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re: At what amount of savings or net worth do you consider someone to be rich?
Posted on 7/6/22 at 8:19 am to Teddy Ruxpin
Posted on 7/6/22 at 8:19 am to Teddy Ruxpin
quote:
Not out of touch at all. In fact I'm arguing your point.
My point is anyone that thinks you have to be worth in excess of $5 million and closer to $10 million to be considered rich is out of touch with reality. If that is what you are arguing I guess I misunderstood.
2
Posted on 7/6/22 at 8:30 am to go ta hell ole miss
quote:
My point is anyone that thinks you have to be worth in excess of $5 million and closer to $10 million to be considered rich is out of touch with reality. If that is what you are arguing I guess I misunderstood.
Yes and no. A person roundly average in the US is basically in the 1% globally. Are they out of touch with reality?
A person at some of these wealth levels is definitely extremely well off, but there's still threat of "messing it up" and falling back down (taxes, bad investment, short term bad habits/decisions). Furthermore, if they have heirs they can quickly split the pie, which is how many dynastic families fall apart. So I'm saying it's not particularly silly for someone to define "rich/wealthy" as someone who never has to think about money really at all. As if it's the same as using the bathroom or deciding a show on Netflix. There are people out there who would have to TRY to be poor and still not be
It is certainly a more extreme position to yours and 99.99% of the planet, but that says more about the financial position of the world (your point). Which is, the vast vast majority of people are one bad and not so major event away from losing everything. There's a small minority of people who could sustain one of those events, so if someone considers that rich then that seems reasonable to me. The rest of the world would say a two room house with a roof and floors.
This post was edited on 7/6/22 at 8:37 am
Posted on 7/6/22 at 8:49 am to Teddy Ruxpin
quote:
A person at some of these wealth levels is definitely extremely well off, but there's still threat of "messing it up" and falling back down (taxes, bad investment, short term bad habits/decisions).
AP made 9 figures in his career and still went broke. There is no level of wealth that is beyond the reach of messing up if you have control of it.
In my opinion there is no rich or wealthy. These are not absolute terms but are purely relative terms. Someone with a net worth of $10M is wealthier than someone with a net worth of $5M. Location and cost of living are clearly large factors too. There is a whole thread of people moving to other countries because their wealth goes much further there.
My same question would be who is considered tall. We only consider someone 6'5" tall because we know the majority of people are shorter than that. In a land of giants someone 7' tall might be considered short.
So ultimately it comes down to what % do you consider to be wealthy. This % would of course have to be adjusted for significant factors such as cost of living. Someone in the top 10% in San Fran would like be in the top 0.001% in a 3rd world country. This number likely changes based on where you currently are at in the distribution. We have a tendency to want more and feel we haven't achieved the goal. If you have $5M then you think $10-$15M is the number. If you have $15M then you think $30M is the number.
Posted on 7/6/22 at 9:04 am to bod312
I don't think there is anyway $5M is rich unless you have no kids (or they are financially independent, does that even happy anymore?). No hobbies, and you don't like to eat out or drive anything. I mean just to have a "rich" house anywhere in this country is ~$2M+, and when you start getting into exclusive places its multiple times that.
Posted on 7/6/22 at 9:15 am to tirebiter
quote:
I don't believe all that happens annually on $100k.
It easily would in the midwest like MO and KS. That is a LOT of money.
Posted on 7/6/22 at 10:03 am to go ta hell ole miss
quote:
My point is anyone that thinks you have to be worth in excess of $5 million and closer to $10 million to be considered rich is out of touch with reality.
Yeah, I always forget how tone deaf this board can be until one of these threads pops up.
Posted on 7/6/22 at 3:34 pm to FinleyStreet
Definitely interesting to see the thoughts on this board of rich versus some of the studies some have posted.
I certainly feel that if you asked the average person is $3 million in net worth "rich"? And they weren't living in NYC or San Fran, the overwhelming majority of people would say yes.
Many U.S. residents will never even approach that type of money in their lifetimes.
I also think people's spending habits play such a huge role in this. I drive a shitty arse car. Live in a nice, but not luxurious place in a good part of town. And save as much as possible. We do have our vices (F&B), but not much else. And we'll retire in our early to mid 50s with enough to never run out of money. But I don't "feel" rich.
On the other hand, we have friends who make substantially more money than we do. Absolutely live a "rich" life via cars, vacations, extravagant spending. And they definitely consider themselves "rich". But I'd venture to say they'll also be working until they are 70 and likely have way less than us in savings.
I certainly feel that if you asked the average person is $3 million in net worth "rich"? And they weren't living in NYC or San Fran, the overwhelming majority of people would say yes.
Many U.S. residents will never even approach that type of money in their lifetimes.
I also think people's spending habits play such a huge role in this. I drive a shitty arse car. Live in a nice, but not luxurious place in a good part of town. And save as much as possible. We do have our vices (F&B), but not much else. And we'll retire in our early to mid 50s with enough to never run out of money. But I don't "feel" rich.
On the other hand, we have friends who make substantially more money than we do. Absolutely live a "rich" life via cars, vacations, extravagant spending. And they definitely consider themselves "rich". But I'd venture to say they'll also be working until they are 70 and likely have way less than us in savings.
Posted on 7/6/22 at 4:40 pm to Grinder
When you have the kind of money whereas you can fly down to a Mexican resort where you booked a week with others, flew first class,check in. Show up for a night, eat a 700.00 meal decide that it's not for you and your girlfriend and leave fly out the next morning on first class, then call your ex wife buy her the same first class ticket plus access to his credit card and wires her an extra 1500.00 cash and she gets to spend the rest of the week with people who used to be family.
Meanwhile, he flies home, liquidated his business for a nice profit and he is back out of the country before she is done in Mexico.
True story.
Meanwhile, he flies home, liquidated his business for a nice profit and he is back out of the country before she is done in Mexico.
True story.
Posted on 7/6/22 at 5:05 pm to SerenityNow
quote:... and by the numbers (toss in SoCal, DC, Seattle), you'd be correct.
I certainly feel that if you asked the average person is $3 million in net worth "rich"? And they weren't living in NYC or San Fran, the overwhelming majority of people would say yes.
quote:
Grinder's Post
. . . . . . . . but as illuminated in "The Millionaire Next Door", if you met someone worth $3.2M in Seattle,
odds are 50:50 you'd never ID them as rich.
Posted on 7/6/22 at 5:08 pm to nolaks
quote:Not even close in most mid size US cities. You can have a whole lot of house for 750k in most places.
have a "rich" house anywhere in this country is ~$2M+, and when you start getting into exclusive places its multiple times that.
Posted on 7/6/22 at 5:11 pm to KiwiHead
quote:Hell, I could do that tomorrow. It wouldnt make me rich, it would make me stupid. Rich and stupid are like dogs chasing cars, they dont last long.
When you have the kind of money whereas you can fly down to a Mexican resort where you booked a week with others, flew first class,check in. Show up for a night, eat a 700.00 meal decide that it's not for you and your girlfriend and leave fly out the next morning on first class, then call your ex wife buy her the same first class ticket plus access to his credit card and wires her an extra 1500.00 cash and she gets to spend the rest of the week with people who used to be family.
Meanwhile, he flies home, liquidated his business for a nice profit and he is back out of the country before she is done in Mexico.
True story.
Posted on 7/6/22 at 5:13 pm to SerenityNow
quote:One factor not mentioned here very often is age. If you are late 50s or 60ish and have 3 million dollars and no debt, you are in damn good shape to die with a couple million and live a really rich life for 20 years even if you can get marginal returns on investments.
Definitely interesting to see the thoughts on this board of rich versus some of the studies some have posted.
I certainly feel that if you asked the average person is $3 million in net worth "rich"?
35 and win a 3 million dollar lottery and run out and spend 800k on a house and 350k on a camp? Not gonna make it long.
This post was edited on 7/6/22 at 5:14 pm
Posted on 7/6/22 at 5:45 pm to nolaks
quote:
I mean just to have a "rich" house anywhere in this country is ~$2M+
I’m not picking on you, but that’s an example of how people (mistakenly) associate “rich” or “wealthy” with conspicuous consumption.
When I do track days, several of the people driving older Miatas, I know for a fact are multi-millionaires. And I know a couple who have Ferrari 458s and Porsche 911 GT3s who are high earners, but they’re DEEP in debt.
As I said before, as most define the term(s), it’s about net worth, not types of cars, houses or watches… or even income. Heck, look at the house that Warren Buffett lives in and the type (and year) of car that he owns.
Whatever arbitrary number people want to pick is fine. As someone else rightly pointed out, the number is relative and based largely on the surroundings and expectations of the person being asked.
Posted on 7/6/22 at 7:37 pm to Jag_Warrior
I don’t even think net worth is a clear measurement of wealth. It’s net income producing assets - it is all about cash flow generation utilizing said assets.
Someone that has an expensive house and cash flow issues is living a challenged financial state of affairs.
Someone that has an expensive house and cash flow issues is living a challenged financial state of affairs.
Posted on 7/6/22 at 8:03 pm to lynxcat
I don’t disagree with that. But whether you’re attempting to become an accredited investor or getting into certain limited partnerships, your net worth (usually excluding the primary residence) is typically the first topic that comes up. But yes, I agree that the types of assets that one holds figures into the equation too. A piece of debt free raw land, that appraises for $5 million, but produces no income, could be more of a burden than a blessing.
Posted on 7/7/22 at 5:03 am to tigerfoot
quote:
When you have the kind of money whereas you can fly down to a Mexican resort where you booked a week with others, flew first class,check in. Show up for a night, eat a 700.00 meal decide that it's not for you and your girlfriend and leave fly out the next morning on first class, then call your ex wife buy her the same first class ticket plus access to his credit card and wires her an extra 1500.00 cash and she gets to spend the rest of the week with people who used to be family.
Meanwhile, he flies home, liquidated his business for a nice profit and he is back out of the country before she is done in Mexico.
True story.
quote:
Hell, I could do that tomorrow. It wouldnt make me rich, it would make me stupid. Rich and stupid are like dogs chasing cars, they dont last long.
------------
Although I'm having a little fun with the post, I do know a few folks IRL with stories similar to this.
E.g., A family owned a multigenerational business. They did very well, but lived conservatively within their means. The son hated their frugality. Fancied himself as quite the playboy. Sports cars, jetting around, partying with celebs, international adventures, the whole thing, and with pictures to prove it! He could not wait to be handed control of the heirloom business. Chomping at the bit. When he got it, he sold it immediately. The disappointment nearly killed his parents. Blew through both wives and the windfall with breathtaking quickness. Now basically has nothing. He tried to hire on in the old business, the one with his family name still adorning the placard, no dice.
This post was edited on 7/7/22 at 6:37 am
Posted on 7/7/22 at 7:00 am to NC_Tigah
Seriously?
You know this guy?
You know this guy?
Posted on 7/7/22 at 7:42 am to NC_Tigah
That’s unfortunate. But, you can’t fix stupid.
Money doesn’t fix stupid...stupid usually sets money on fire.
Money doesn’t fix stupid...stupid usually sets money on fire.
Posted on 7/7/22 at 7:56 am to SlidellCajun
quote:The guy who sold his family business? Oh yes. He's a relative. But I've known a quite a few people who lived high on the hog ... until they didn't. We were friends for several years with a financier who had buildings named after him. Centimillionaire-level stuff. At some point he let business things get away. Attempted a Ponzi to catch up. Got exposed. Facing total financial loss and major prison, he ensured his life insurance policy lacked a suicide rider, then he shot himself. Some very sad stories actually.
Seriously?
You know this guy?
Posted on 7/7/22 at 8:01 am to Grinder
It’s all about perspective. When I was a kid, I figured anyone that lived in a brick house was rich. Or had a nice fiberglass bass boat.
But being rich wasn’t necessarily a good thing with the camel through a needle’s eye and all that.
Times change.
But being rich wasn’t necessarily a good thing with the camel through a needle’s eye and all that.
Times change.
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