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How much Net Worth to be rich?
- Thread starter wordmunger
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Net Worth means the value of all your assets (home, investments, bank account, car) minus your debts (mortgage, credit card, etc.)
Oh ok, thanks!
I think to be rich you need to have a net worth of over a million, ya know coz of all your Fararris and mansions
There was a study of wealthy people (I can't find the link) which asked them how much money they would need to be really comfortable. No matter how much money they had, nearly everyone responded that they would need about twice as much money as they possessed. If you had $10 million, you thought you needed $20 million. But if you had $20 million, you thought you needed $40 million.
I'll go with Donald Trump's answer: "you need to have enough in the bank that you can make $250,000 per year without working".
Sounds good enough to me.
Sounds good enough to me.
I'll go with Donald Trump's answer: "you need to have enough in the bank that you can make $250,000 per year without working".
Sounds good enough to me.
I hope he meant "investment portfolio" rather than bank account. My bank account generates 0.1 percent interest per year. That means I'd have to have $250 million to make that much money! But if you invest in mutual funds, it's not hard to make an average of 7 percent a year or so, meaning you'd only need $3.5 million or so to earn that much.
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man, these rich people. If you have half a brain in your head you can live comfortably with a fraction of the money they make.
man, these rich people. If you have half a brain in your head you can live comfortably with a fraction of the money they make.
well his estimated net worth is $3Billion so either way he greatly exceeds it.
Net worth in $ is probably going to have to be $50,000,000 with the way that the dollar is going
How much is a decent size house in America, I would say a decent sized house with no mortgage + enough to pay all bills inclusive + $50,000 dollars would be rich.
I *hope* you mean per year. Otherwise, I need to switch banks -- that's a rate of return of 30 percent a year. You would more than double your money every three years!
Nope its per month, its a savings account for teenagers though and I only have about £475 in there (thats going towards the BlackBook).
I have seen adverts on TV for Halifax offering 6.5% so I will look in to that.
EDIT: After checking, i think is per year actually, its more than 2.5% though, according to my banks website its 5.25% AER (5.13% gross), so Halifax still has higher interest rate! Damn!
Suggest that you find another bank or savings institution for your savings needs. That is way to low right now. You should be able to get 2 plus percent as a minimum right now.
According to the book, "The Millionaire Next Door," they use this formula to determine if you are wealthy:
"Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be."
So if you are 40 years old, and your pretax annual household income from all sources is $35,000, you should have a net worth of $140,000.
It all depends on your lifestyle.
A lot depends on location. $1,000,000 net worth is a ton in a small town in Texas, where the cost of living is low--let alone in other countries where the cost of living may be lower--whereas it might not be as much in NYC or San Francisco.
Age is an even bigger issue. Having a net worth above $0 at 21 may be impressive (most people who've been to college will be deep in the hole due to loans), whereas at 65 or so, you should be at your peak net worth before you head into retirement. Anyone with a low net worth in their 60s is in trouble.
So $1,000,000 net worth at 25 in small town Arkansas? Super rich. $1,000,000 net worth in NYC at 67, not so rich.
Age is an even bigger issue. Having a net worth above $0 at 21 may be impressive (most people who've been to college will be deep in the hole due to loans), whereas at 65 or so, you should be at your peak net worth before you head into retirement. Anyone with a low net worth in their 60s is in trouble.
So $1,000,000 net worth at 25 in small town Arkansas? Super rich. $1,000,000 net worth in NYC at 67, not so rich.
Meh. Not that big a deal to me -- the money I keep in the bank is for day-to-day expenses, and what I'm getting from that is the convenience of a neighborhood bank, no monthly fee, etc. For longer-term savings (<1 year) I keep my money here. About 2.5 percent/year. For longer-term, stock market mutual funds.
Got ya. I thought you were referring to your savings when you mentioned the percent.
Mine is a bit over 3 percent right now.
Japan's savings interest rate is really low. About 6/10's of 1 percent.
Yeah. It's £ equivalent is now my annual IT hardware + services budget
My dump is worth a bit less than that though. Even then it's a poky hole. The point raised by monoblithe is relevant, as well as location of course.
£1million was mine but it might need to be more. As I said in the other thread houses here are quite expensive. I'd like a good £750k home (modern with good views and large garden rather than it being a giant house), a gite in southern France, a nice car, maybe a sailing boat (not yacht) for the near by lake.
Essentially another way of saying that should save 10% of your income right off the top, except that it's less accurate for people who are early in their careers. It also doesn't accurately model
If you were a 22 year old making $50,000 a year at your first post-college job, that formula would yield $110,000 -- impossible for somebody who doesn't even make half that in a single year. I've been working for a few years since college and don't have close to $100,000 in equity.
I would say a better rule of thumb is this:
Save 10% off the top (into 401k or IRA, e.g.) -- ALWAYS. If you can't save 10% now, you'll never be able to save 10%.
This doesn't mean your savings is capped at 10%, it means your savings is floored at 10%. Any additional money left over at the end of the month should be invested in high growth assets.
If you can't save 10% per month, I don't think you will ever be wealthy.
I define as being able to live for 10+ years with your current/comfortable lifestyle if you lost your main source of income. Hard to put a number on that