Who is rich?

[RPM]

Or more specifically, what makes one (financially) rich?

What is your yardstick for determining whether someone is "rich"?

For me, I would say it's having $75k or more of passive income per year such that one does not have to go to a job to pay for their living; after all, even if you make 100k a year working, you are still an expense to the boss and can be cut at any time.

Thoughts?

[nuxvomica]

1. I recall Trump defining it as having 1M of unearned annual income

That seems kind of arbitrary but if you're in that situation you are definitely rich though someone making only $500K per year without working is probably considered rich by most standards. I think $75K is a little low.

[uppityperson]

2. Being able to pay your basic bills, eat, get health care, without worrying.

There is no number since all that depends on a lot of stuff. Being able to pay your housing (or own it which means you don't have to worry about paying it), your basic bills, buy gas, food, basic clothing that you need, get health care if you need it, all without having to think about it or worry if you can afford it. Not having to juggle your finances or worry about it. Anything beyond that is rich, for me.

[Tierra_y_Libertad]

3. Wow! We're rich!!

My wife and I are retired. Pensions, SS, and withdrawals from our IRA's, pay us about $55,000 a year.

We don't have kids, our house payments and regular bills (utilities, gas, etc) are paid without juggling. We pay cash, so we rarely use our credit cards, and only when we know we will pay them off within 1 month. We have pretty good health insurance that pays for most of our needs, and we have enough left over to provide for our desires.

However, we're cheap dates. Both of us are readers and we've had about all the excitement and "fun" we can stand.

[uppityperson]

4. Yup, funny how standards change and low expectations help.

I'd consider myself rich to be in that category. Or perhaps "well to do" with "rich" being beyond that category.

[Tierra_y_Libertad]

5. Well, we consider ourselves fortunate..due to some good planning.

I certainly, wouldn't call us "rich". But, we are very happy with our lot.

We started "living" on our projected retirement income years before we retired. We put the "excess" into IRA's and work related saving plans. We paid off all of our interest bearing bills (save the mortgage) and paid cash for everything.

We decided what we wanted in retirement. A lot of good books and nice surroundings to read them in and no financial worries.

We aren't penny pinchers, and have always given substantially to charities, bought what we wanted, (we're also able to discern between "want" and "ability to pay for") and enjoyed life ('cept work).

My wife came from a wealthy family. (Which didn't provide an inheritance). I, from an extremely (hungry, homeless at times)poor family. We decided not to have kids - probably the biggest factor in our retiring comfortably.

I can't imagine how people today make it. My next door neighbor makes in the 6 figure range and is too "broke" to retire. 3 kids and a need to buy every new shiny thing on the market explains it.

But, hell, we were pretty happy even when we were up to ears in debt.

[MedleyMisty]

6. Hmm

I tend to think that people are rich if they can buy a car less than five years old, buy a home of any price or rent out a place for more than $600 or so a month, and most definitely if they can spend more than $50 or so on any type of clothing or accessory. Oh, and if they can take vacations and stay in something more expensive than your average hotel, especially if it's for more than two nights.

I'm trying to think of an income level that I think is rich. Maybe $70,000 and upwards combined? My husband and I are around $30,000 to $40,000 combined, I think - with variances from year to year depending on job and stuff, like this year will be towards the lower end because my husband is working part-time.

[RPM]

8. Those are good tests, but....

I think the first is something that can be faked based on credit usage.

The latter, I think, makes the mistake of confusing wealth with income: Income isnt wealth until its not spent. Hard concept to articulate, but I am struggling with the common societial notion that speding = wealth. Kinda why i started this thread :-)

[greendog]

7. Well, we're all rich (depending on the definition)

But, If you're talking about the "elite" rich, passive income is a good way to define it.

>>>: Having enough passive income to live well without working. Probably between $50,000 and $100,000 a year assuming outright home ownership.