Just wondering what you guys would consider a person/couple as being rich?
Is there a mid-level class as well off?
Also what criteria is used to acheive that level, is itcash (bank accts,401ks,ect) or do you include all property also,such as homes, vehicle values, jewelry ect?

I have often thought of this...

I think it has to be cash. I know friends that have plenty of assets AND plenty of corresponding debt. On the surface they look "rich" but a common $1,000 emergency that requires cash would rock their world.

I don't think there's any set threshold or criteria. It is also not necessarily expressed in purely monetary terms. There's an emotional and perception component to it.

Net worth is a key metric.

Liquid assets is another key metric.

If you have high net worth and sufficient liquid assets, you are rich.

A practical definition of "rich" might be a person with net worth of $2 million and liquid assets of $100K in unrestricted bank accounts.

If you are just talking about value in terms of $ then lack of debt is near the top. It is key to being financially free. Second is living with in your means. Third is having assets that are easily turned into cash. Cash in the bank is 4th. Beyond that are owning things that you can use to your benefit in some form or fashion.

I'm sure it differs by person, but I think a baseline is that you never need to worry about having enough money to do what you need to do. You may choose to live in a modest house, drive a "normal" car and not be extravagant, but "rich" to me means that when the starter goes, you call someone, the car disappears, and it comes back running, and you don't worry about what it took to get it done. You didn't have to not have steak, you didn't have to spend the time taking it to the shop, you didn't have to worry that they might find that the tires need to be done too, you just make it happen.

To me, the ability to Jean Luc Picard it; simply declare "make it so" is the essence of rich, whether you are having your car repaired, or boarding the Gulfstream to take you to Nassau, where your yacht is waiting.

What you want, when you want, where you want, and how you want, without consideration of the cost.

As for a level below rich, there is clearly "comfortable" where you can pretty much live your life without undue consideration, but you might not be driving that Porsche.

I would use total net worth to define wealth. Just because it's not liquidable doesn't mean it's not real.

As far as the boundary for rich, that's in the eye of the beholder. I would tend to look at a statistical breakdown. You can't use a normal distribution because the average net worth is skewed way beyond the median. Maybe the top 0.5% as a boundary? Just throwing out a number. That would be a household net worth of $10M to $20M according to some sources I just Googled.

Enough that math for chartering/owning a private jet starts to work.

If you are doing the same things everyone else is doing, then you are not rich. Someone worth $2.3 million is still going to the grocery store, still worrying about how the kids are paying for college, still managing their money in retirement, etc. These may eat out more at better places, they may take nicer vacations, have nicer cars, spend more at the grocery store, etc. but they are still schlepping their bags at the airport.

Rich is when your boat or airplane requires a crew, our your yard requires a full-time groundskeeper, your house requires a maid and a cook, or your garage requires a full-time mechanic.

Lower middle class, middle middle class, upper middle class, they all do the same stuff. Rich people are next level.

It's subjective. A fairly recent Charles Schwab study found that Americans feel a person is rich when they have a net worth of 2.3 million.

I think it's all relative. I like ArtieS's definition as it relates to wealth in 21st century America.i think I'd also add to that the idea that one could stop working and still maintain that lifestyle for the rest of their life...the ability to truly do whatever you want, whenever you want (within the law) without having to worry about the consequences. Basically what's knows as "F U money". I know people who have reached that point and continued working because they want to. I know others who got there in their late 30s and retired, because they had other priorities.

Given the choice I'd pick the latter, but it's not something I'll ever have to worry about. We've got no debt and we're making ends meet with some extra, but I'll be working well into my 60s or 70s to keep us there, and that's assuming inflation doesn't eat up all my retirement before I get there.

I would call you rich if your net worth was 10 million and up. Until then you are just doing pretty good.

quote:

Originally posted by 92fstech:
I think it's all relative. I like ArtieS's definition as it relates to wealth in 21st century America.i think I'd also add to that the idea that one could stop working and still maintain that lifestyle for the rest of their life...the ability to truly do whatever you want, whenever you want (within the law) without having to worry about the consequences. Basically what's knows as "F U money".

Agreed. That would be my definition as well.

But it's not an exact dollar amount, since that would vary based on things like family size, desired lifestyle, and location.

Rich to me is having enough investments where you can live the same or better lifestyle off what they make without diminishing the principle all while no longer having to work at all.

Wealthy is a whole different ballgame.

Elon Musk

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Originally posted by mrvmax:
Elon Musk

Understatement of the year.

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Originally posted by old rugged cross:
If you are just talking about value in terms of $ then lack of debt is near the top. It is key to being financially free.

This.

I know a couple who have new cars, eat out a lot, take a couple of vacations per year, yet are living month-to-month and carry credit card debt.

Even though they are in their mid-60s they both need to work and their adult son told me that they “have nothing saved”.

quote:

Originally posted by 4MUL8R:
Net worth is a key metric.

Liquid assets is another key metric.

If you have high net worth and sufficient liquid assets, you are rich.

A practical definition of "rich" might be a person with net worth of $2 million and liquid assets of $100K in unrestricted bank accounts.

Too low, I'd put it at a net worth of over $20million with liquid assets of at least $1million.

I think a more applicable financial situation might be when you have enough to live the rest of your life in comfort, and still be able to leave a substantial inheritance. Of course, what that translates to in actual $ depends on the individual's tastes and lifestyle.

Another metric might be when you are making more passive income from your investments than you can possibly spend. Some years ago I did a thought experiment as to how much that might be, and I came up with $100trillion. That would allow substantial manufacturing capability, a private airline/airforce, navy, and army, multiple island residences, and still have money "left over" for charity, a PAC, and taxes. Of course, there has been substantial inflation since then, probably would need more now.

It is when you don't HAVE to balance your check book !

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Originally posted by trapper189:
Enough that math for chartering/owning a private jet starts to work...

HA! Yeah, that about defines it. Good post.

quote:

It's subjective. A fairly recent Charles Schwab study found that Americans feel a person is rich when they have a net worth of 2.3 million.

If you have a net worth of $2.3 million these days I would say you are comfortably well off. If you manage it well, you will never have to work or have financial worries. But you're still middle class.

Having enough to continue living as you do is not rich. You weren’t rich while you were working you don’t magically become rich by not working.

I agree with the above guy. 20 million and 1 million in cash. My 10 million comment wasn’t flippant. It is the bare minimum to me. And to you “it’s not really a number” guys. Of course it’s a number. It’s like that famous quote, I can’t define pornography but I know what it is when I see it.

10-20 million. And of course that means you don’t have 10-20 million in debt. That isn’t rich. That’s leveraged. Totally different.