop working, such as farmers. The UK government is going after these folks aggressively and they’re very unhappy. We could be seeing a strike by farmers in the new year where they simply stop delivering food to market.
Yep, Bezos is hurting a lot of people in his pursuit of wealth though. Granda gets to enjoy her extra time in her way.
And yep, some people have plenty of assets to work with. But that doesn’t make you wealthy per se. You provided some good examples of that.
They’re not wealthy. At least not in the way I consider wealth, which was the question.
I’m confused. Here was your original comment:
When you could stop working and just coast off of what you’ve got till you die. At that point, making more is a luxury.
That, to me, includes grandmas who live off their pension cheque as “coasting off what you’ve got.” Did you not intend for that interpretation?
I do, building up a pension over your life is a luxury I think people deserve. I do count those grandma’s as wealthy. But that doesn’t mean it’s a bad thing, I think people should be able to retire.
Well, luxury and rich are closely related terms, aren’t they? I think what you described is a financial independence.
I’d add that if you can support your desired level of luxurity for yourself and your family without working anymore - that’s being rich.
Edit: I misread the original question, which was asking about wealthy, not rich. Still, I think my answer applies
That is not what I’m describing, no. I am specifying that it’s about having enough wealth that you can stop working.
Having a job, investments, being a landlord, freelancing etc. Those are all ways to achieve financial independence. But none of those allow you to stop doing any of them.
Working class people contribute to society.
The rich are parasites.
That’s the difference.
And no, telling people what to do is not real labor. Rent seeking is not real labor.
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.
For me, being wealthy would mean that if they never intentionally earned another penny for the rest of their life, that would not prevent them from doing anything that they wanted to do within reason.
For normal people that would mean between two and five million dollars in liquid assets available to them.
If you could retire and have enough to keep you comfortably housed and insured until you’re 90, that’s wealth enough.
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.
not having to work and still get to live comfortably and afford most of the things you desire
Which kind of rich do you mean? The ‘this person is truly wealthy but it’s not unreasonable’ or ‘this person is unacceptably rich and should have their money taken away if not worse’?
The former can be somewhere around…$10,000,000 or so. Lower the older the person is really (cause I consider rich versus remaining expected lifespan), so maybe even as low as $6,000,000 for someone who’s currently 40.
The latter where it’s simply unacceptable for people to have that much I’d start the cutoff around $400,000,000 or so.
And slight sidenote on the unacceptable levels: Elon Musk and Jeff Bezos both are so unacceptably wealthy that they could make one person a day wealthy by my $10,000,000 standard…every day…for 100 years…before running out (and that’s assuming they stopped accruing money at the beginning of this)…and still be unacceptably wealthy to a crazy degree.
Oh and all my numbers are assuming no additional income and definitely no interest or investment (but also assuming the money remains the same value it has today).
I guess what would it take for you to look at yourself and conclude that you’re rich?
For me, given my age and all…five million.
I think calling Bezos rich is an understatement. My mind cannot comprehend the amount of wealth he has.
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.
Being able to not worry about food, gas, standard bills and actually have something in savings
It’s sad that affording basic necessities and having a bit of a financial cushion is considered rich.
It is indeed. Everyone I personally know is struggling and hoping for better days while working a ton.
$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.
Someone who has everything they could possibly need and no bad debt. Does not need to be rich.
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.
