How much Net Worth to be rich?

[Chaszmyr]

Having a nice house, a nice car or two, and enough left over to not have to worry about money is what I think it takes to be rich, and that takes at least $5m, more for people with expensive tastes, so I think $10m is a good figure.

 

[BoyBach]

For me the key to defining 'rich' is that your wealth needs to 'liquid', i.e. owning a £1,000,000 pound house or having a $1,000,000 share portfolio doesn't mean that you're a millionaire, it simply means that you potentially have a million pounds/dollars if you sell everything. Having £1,000,000 in your bank account ('liquid assets') makes you a millionaire.

As for what I'd class as being rich, it's the old chestnut of not having to ask the price of something before you buy it!

(By the way, using my own formula, I'm most definitely not rich!)

 

[Patrick425]

already posted this in another thread, but:

ONE MILLION DOLLARS!

 

[NC MacGuy]

Nearly everyone who plans on retiring before 70 will need $1M in assets to see them through.

I think $3M is rich. Now if you have $1M at 20-30 years old, that's rich.

 

[Rodimus Prime]

I want to say to retire at an income of around 100k in today dollars we need around 6 or 7 mil in the bank. This is not counting any of our other assets that is just pure cash.

 

[CalBoy]

How much is a decent size house in America,

It really depends on where you are. In the Bay Area the price per square foot ranges from about $200-$700 depending on where you are. If you're in a moderately good neighborhood you're looking at around $400 minimum.

My parents house, for example, is 1,600 square feet and is valued at ~$700k.

The same amount of cash can buy you more than 3,500 square feet in states like Arizona, Texas, or any number of other states with low population density.


As for my vote in the poll ($10 million), I chose it because I took into account the value of one's home, retirement account(s), and the cost of maintaining property and other factors.

Roughly speaking, I counted $2 million for a home (some of that is set aside to consider property taxes and periodic upgrades that are needed to keep a home within code), $3 million for a retirement account if we assume that the person will retire within the next 10 years and will be able to withdraw 4% on the account per year (3% will be set aside to counteract inflation for a total of 7% assumed growth).

The remainder I considered necessary to generate enough income to live a life of modest luxury ($5 million should earn $200,000/year with enough left over to fight inflation).

You could do with less, but I think that a net worth of $8 million is really needed before you can be "rich." This is because I believe that in order to be "rich," you should have your money working for you, rather than you working for your money.

 

[rhett7660]

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

I would even say, 1-2 years in the bank right now. If you are talking about retiring then that is a different number.

Someone else mentioned the millionare next door. Great book. There are a ton of websites/books that talk about living below/beneath your means.

If you are only getting .01 or .1 percent on your checking/savings account, start shopping around for another bank to hold your savings. A couple I can think of off the top of my head:

www.etrade.com
www.ingdirect.com
https://www.emigrantdirect.com/EmigrantDirectWeb/index.jsp

 

[jabrowntx]

Add about 6 more zero's to your last number -- that's rich