If you have $2.5M net worth you are in the top 5% in the US. You might not feel rich but you are. At $11M net worth you are in the top 1%. This is where most peoples idea of rich starts.
Me and my spouse make 500k after taxes and I wouldn't consider us rich.
You might not be. What is your level of debt? Do you own your house outright? Could you stop working today and be more than fine? Do you live in an area that requires you to pay a ton in property taxes? Do you have enough investments to provide for a retirement that you want?
If you have $2.5M net worth you are in the top 5% in the US. You might not feel rich but you are. At $11M net worth you are in the top 1%. This is where most peoples idea of rich starts.
If your net worth is all tied up in the house you live in, then you're not rich.
You have to have disposable income. You can't just count net worth. You COULD sell the house and buy a much cheaper one somewhere else and then suddenly become rich though.
If you have $2.5M net worth you are in the top 5% in the US. You might not feel rich but you are. At $11M net worth you are in the top 1%. This is where most peoples idea of rich starts.
If your net worth is all tied up in the house you live in, then you're not rich.
You have to have disposable income. You can't just count net worth. You COULD sell the house and buy a much cheaper one somewhere else and then suddenly become rich though.
Rich isn’t dependent on how liquid your assets are in the present moment. The person that spends his entire income and makes it rain just looks rich.
If your net worth is all tied up in the house you live in, then you're not rich.
You have to have disposable income. You can't just count net worth. You COULD sell the house and buy a much cheaper one somewhere else and then suddenly become rich though.
Rich isn’t dependent on how liquid your assets are in the present moment. The person that spends his entire income and makes it rain just looks rich.
Agree. I usually agree with your stuff Flagpole but this is a horrible interpretation of wealth. It is la poor man's definition of rich and one of the drivers behind why so many people who come into money quickly end up broke.
Traveled a decent amount saw over 45 countries, hiked in remote places and been in all kinds of public transportation around the world. On top of that I done a bunch of cool races.
Rich isn’t dependent on how liquid your assets are in the present moment. The person that spends his entire income and makes it rain just looks rich.
Agree. I usually agree with your stuff Flagpole but this is a horrible interpretation of wealth. It is la poor man's definition of rich and one of the drivers behind why so many people who come into money quickly end up broke.
Flagpole is obsessed with being “liquid” so that he has enough cash for appetizers at Applebee’s or for a crazy weekend in Branson
Not having to worry about housing, healthcare, or retirement. If you are living without those stresses that most people are dealing with, then you are rich.
This is deep. I do think it has to do with freedom from having to do the math for everyday purchases or cars or whatever. I find the bar for "rich" just moves. I make way more than I ever thought I would (well, household income), but since I cant afford a vacation home right now due to crazy prices, I wish I made more. If you are a crazy busy person, TIME becomes your precious resource. If i could have one "rich guy" thing right now...it would be a personal assistant. When i was 18 i would have said big boat big house...Sounds weird saying it, but if you have two working parent multi kid crazy household like me, you get it-personal assistant. Nothing says rich like having someone buy me time and less stress. But yes a vacation home would work too. Oh , and the ultimate...a "staff". Not a maid, a staff! In order...maid, cook, gardener, handyman, valet (clothes not cars).
Being "rich" today has nothing to do with finances and expenses. It is all about dick measuring contests. At a minimum, in order to be considered "rich" you need the following:
1. Leasing two luxury autos. Land Rover Range Rover and a MB S class or GL, for example.
2. Own a 5,000+ square foot home (can be smaller in high cost area like San Fran, Manhattan, etc.) that is new construction. Must be able to show guests around the house and talk about how you worked with the architect to build a special office for your day trading that has an exercise room attached.
3. Country club membership. Can't play golf and tennis with the rabble.
4. Regular table at a high end steak house. Can't eat with the rabble.
5. At least one vacation property. Can't vacation with the rabble.
6. Kids in private school. Can't have your kids associate with the rabble.
7. Full time staff at your house to cook, clean, do personal assistant stuff.
8. Ample conspicuous consumption. Several Rolex watches, art collection (or sports collectibles), interior design with high end everything, thousands of dollars in fly fishing/hunting gear that you use once every other year, walk in wine cellar with $50,000+ in cases of Bordeaux, closet full of couture and high end bespoke suits, etc.
Pull up to a stop light in a lambo and do the the walk with your back tilted back plus exagerrated arm movement like you're Connor McGregor just to rub it in all the idiot doubters/haters/trash talkers faces because they're actions incited the revenge tour. Reminds me of when Kanye says, "slaved my whole life, now I'm the master."
Steve - do you ever post on Yahoo Finance on individual stock message boards? I used to read posts by a guy who went by "Steve" who had a very similar writing style to you. Just curious, I was always entertained.
Yes indeed and I am multi-accounting on that particular board but not on this one. Thanks for your appreciation.
Rich isn’t dependent on how liquid your assets are in the present moment. The person that spends his entire income and makes it rain just looks rich.
Agree. I usually agree with your stuff Flagpole but this is a horrible interpretation of wealth. It is la poor man's definition of rich and one of the drivers behind why so many people who come into money quickly end up broke.
Huh? My view of wealth and financial management would NEVER allow someone who came into money end up broke. What are you even talking about?
Also, really all I've said here is that in order to be "wealthy" you need to have disposable income beyond your expenses, not have to work and own your house outright. How is that wrong on any level? That's the bare minimum. There are levels of wealth.
If your net worth is all tied up in the house you live in, then you're not rich.
You have to have disposable income. You can't just count net worth. You COULD sell the house and buy a much cheaper one somewhere else and then suddenly become rich though.
Rich isn’t dependent on how liquid your assets are in the present moment. The person that spends his entire income and makes it rain just looks rich.
Where did I say a person needs to spend their entire income and "make it rain?"
But yes, you need to have disposable income to be "wealthy." Having disposable income doesn't mean you HAVE to spend it. You can use disposable income to invest/save and become even more wealthy.
A person who has NO disposable income yet lives in a paid-for $2.5 million house is NOT wealthy, but a person who lives in a $300,000 paid-for house who doesn't work and yet has an income of $100,000 annually IS wealthy in my opinion. Now, the person who lives in the $2.5 million house could sell it and use the proceeds to help with income and then BECOME wealthy, but they are not that if they don't have any disposable income.
It’s all relative, similar to “what makes a fast 5K runner?”. Some would say sub 20 min and others would say sub 14.
For me, I’d say liquid assets >$5M with a low debt ratio or net worth of $10M or more.
Yes, you can be comfortable with a $300K debt free house in GA and $500K in the bank, but you’re not flying first class often, staying at the Four Seasons, or sitting court side at the NBA finals.
I’d say my definition of rich is the equivalent of an adult male 5K runner in the high 15:xx or low 16:xx.
My house is worth about $2M and my wife and I have about $4.2M in our 401k accounts. Flagpole say we are not rich.
I don't have enough info based on that to know if you are rich or not.
1) Do you own the house outright?
2) Do you HAVE to work to meet your financial obligations?
3) Is the property tax on your house exorbitant?
IF you own your house outright, and IF the property taxes aren't out of this world, and IF you can quit your job today and have an income of at least $100,000 (need more if the property taxes are huge which they might be on a $2 million home), and IF that allows you to do all the extra things you want to in life, then you are wealthy.
IF you are old enough to get at that 401k money without penalty, and you take 4% of it, that's $168,000 per year. Assuming no unusually large expense that most people don't have (caring for an infirmed/disabled child or parent for example), and assuming your house is paid for and you don't have any other debt, that would qualify you as wealthy in my opinion.
Rich isn’t dependent on how liquid your assets are in the present moment. The person that spends his entire income and makes it rain just looks rich.
Where did I say a person needs to spend their entire income and "make it rain?"
But yes, you need to have disposable income to be "wealthy." Having disposable income doesn't mean you HAVE to spend it. You can use disposable income to invest/save and become even more wealthy.
A person who has NO disposable income yet lives in a paid-for $2.5 million house is NOT wealthy, but a person who lives in a $300,000 paid-for house who doesn't work and yet has an income of $100,000 annually IS wealthy in my opinion. Now, the person who lives in the $2.5 million house could sell it and use the proceeds to help with income and then BECOME wealthy, but they are not that if they don't have any disposable income.
You seem to fundamentally misunderstand how wealthy people access capital. At a certain level of wealth access to incredibly low interest lines of credit against your assets become available. You don't need liquid assets to live like a baller if you can tap into a revolving line of credit of 20m dollars at 1% interest.
Thus, it is is perfectly reasonable for most or nearly all of one's assets to be tied up in real estate, private equity or other more difficult to liquidate investments while still having sufficient access to capital to do whatever your view or "acting rich" looks like.
It’s all relative, similar to “what makes a fast 5K runner?”. Some would say sub 20 min and others would say sub 14.
For me, I’d say liquid assets >$5M with a low debt ratio or net worth of $10M or more.
Yes, you can be comfortable with a $300K debt free house in GA and $500K in the bank, but you’re not flying first class often, staying at the Four Seasons, or sitting court side at the NBA finals.
I’d say my definition of rich is the equivalent of an adult male 5K runner in the high 15:xx or low 16:xx.
$500,000 in the bank with a paid-for house in GA wouldn't do it. 4% of $500,000 is only $20,000. Even if you and a spouse get another $40,000 for social security, you'd still need another $40,000 per year to hit the $100,000 in annual income I said was necessary to qualify you as wealthy, so in this case you would need $1.5 million in investments plus $40,000 in SS income to reach that goal.
If you are debt free and have an income of $100,000 with no unusual expenses, you can fly first class and stay at the Four Seasons if you want to even a few times a year. Courtside seats at the NBA finals are another level of wealth altogether. You can't buy a private jet either on what I said would qualify someone as "wealthy." There's wealthy and there's uber wealthy and a ton of points inbetween.
To be rich I'd say your net worth needs to give you the ability to not need to worry about making any more money and not really being concerned with what you have left. For a 40 year old to be rich I think they'd need a net worth of 2.5 million and you're rich. They can have a paid off house in the $500k-$1M range, and still $1.5M-$2M in the bank/investments. They can ride that quite comfortably the rest of their life, spending $50k equivalent per year (they no longer have a mortgage payment to worry about) and their investments will likely continue to make them better off.
Someone at that age that still has a mortgage payment to worry about on a less than $1M house and only a few hundred thousand in investments still has to make some more money in their lifetime to truly be 'set'. I do not consider them rich, but they are very very comfortable.