What Is “Wealthy”?

42 Replies

I found this UBS article while doing some research last night.  Some folks on BP may benefit from it:

What Is "Wealthy"?

After reading this and several related articles the consensus seems to be around $5M to be considered wealthy with "normal" investment rates.  Folks on BP can generally earn a higher yield than the overall population though so I would argue that closer to $2M - $3M would be the litmus test for many posters here.  

Any thoughts on this?

HI Bryan,

So they assume around 5M @8%ROI for 400k in annual income to become wealthy?

They're using lower yields from most of what I read.  Real yields net of inflation tend to be pretty lower if you're relying on corporate bonds.  

Wealthy is all a state of mind. Lol just kidding. Of course it's having lots of money. I think a lot depends on where you live. 5 mil in CA is ok to have a nice life. Won't be amazing, but you can buy a nice home and travel etc. If one can make 6% on their money, then 300k per year is ok. In the Bay Area it's ok, but you won't be wealthy at all.10 mil is better to feel wealthy.

Wealth to me is measured in time. Amount of time you can survive without a paycheck.  Most folks are a 'week' wealthy.  Some a month. 6 months? Getting tougher, right? How long before folks started defaulting on stuff once they were laid off in the recession?  Even the 'rich'.  Take away their JOB and nothing to show for it or withstand a storm.

$5MM or $10MM in the hands of an idiot does not mean wealthy. It may mean rich for a little while, but not wealthy.  Like a lot of folks on here, I don't have nearly that yet haven't had a w-2 job in 13 years nor will I ever have to get one again.  So what, right? By never having to answer to the man again, is one wealthy?   I'll go with yes.   

Originally posted by @Steve Vaughan :

Wealth to me is measured in time. Amount of time you can survive without a paycheck.  Most folks are a 'week' wealthy.  Some a month. 6 months? Getting tougher, right? How long before folks started defaulting on stuff once they were laid off in the recession?  Even the 'rich'.  Take away their JOB and nothing to show for it or withstand a storm.

I like this answer because it makes me feel very wealthy. 

At this point in life, I do not need to work at all if that was the choice and could live out the remaining years comfortably.  Can't afford a jet though.  :)

oh foolish people. If you own a house, have a car, basically a regular American poor average person. You are in the top 1% of the wealthy people in the world. 

Their will always be someone with more wealth than you, and most people with a lot less. 

And you take none with you when you die, and that could be tommorrow. Enjoy today

Originally posted by @Arlan Potter :

oh foolish people. If you own a house, have a car, basically a regular American poor average person. You are in the top 1% of the wealthy people in the world. 

Their will always be someone with more wealth than you, and most people with a lot less. 

And you take none with you when you die, and that could be tommorrow. Enjoy today

And you telling us something that we already know makes us foolish how? 

it doesn't, just a silly post. 

House and cars paid for. Daily expenses covered. Extra money when i need it. A beautiful wife and healthy children!!! Freedom to do what i want=wealthy. IMO!

Yes @Arlan Potter ....I agree your post is silly.  How about just not posting in the thread if you think it is silly?

Thanks to those that have made constructive posts.  

I think wealthy is all about having the money and the time to support your dreams. We are aiming for early retirement when my husband retires (god/navy willing). While I highly doubt we will have the money amounts outlined here. I will consider us very wealthy because we will be able to live comfortably and do our dream of sailing around the world after raising our children comfortably. 

Right now we are duel income, and on paper make GREAT money. Honestly its not my long term dream. We have money and no time, so honestly while I am wealthy in the bank, I am poor in being able to meet my dreams ;)

Wow , this thread took an ugly turn.  @Arlan Potter , I'm pretty sure I get the thought behind your post.  Basically, live for today in case there isn't tomorrow, right?  I will run with that thought and add that if you have the ability financially to do so, that would fit my definition of wealthy.

10 sources of income generating me $1m net income per year sounds about right.

After a period of time your income and wealth growth goes straight up quickly from compounding.

Frank

@Arlan Potter , I have never been able to wrap my head around the concept of "you can't take it with you." My money will outlast me, and will have a major effect on my community after I'm gone.

Money and real estate generally last longer than people do. There is a solid chance that my estate will still be exercising its power and influence in the year 2100.

Its all perspective... I see post on BP were the goal is to get to 5k a month of passive income and the poster feels they then have security for life and can quit the day job etc.

from my perspective and just interacting with all sorts of folks for all the years I have,, as one climbs the ladder usually expenses climb with you.. IE nicer home,, nicer car,, some trips. kids going to college.. then buy a home for kids when they get married that sort of the thing  next thing you know 5k is no going to cut it.

One of my mentors retired when his retirement income hit 70k a month ( none of it real estate related)  and he lives pretty nice lifestyle  but stays very active in business's he owns and runs.

for me personally I just really never even think about it much I just love doing real estate and real estate deals.. and some how it just all works out... 08 to 2010 being an exception and a total bummer on my end.

But  having said that and lived through the 08 to 2010  having CASH is important or paid for rentals in good enough areas that they can basically handle themselves without all the drama of low end C class stuff... A very nice A class multi on the west coast or class A MHP or 3 net lease class A space those sorts of blue chips would give me peace of mind.

@Steve Olafson and if I can't fly it I aint buying it... so no jet for me... just stick to the little bug smasher and 100 dollar hamburgers  LOL.

My self-definition of wealthy has always been, generational wealth, when you can surpass that gap that after estate taxes, you can take care of your heirs for the rest of their natural lives, with or without work.  You have become wealthy.

In a more specific goal oriented way, my thought of when I will personally feel like I am wealthy is when my passive income is supplying me a living "wage" of 100k, and still seeing my assets continue to grow. I'm sure as Jay has pointed out, as my true assets grow that mark is probably going to prove to be a moving target.

@Troy Fisher  the generational wealth is tricky one.

the mentor I mention took his company public and got a 8 figure pay day when it was bought by a Austalian concern.. he then put 10 million into trust for his two daughters.

they get a pretty nice stipend monthly ( they will never have to work) one of them lives a rock star lifestyle with no real cares and some pretty extravagant spending and not really in touch with the common man... the other is very grounded and what I would consider a really good person.. I think the handing it to the heirs needs to be done very very carefully. as to not corrupt.  But thats just my opinion I have never been in their shoes just observed.

I think it's a little more abstract. To me, wealthy is the point when if I so choose, I could never work again and still live comfortably off of the wealth that I've accumulated.

@Jay Hinrichs - While I agree that different people handle money differently, I think that in regards to the question, "what is wealth?" I'll reiterate my answer as being enough to pass on to your children (after estate taxes) enough money to live the rest of their lives without having to work.  

Whether this is the best way to use generational wealth is very debate-able. Two of richest men (#1 Bill Gates & #3 Warren Buffet) in the world are planning on donating most of their wealth with a smaller portion going to their children.  On the other hand, one of the wealthest individuals passed away and left the majority to his heirs, and now they rank #8, #9, #11, #12 on the list (The Waltons).

MTV has glorified these trust-fund children and made it unseemly to be able to pass wealth on to children who never worked for the money they made.  It's possible to do so, but the question of whether you should or how you should is a very tough one.

I think we can all agree that wealth is somewhat relative to one's perspective. For me wealth is the ability to pursue your passions without having to worry too much about earning a big enough paycheck.

Though whether that happens at 5k a month or 20k is an individual matter. 

I agree with Steve :: 

Wealth to me is measured in time. Amount of time you can survive without a paycheck. Most folks are a 'week' wealthy. Some a month. 6 months? Getting tougher, right? How long before folks started defaulting on stuff once they were laid off in the recession? Even the 'rich'. Take away their JOB and nothing to show for it or withstand a storm.

As we all know different locations and lifestyles require a different amount of money; I believe that the idea should be to build enough "cashflow" to sustain and (over time) expand they lifestyle we are familiar with.  I imagine a future where I work a half a day maybe three times a week and use the rest of my time to make memories with my family.

What Wealth means to me means to be rich in these 4 areas, not just in financial terms.

1. Spiritual 2. Emotional 3. Physical Health 4. Financial.

Wealth to me is being happy.

Everyday I go to work I have no traffic....... : )  Go across the hall to my office. I work my hours.

I love to run my company and do commercial real estate. Even when you don't have to work if you get enjoyment it is something you get excited about. Now at this point in my career I can pick and choose my clients and what I put my time into.  

I look forward to the phone ringing daily. It could be someone with 2,5,10,20 million net worth or more wanting to invest. It could also be someone with 50k wanting to buy a 1 million commercial property! lol The 50k I kindly wish them luck and tell them I cannot help.

Time goes fast. I can't believe I turned 40 end of last year. When you are a kid you want it to go fast so you can grow up and have your parents stop telling you what to do! When you become an adult you want the clock to slow down so you can experience life fully and relax.

I want my legacy not to be about how much money I amassed but how many people I connected with and touched in a positive way.

My dad was killed in a car wreck when I was 16. I remember the funeral and something that has stuck with me until today. My dad was a postal supervisor at the main center in Atlanta. When people showed up for the funeral I was shocked. Lot's of the people I had never seen before or knew who they were. There must have been over the hours around 1,000 people come by .They would say my dad was an awesome man and cared about others. We had people bring over pallets of food and offer monetary assistance.

It made me feel really good that people were honoring my father. I hold that close to my heart everyday and it is priceless. The money is nice and I am comfortable but I feel leaving a positive imprint on the world is worth more than dollar bills.

I have ultra high net worth clients 25M net worth or more and most are just down to Earth people who have foundations and charities. They make money but also give a positive contribution to society.

Some people love money itself but I see it as something to help you do the things you want in life. 

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