Compound interest has been very good to me!!
Barring any catastrophic circumstances I'll be fine. But I'm not rich.

Rich is earning a great salary, and last until your unemployed.

Wealth is the ability to live off your earnings in manner that pleases you.

"Rich" is such a subjective term that it's practically worthless as a descriptor. I think "rich" is relative, and for most people "rich" would be someone who is doing better financially than they are.

To a homeless guy who literally doesn't know where his next meal will come from, anyone with a home, refrigerator, pantry with some food--would have to seem "rich".

To middle class folks, people with vacation homes, no real financial worries-those folks are "rich".

To those folks, "rich" people have airplanes, yachts, servants, and such.

Rich, ultra-rich, wealthy--too many terms.

Rich is having your health, your spouse having her health and getting along well with them. Children if you have them that are healthy and you have a great relationship with. Dogs.

Land to piss off your back porch. Friends who understand you and make you laugh.

Money is nothing without the above. It is shit. As i age, 55 currently i strive for less with quality and gifts from my warm hands to my children.

^^^ I think we can all agree on that, but that's not really what the OP is asking about.

I think Artie may have nailed it. I do believe that it makes a difference where one is living and what they are trying to do. There are probably places in this country where $2M would be rich and would allow for a lot of flexibility. There are other areas where $10 doesn’t seem particularly rich.

Being happy in your emotional life is being rich.

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.

These days that's not rich.

People who have time and money to do what they went, when they want.

quote:

Originally posted by architect:
....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.....

This is about the beginning of what I would consider "rich" in today's inflated currency.

Rich is when you have F U money. Having enough money to do what you want, when you want. Beling a multi millionaire with no time is just as bad as having plenty of time and no money. Each person is different in what they want, but having the time and money to live life at YOUR PACE, is rich. You only have so much time.

As for the $2 million $100k unrestricted, that is rich in most countries in the world. Most countries you could live pretty well without ever working with that kind of money and residual income from $2mil.

quote:

Originally posted by ZSMICHAEL:
Being happy in your emotional life is being rich.

I personally believe that "being happy" is an elusive goal. "Happy" for many people is something that they are always chasing and never keeping it.

IMO it is far better to be "Content" is our lives. Being content does NOT mean settling for less.

Being content means being satisfied with what we have. That's absolutely crucial IMO.

Money is important of course.

If you can live your live with the "keeping up with the Jones or your neighbor", most likely you will never be happy. It means being satisfied with what you do have.

It's between your ears and in your heart.

BTW I have a book I highly recommend every one read. It' titled "The Millionaire Next Door, The Surprising Secrets of America's Wealthy".

I read it every year. Good thing it's a hardcover book.

LINK: The Millionaire Next Door

"The Millionaire Next Door: The Surprising Secrets of America's Wealthy
Book by Thomas J. Stanley

The Millionaire Next Door by Thomas J. Stanley and William D. Danko is a non-fiction book that reveals the surprising habits of America's wealthy, showing that most millionaires live below their means, budget, and prioritize saving and investing over flashy displays of wealth, often being "under accumulators of wealth" (UAWs) compared to their high-income but less wealthy peers (PAWs). The book challenges the stereotype of the rich as high-spending, luxury-loving individuals, instead highlighting traits like frugality, hard work, and financial discipline as the true keys to building wealth.
Key themes and findings.

Wealth is not income: The book distinguishes between high-income earners and actual wealth accumulators, showing that many high-earners spend all their money, while others with modest incomes build significant net worth.
Frugality is common: Many millionaires bargain shop, drive used cars, and live in modest homes in middle-class neighborhoods.
Discipline and planning: Wealthy individuals often budget, invest consistently, and live well below their means.
"UAWs" vs. "PAWs": The authors contrast "Under Accumulators of Wealth" (high income, low net worth) with "Prodigious Accumulators of Wealth" (high net worth, often with average incomes).
Family and children: Many millionaires raise children who are unaware of their family's wealth until adulthood, teaching them financial responsibility.
Authors:
Thomas J. Stanley, Ph.D.: A researcher who studied the affluent for decades.
William D. Danko, Ph.D.: An associate professor of marketing who collaborated on the research.

Key themes and findings:
Wealth is not income: The book distinguishes between high-income earners and actual wealth accumulators, showing that many high-earners spend all their money, while others with modest incomes build significant net worth.
Frugality is common: Many millionaires bargain shop, drive used cars, and live in modest homes in middle-class neighborhoods.
Discipline and planning: Wealthy individuals often budget, invest consistently, and live well below their means.
"UAWs" vs. "PAWs": The authors contrast "Under Accumulators of Wealth" (high income, low net worth) with "Prodigious Accumulators of Wealth" (high net worth, often with average incomes).
Family and children: Many millionaires raise children who are unaware of their family's wealth until adulthood, teaching them financial responsibility."

I just bought a gently used (looks brand new) NOS hardcover from one of the internet based book sellers/resellers.

And you have to understand the time vs money vs health relationship. Why work until you're 70, have $$$$ in your name, but now you've got bad health and can't enjoy life.

Time & $$$$Money & Health.
.

quote:

Originally posted by ArtieS:
What you want, when you want, where you want, and how you want, without consideration of the cost.

I think this is spot on.

People like to throw out arbitrary numbers, but at the end of the day, it doesn't work well. One set of numbers is considered comfortable for a person in their 40s, but wealthy for someone who is 68 years old. Or for one living in a high-priced zip code compared to another who lives in an area with a lower cost of living.

A lot of people confuse net worth with income. I saw a lot of clients that made sick incomes 7 digits even 8 digits in W2 income and after giving almost half to the .gov spent almost all the rest. I also had clients that had 8,9 digit net worths and very modest w2 income. Several hundred k. If you have enough wealth to buy anything you want and not have to work for any reason and your health care and housing and other personal needs are all taken care of I’d consider you rich. If your not careful you can screw it up and have to go back to work bug likely not.

Now, FU money like Elon or Zuckerberg or Bezos is another level.

I know a LOT of people with net worth 1-3mm and 1mm+ in liquid assets including IRA and they are not rich and would not consider themselves rich. They are comfortable but likely have a mortgage and need a job for health care and are saving for kids college and retirement etc. a divorce or other traumatic event could blow it all up.

I read this a few years ago - pretty wild when you think about it …

MDS



I can answer this one. For some reason, I attract these people into my life. I don't do anything super extraordinary. I am not famous. But I count many people with ultra high net wealth among my close friends and I have spent more time than even I can believe with 8 different billionaires. This is not just meet-and-greet time. This is small group and even one-to-one time. I dated the daughter of one billionaire several decades ago. So I have gotten a peek into this life.

Let's get one thing out of the way. There are gradations of rich. I see four major breaking points:

Worth $10mm-$30mm liquid (exclusive of value of primary residence). At this level, your needs are met. You can live very comfortably at a 4-star/5-star level. You can book a $2000 suite for a special occassion. You can fly first class internationally (sometimes). You have a very nice house, you can afford any healthcare you need, no emergency financial situation can destroy your life. But you are not "rich" in the way that money doesn't matter. You still have to be prudent and careful with most decisions unless you are on the upper end of this scale, where you truly are becoming insulated from personal financial stress. (Business stress exists at all levels). The banking world still doesn't classify you as 'ultra high net worth'

Net worth of $30mm-$100mm

At this point, you start playing with the big boys. You can fly private (though you normally charter a flight or own a jet fractionally through Net Jets or the like), You stay at 5 star hotels, you have multiple residences, you vacation in prime time (you rent a ski-in, ski-out villa in Aspen for Christmas week or go to Monaco for the grand Prix, or Canne for the Film Festival--for what its worth, rent on these places can run $5k-20k+ per NIGHT.), you run or have a ontrolling interest in a big company, you socialize with Conressmen, Senators and community leaders, and you are an extremely well respected member in any community outside the world's great cities. (In Beverly Hills, you are a minor player at $80 million. Unless you really throw your weight around and pay out the nose, you might not get a table at the city's hottest restaurant). You can buy any car you want. You have personal assistants and are starting to have 'people' that others have to talk to to get to you. You can travel ANYWHERE in any style. You can buy pretty much anything that normal people think of as 'rich people stuff'

$100mm-$1billion

I know its a wide range, but life doesn't change much when you go from being worth $200mm-$900mm. At this point, you have a private jet, multiple residences with staff, elite cars at each residence, ownership or significant control over a business/entity that most of the public has heard of, if its your thing, you can socialize with movie stars/politicians/rock stars/corporate elite/aristocracy. You might not get invite to every party, but you can go pretty much everywhere you want. You definitely have 'people' and staff. The world is full of 'yes men'. Your ability to buy things becomes an art. One of your vacation home may be a 5 bedroom villa on acreage in Cabo, but that's not impressive. You own a private island? Starting to be cool, but it depends on the island. You just had dinner with Senator X and Governor Y at your home? Cool. But your billionaire friend just had dinner with the President. You have a new Ferrari? Your friend thinks their handling sucks and has a classic, only-five-exist-in-the-world-type of car. Did I mention women? Because at this level, they are all over the place. Every event, most parties. The polo club. Ultra-hot, world class, smart women. Power and money are an aphrodisiac and you have it in spades. Anything thing you want from women at this point you will find a willing and beautiful partner. You might not emotionally connect, but damn, she's hot. One thing that gets rare at this level? friends and family that love you for who you are. They exist, but it is pretty damn hard to know which ones they are.

$1billion

I am going to exclude the $10b+ crowd, because they live a head-of-state life. But at $1b, life changes. You can buy anything. ANYTHING. In broad terms, this is what you can buy:

Access. You now can just ask your staff to contact anyone and you will get a call back. I have seen this first hand and it is mind-blowing the level of access and respect $1 billion+ gets you. In this case, I wanted to speak with a very well-known billionaire businessman (call him billionaire #1 for a project that interested billionaire #2. I mentioned that it would be good to talk to billionaire #1 and B2 told me that he didn't know him. But he called his assistant in. "Get me the xxxgolf club directory. Call B1 at home and tell him I want to talk to him." Within 60 minutes, we had a call back. I was in B1's home talking to him the next day. B2's opinion commanded that kind of respect from a peer. Mind blowing. The same is true with access to almost any Senator/Governor of a billionaires party (because in most cases, he is a significant donor). You meet on an occassional basis with heads-of-state and have real conversations with them. Which leads to

Influence. Yes, you can buy influence. As a billionaire, you have manyways to shape public policy and the public debate, and you use them. This is not in any evil way. the ones I know are passionate about ideas and are trying to do what they feel is best (just like you would). But they just had an hour with the Governor privately, or with the Secretary of Health, or the buy ads or lobbyists. The amount of influence you have can be heady.

Time. Yes, you can buy time. You literally never wait for anything. Travel? you fly private. Show up at the airport, sit down in the plane and the door closes and you take off in 2 minutes, and fly directly to where you are going. The plane waits for you. If you decide you want to leave at anytime, you drive (or take a helicopter to the airport and you leave. The pilots and stewardess are your employees. They do what you tell them to do. Dinner? Your driver drops you off at the front door and waits a few blocks away for however long you need. The best table is waiting for you. The celebrity chef has prepared a meal for you (because you give him so much catering business he wants you VERY happy) and he ensures service is impeccable. Golf? Your club is so exclusive there is always a tee time and no wait. Going to the Superbowl or Grammy's? You are whisked behind velvet ropes and escorted past any/all lines to the best seats in the house.

Experiences. Dream of it and you can have it. Want to play tennis with Pete Sampras (not him in particular, but that type of star)? Call his people. For a donation of $100k+ to his charity, you could probably play a match with him. Like Blink182? There is a price where they would simply come play at your private party. Love art? Your people could arrange for the curator of the Louvre to show you around and even show you masterpieces that have not been exhibited in years. Love Nascar? How about racing the top driver on a closed track? Love science? Have a dinner with Bill Nye and Neil dGT. Love politics? have Hillary Clinton come speak at a dinner for you and your friends, just pay her speaking fee. Your mind is the only limit to what is available. Because donations/fees get you anyone.

The same is true with stuff. You like pianos? How about owning one Mozart used to compose music on? This is the type of stuff you can do.

IMPACT. Your money can literally change the world and change lives. It is almost too much of a burden to think about. Clean water for a whole village forever? chump change. A dying child need a transplant? Hell...you could just build and fund a hospital and do it for a region.

RESPECT. The respect you get at this level is just over-the-top. You are THE MAN in almost every circle. Governors look up to you. Fortune 500 CEOs look up to you. Presidents and Kings look at you as a peer.

PERSPECTIVE. The wealthiest person I have spent time with makes about $400mm/year. i couldn't get my mind around that until I did this: OK--let's compare it with someone who makes $40,000/year. It is 10,000x more. Now let's look at prices the way he might. A new Lambo--$235,000 becaome $23.50. First class ticket internationally? $10,000 becomes $1. A full time executive level helper? $8,000/month becomes $0.80/month. A $10mm piece of art you love? $1000. Expensive, so you have to plan a bit. A suite at the best hotel in NYC $10,000/night is $1/night. A $50million home in the Hamptons? $5,000. There is literally nothing you can't buy except.

Love. Sorry to sound so trite, but it is nearly impossible to have a normal emotional relationship at this level. It is hard to sacrifice for another person when you are never asked to sacrifice ANYTHING. Money can solve all problems for someone, so you offer it, because there is so much else to do. Your time is SOOOO valuable that you ration it. And that makes you lose connections with people.

Anyway, that is a really long answer, but I have a very unique perspective because I have seen behind the curtain of the great and mighty OZ. just wanted to share

EDIT: Wow! An unbelievable response to this (8x gold and 6000 upvotes. OMG) Thank you for all the comments and PMs. I am working 14 hour days right now, so I can't answer most, but to answer the most common PMs:

Seeing all of this doesn't make me want to get into the top tier. Different lives have the same emotional degree of difficulty: I met Sylvester Stallone at a party a few months back for the first time. Great guy. Has a beautiful, smart wife and a great career. He had a special needs son who died young. Nobody has it all. Nobody.

10K

^ That actually sounds awful. And that's not jealousy talking...I really wouldn't want to live like that. I'm a lot happier with the life I've got.

quote:

Originally posted by ArtieS:
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 think this is a very good definition. I would add a corollary to it though; having good health as well.

When you can stay at a hotel on the Boardwalk, but still have a Baltic Avenue mindset.

Nobody wants to have 10 million dollars, they only want to spend 10 million dollars.

Also age dependent. A million at age 90 is different than a million at 30

Rich is "Fuck you money"

meaning, no matter who they are, you can say "Fuck you" and walk away.