Define "Rich"

[trysail]

People throw around terms like "rich" and "wealthy" without ever defining them. I admit I'm curious to know how folk here define them. An income of, say, $40,000 per year would be roughly equivalent to the income one could safely and prudently derive from an investment portfolio of $1,000,000.

So, what exactly do you mean when you use the word "rich?"

 

[Joe Wordsworth]

Assets + Income - Liabilities - Debts - 6-12 months of living expenses > 0

That's pretty much what I think of when I think of wealth.

You make more than you spend, you own more than you owe, and you can live off of your savings for up to a year maintaining your standard of living while remaining in the black.

 

[Oblimo]

Luscious

 

[Edward Teach]

I seem to recall Forbes Magazine defining "Rich" as having passive income of more than one million dollars per year.

I tend to think of someone making $10,000 per month as being wealthy.

 

[JamesSD]

In the US, I'd say you're "Rich" if you have a networth above $1,000,000, and "Very rich" if it's above $5,000,000. Obviously there's some age dependance here, as a 35 year old with 1,000,000 in assets is more significant than a 70 year old in the same position. By my definition, there's a good chance I'll be "rich" one day, once I finish my education and start making real money.

As for the idiots with 6 figure incomes but who manage to be deeply in debt, I call those people simple "High Income Idiots".

 

[somberReality]

I think of money, but I also think of being rich in terms of happiness, family, and friends.

But lots of money doesn't hurt!

 

[impressive]

Rich:

1. Approximately 6'3" male. Dark hair and eyes. Lean build. High school quarterback who I fooled around with in the locker room while we soaked our ankles in the trainer's ice bath. He went on to QB for Army. I lost track of him after he graduated from West Point.

2. Very dark, exquisitely built male. Not terribly bright, but enthusiastic and rather well endowed. Played wide receiver (#88) for my university. Media called him "Rich," but I never did. He was always "Richard" to me, and he always showed up at my door after a home game.

I could go on ...

 

[SeaCat]

Good question mainly because it is so subjective.

To me being rich is not having to worry where your next meal is coming from. To me rich means not having to worry about where you are going to be living. To me being rich is being able to keep learning. To me being rich is being loved and being able to return that love.

Cat

 

[Boota]

To me being rich is having enough money that you don't even have to concern yourself with money and you can just get on with what's really important.

 

[Joe Wordsworth]

I dunno... I think money is really important.

 

[jomar]

Deleted.

 

[R. Richard]

People throw around terms like "rich" and "wealthy" without ever defining them. I admit I'm curious to know how folk here define them. An income of, say, $40,000 per year would be roughly equivalent to the income one could safely and prudently derive from an investment portfolio of $1,000,000.

So, what exactly do you mean when you use the word "rich?"

There is a dictum among investment people, "You can always get 6% on your money. Thus, the income from an investment portfolio of $1 million would be more like $60,000 per year. An annual income of $60,000 is $5,000 per month. Unfortunately, that is $5,000 per month before taxes. Depending on where you live, that could be an after tax income [remember sales taxes] is maybe $3,000 per month. It is no longer unusual that someone pays $1,500 per month on the mortgage. An after tax income of $1,500 per month may not sound all that bad, but there is an elderly woman who lives a couple of blocks away who spends over $900 per month on medication necessary to keep her alive.

 

[Pure]

seems to me that if you're making 100 times the median income for your category, in the US. you're rich. for one earner in a family, the median might be $40,000/yr, so i'd say 4,000,000 is very comfortable indeed.

 

[Boxlicker101]

People throw around terms like "rich" and "wealthy" without ever defining them. I admit I'm curious to know how folk here define them. An income of, say, $40,000 per year would be roughly equivalent to the income one could safely and prudently derive from an investment portfolio of $1,000,000.

So, what exactly do you mean when you use the word "rich?"

To me, being rich means having a high net worth. That would mean assets less liabilities. A person with a million dollars in assets and two million in liabilities is not rich. It's not high income although, of course, there is usually a connection between wealth and income.

I believe that if a person has a net worth of one million dollars or more, I would call that person rich.

There are other, better, ways of being rich but I am assuming you are referring to finances.

 

[lisa123414]

Rich, Richard, Rick, Dick....they're all good

 

[Boota]

I dunno... I think money is really important.

It is important to the extent that having a lot of money would allow the freedom to do the things I love without having to be concerned with whether I have enough money for the basics. And it is a LOT of money that takes away all concern. If the money itself is the important part than that would make me no more than Scrooge McDuck, sitting in my vault and counting it all. That might be the goal for some people, but not for me. It's like with these huge bands that are still going after all these years. They love making money, but that's not the whole story. They do what they love. If not they could have quit years ago and never played again.

 

[WRJames]

Here is a link that may help:

Wealth Distribution in the US

As you can see from the figures shown here, there are a very few very wealthy households (many millions of dollars).

As for the ones with only a couple of million to call their own -- I would use the term comfortable rather than rich. It probably depends which side you are looking at. Note that the median net worth, even for the "wealthiest" category -- the white households -- is under 80K -- which is not all that high, and liquid assets are only a little over 20K. This very low figure probably masks the percentage of families that have a negative net worth. And -- it was done in 2005. A slump in housing prices could have wiped out the 55K of equity that was from home values.

 

[Handprints]

As a rule-of-thumb definition for a category where numbers don't really work, I'd suggest that the point where your non-employment income equals or exceeds you employment income is the one where you become rich. For the majority of high-earning, high-asset Americans, I'd guess this point comes somewhere above USD20m.

EDIT: For me, if you've got USD50m, you're rich. If you've got USD20m, you're probably going to be rich if you don't screw it up. Under that, you may or may not be on your way out of comfortable into another category.

 

[Xelebes]

Assets + Income - Liabilities - Debts - 6-12 months of living expenses > 0

That's pretty much what I think of when I think of wealth.

You make more than you spend, you own more than you owe, and you can live off of your savings for up to a year maintaining your standard of living while remaining in the black.

Liabilities and Debts are the same.



Or do I need to re-read my accounting textbook once again?

*slams head against desk*

 

[Xelebes]

Anyways.

Uncomfortably rich => having total assets worth 1 billion dollars with the price of bread at 2 dollars.

 

[R. Richard]

To me, being rich means having a high net worth. That would mean assets less liabilities. A person with a million dollars in assets and two million in liabilities is not rich. It's not high income although, of course, there is usually a connection between wealth and income.

True, but you also have to consider capital. A guy who has a million dollars and owes a million dollars is MUCH better off than a guy who has zero. The guy with a million dollars can put his million dollars to work and make money while he fends off his creditors. The guy with zero goes to work somewhere, anywhere he can make enough to pay for food and a room for the night.

 

[BlackShanglan]

I like Boota's take. It reminds me of Virginia Woolf with her five hundred pounds a year of one's own (and, of course, the room - but I think the money was more the issue). She's right. The only way to avoid having to think about money all of the time is to have enough of it that it doesn't require close watching. It's one of life's ironies. One can do a great deal, of course, by way of simplifying one's desires and expenses, but ultimately even the most bare-bones lifestyle has its financial demands, and the only way to silence them is with a bag of cash.

 

[joeys-game]

Having enough to 'give someone a hand, buy some food for anothers family, give a buddy a loan and not expect or need any of it back.

 

[Boxlicker101]

Quote:
Originally Posted by Boxlicker101
To me, being rich means having a high net worth. That would mean assets less liabilities. A person with a million dollars in assets and two million in liabilities is not rich. It's not high income although, of course, there is usually a connection between wealth and income.

True, but you also have to consider capital. A guy who has a million dollars and owes a million dollars is MUCH better off than a guy who has zero. The guy with a million dollars can put his million dollars to work and make money while he fends off his creditors. The guy with zero goes to work somewhere, anywhere he can make enough to pay for food and a room for the night.

That's true also, and you can actually have a negative net worth and still be Okay. For instance, the indebtedness would probably include a home with a 30 year mortgage. This would be a debt, but such a long term one it probably wouldn't be an immediate problem. Of course, remember, the million dollars of debt would be accruing interest, maybe more than the assets would be producing.

 

[Weird Harold]

People who shout all the time are annoying.

People throw around terms like "rich" and "wealthy" without ever defining them.

Rich is one of those relative terms that is very context sensitive, so:

if you have to ask if you're rich, you ain't.

When I was stationed in Thailand and living "on the economy" I was a "rich American" at just under $500/mo -- an income which was well under the "poverty level back home in the US at that time.