I had lunch with my accountant the other day. Sabino is more than a financial advisor to me — foremost, he’s a close friend. I told him about my current circumstances, about how I’m now making more as a writer than I did when I worked at the box factory, about how I’ve been saving money, about how Kris and I are beginning to contemplate paying more on our mortgage.
“How does it feel to be rich?” he asked me. “Has it changed you?”
“What do you mean?” I said. “I’m not rich.”
But then I paused and thought about it. “Oh,” I said. “Maybe I am.”
I’ve repaid my consumer debt. I’ve saved $10,000 for emergencies. I’m setting aside money for retirement. I live in an 1800 square foot home on half an acre of land. My wife and I are paying more than the required amount on our mortgage. Though my income is variable (and has dropped significantly in the past month), I make enough to support myself while doing something I love. Kris has a stable job that she loves. We own a lot of Stuff — so much Stuff, in fact, that I sometimes feel oppressed by it. By any objective measure, I am rich.
“Well,” I said. “I guess being rich doesn’t feel much different than being poor. I still worry about having enough to pay my bills. Despite the fact that I have a huge cushion in savings, Kris and I strive to be frugal. We’re always looking for new ways to save money.”
I thought for a moment. “What about you?” I asked. “Do you feel rich?”
Sabino smiled. “You know how I’m always joking about being a ‘poor migrant worker’? There’s some truth to that. When I imagine myself, I’m still the boy who came here from Mexico, still the boy who worked in the fields. I’m not the man who owns an accounting firm. When I think of myself, I think of how poor I was, even though I’m not poor any more.”
I was fascinated. When I considered it, I realized I agreed with him. I, too, was raised in poverty, and now that my economic class has risen, I still have that mindset. On some level, I know I’m wealthy, yet I still think of myself as poor all of the time.
The truth is, I live in a nicer home than my parents ever owned. I’ve saved more money than they ever saved. I earn more money than most people earn. I have more Stuff than I’ll ever need. I am rich.
Later, I told Kris about my conversation with Sabino. “Do you really feel poor all of the time?” she asked.
“I do,” I said. “I know it’s irrational. I know I have more than 99% of the world’s population, but I still feel poor. It makes me wonder: What does it mean to be rich?”
“Exactly,” Kris said, and she told me about a conversation she had with her friend Rhonda today. Kris had mentioned in an offhand way that she and Rhonda were rich.
“I’m not rich,” Rhonda said. “I still have to come to work every day.”
When pressed, Rhonda elaborated, “I have this concept of what it means to be rich. Rich people keep buying Stuff. They don’t think about what it means to consume in the way they’re consuming. When I think of rich people, there’s a negative connotation. That’s part of why I don’t want to be called rich. Rich people are selfish. The rich don’t care about other people.”
Kris and Rhonda tried to decide: Does being rich mean having a large income? Does it mean having a certain net worth? Are the rich selfish? Is being rich only a state of mind? Or is it something else entirely?
Are two people with equal $100,000/year incomes rich? What if one has $100,000 in credit card debt? Is he still rich? What if one has higher expenses because she has four children? Is she still rich?
I think most of us would agree that a person with a $20,000 income and three kids is poor. But what if somebody earns $20,000 a year, lives a frugal lifestyle, and is able to save $5,000 each year in a Roth IRA? If you have a small income but you’re a good saver, does that make you rich? Is this a bad thing?
“All this makes me think that money isn’t the answer,” I said after Kris told me her story. “It makes me think that being ‘rich’ doesn’t have anything to do with how much money you have. But what then does it mean to be rich?”
Ostensibly, the aim of this blog is to get rich slowly. My goal is to build wealth. But what is wealth? What does it mean to be rich? If becoming rich is a goal, what does that mean to me, and to the people around me? Is it all about money? Or is there something more to the equation, some sort of social capital?
Although I don’t write about them often, I ask myself questions like these all the time.
This article is about Psychology, Real-Life
SEARCH FOR RECENT ARTICLES
So many of these comments indicate a total lack of understanding of wealthy people.
Being “rich” does not mean you no longer go to work every day. Most millionaires and billionaires work. They have found their callings and passions, which is how they got rich and why many of them will work until they die. They don’t have a poor mindset of clocking into a miserable job for exactly 40 hours per week.
Being “rich” doesn’t mean you buy a lot of stuff. Lots of rich people don’t buy a lot of stuff — that’s how they got rich, or they don’t care what you think of them (ie, Sam Walton and his old pickup truck), or they have learned that happiness and contentment do not come from accumulating material objects.
Being “rich” does not mean not having to worry about money. Lots of rich people worry about money even if it’s not rational. People can have millions in the bank and still think they are “poor” because they are comparing themselves to people with even more money, because they are greedy, etc.
For me, being rich is partly a mental choice of realizing that I have enough, that my basic needs are met and plenty of my wants are also met, and that I’m living better than 95% of humans around the world.
Practice gratitude and you’ll feel richer.
loading....
Money Mag Interview of Jack Bogle:
Question: Vanguard is a not-for-profit company. If you’d organized it differently, you’d be a billionaire today. Any regrets?
Answer: I read this story recently: There’s a big cocktail party on Martha’s Vineyard. Someone comes up to this writer, I think it’s Joseph Heller [author of "Catch-22"], and says, “Joe, see that guy over there? He’s a hedge fund manager, and he made more money yesterday than you made on all the books you have ever published.”
Heller looks over, pauses and says, “Yeah, but I have something he’ll never have: enough.”
And I have enough too.
loading....
I define rich as, “how long one can survive maintaining current lifestyle should income stops today”.
A low income but frugal person is likely to be “richer” than a high income person that lives above his/her means.
loading....
I agree with comment # 101 – Kristina.
Why are so many people thinking that rich don’t work?! They may not have a boring 8 to 5 job like most of us, but THEY DO WORK ! In fact, I am sure a lot of them work 50-60 hours a week.
This reminds of me of an article I read on Clever Dude blog about appreciating what we have is hard. Majority of the people living in the US are VERY VERY lucky ( no matter poor or rich). People make mistake by just looking at one side ( the better) and comparing themselves with their richer peers. Please look at the other side – the worse side, look at the poor people. Next time you need a reminder how rich are you, look at the under-developed countries and how much average people make there!
I also agree with other readers that without good family, friends and health – the money is no good !
Good discussion and yes, once again JD you did it – 100 + comments !!
loading....
I’ll tell you whether I’m rich or not if you tell me in comparison to *whom* and *what*?
For example, I’m probably richer than J.D.Roth in terms of having cooler gadgets, cooler car and way too nightlife.
But of course, J.D. would beat the shit out of me if we start talking about how I live life month to month and J.D has a cool $10,000 stashed away in evey room of his house!
loading....
I stand by my comment @36. Your “rich/poor”-ness is all about the impact your finances have on your daily life. But I apparently wasn’t clear that it’s not the money that is the important part, it’s the “your life” part: When I’m home in bed with my wife at night, I’m rich (money makes no difference) — except when I left my finances distract me from what is really important at that time, then I’m very poor; when I really want that one item but can’t afford it, I’m poor — except when I rise above and control my “wants” instead of my “needs,” then I’m quite rich. Again, the important part is not the money, it’s me. _I_’m the one who dis/allows my monetary situation to impact me at any given time. Unless I’m one of the (fewer now than in times past) people who is near unto death due to exposure or mal-nourishment, then I have the capacity to be rich just by changing me. Easier said than done, I’ll grant you that.
loading....
I’m sure this has already been said, but I guess your conversations go to show that being rich and being truly happy aren’t the same thing! I view being rich as being secure with my finances, with no worries. Am I there yet? NO! I hope to be. But, I am happy because I have all the important things in life: family, love, peace, and enough money for food and shelter.
We love your baked potato soup recipe! Thanks for the blog.
loading....
Rich is when I don’t **have** to compare prices on basic food items.
It’s a definition I came up with after my divorce, when I was paying back debt equivalent to two years of income and raising a child who turned out to have all kinds of extra needs that I had never heard of before the diagnosis.
A roof over my head, enough to read (this was pre-Internet. I have enough to read now), the OPTION of going wild with my food purchases – riches.
loading....
For me I need to stop comparing my balance sheet to others. There will be those with more and those with less.
For me having and fufilling a purpose in life is being rich.
loading....
I find it funny how many posters said they felt poor because they did not yet own their home. When my husband and I first graduated from college and got jobs I felt rich. We had few expenses, no debt, and free time. The amount we saved in one year would have supported our lifestyle for three. I could splurge occasionally.
Three years ago we bought a lovely house. It cost less than the bank said we “could afford,” we put 20%down, and are making more than the minimum payments. Despite this, I feel broke and am growing to hate this golden cage. We spent over $50,000 on our house this year (mortgage, insurance, taxes, new hvac system, etc.). If my husband loses his job during a down economy we’re toast. We’d have about three months before we’d have to start selling our assets at a loss. Also,I feel like the bulk of my free time is now spent mowing, painting, weeding, and scrubbing. Trust me, a house is not going to make you feel rich.
loading....
Rich, in my opinion, is having the freedom to do whatever you want with your time without having to sacrifice any luxury whatsoever that you desire (necessities are satisfied by implication).
Of course by this logic, the homeless person who doesn’t desire a thing with all the freedom of time is rich (granted he has his necessities satisfied). But then who is to say he isn’t?
loading....
To put it bluntly, if I feel empty spiritually and can buy a Ferrari tomorrow, without the blinking of an eye, in an attempt to feel that void, then I would be rich by any sane definition of the word.
Of course there are relative levels of wealth. For a Namibian labourer pretty much any person from a developed country is rich, but that misses the point.
To be rich is not to have plenty of time, or to do what you want. An unemployed person with a good severance package has plenty of time and can do pretty much what he wants, but most likely is not rich.
We all understand intuitively who is rich and who isn’t, but the interesting thing is how several people on this discussion try to move the frame of reference to things that have nothing to do with finances , it is like if we try to convince ourselves we are rich when in reality we aren’t.
So let me try to have a 2nd stab at a definition of who is rich. Rich is somebody that has an almost certainty to have enough assets to cater for all his needs for the rest of his life, plus a disposable income comparable.
Allow me to explain. Lets talk about a family of 4 people. I would very arbitrarily say that such a family would need $50000 a year to live and that such a family will remain together for 20 years. In order for them to be OK they will need a house, of lets say $250000 and enough insurance to cover their health in even the worst case scenario (somebody mentioned $1000000 for a bad heart attack, so lets multiply that by 4).
Add all that up and you have $5250000. Now double that to account for a rich family’s disposable income and we get a tidy sum of $10500000.
Arbitrary? Absolutely, but I propose that you can actually calculate a number for your own situation which would make you unambiguously rich. Less children? Bigger or smaller house? You think you need more money for a health crisis? Suit the numbers, you will find a total for you.
After all finances is about numbers, so if one wants to know what would it take to become rich, throwing around some numbers will yield an answer that could become a personal yardstick.
loading....
@Lara (#110)
I used to be a huge proponent of homeownership. I thought it was the key to riches. I still think it’s a good idea for many people, but I’m less zealous about it than I used to be. It’s not the key to riches.
Kris and I love our house. It’s a beautiful building on a beautiful lot. But damn, is it expensive. There aren’t just mortgage and interest payments, but there are also insurance payments, utilities, and — most of all — upkeep and maintenance.
Because the building is over 100 years old, there are all sorts of things that need to be done. We can’t afford to do them all at once, so we have to prioritize. This year we did the electrical system. Next year, we’re going to paint the exterior (or, more likely, have it painted). After that, who knows? There are many things to do be done, and we’re not sure how to prioritize them. (We tend to tackle the thing that has us most worried about structure or safety. If we don’t get it painted next year, I’m afraid we could have some damage to the wood.)
So, yes, your phrase “golden cage” does seem apt.
loading....
Wealth is attainable, anyone who works hard and spends wisely can be wealthy, and sometimes exceptionally wealthy. But I think being rich requires having a sense of security or a lack of consideration regarding money that very few people can attain, they are born with it.
My grandmother and her sisters were born to a millionaire real estate investor who never taught his three daughters how to manage money because they’d have husbands to take care of that for them. These ladies were rich, they never even THOUGHT about money their entire lives. Well… two of their marriages ended in divorce and one was a young (too young) widow. My great grandfather’s fortune in Seattle real estate? Sold through the years, there is one shabby strip mall that’s managed between the three estates, otherwise it’s gone and all the proceeds are too.
Which is fine, but also demonstrative of what I’m trying to say.
What I’m trying to say is that rich is hard to either attain or sustain, and I’m not placing a moral judgement on that it just is. Wealth however can be attained and sustained.
loading....
That made me feel very rich. I didn’t have the heart to tell her I owned two.
Does your family own a car? Do you have more than one pair of shoes? My freshman social studies teacher asked us these questions in the first day of high school (some 20 years ago), and everybody answered affirmatively. “Guess what”, he said, “That makes you very rich”. For me this was all abstract, and people outside of America were faceless and meaningless, until I actually started traveling abroad and becoming friends with people and learning how they lived.
What does it mean to be Poor? Having visited urban slums in India and three or four other continents, rural villages in sub-Saharan Africa and Southeast Asia, gangland suburbs in Latin America, I’m convinced that Poverty does not exist in America, and hasn’t since at least WW2. Driving a twenty-year old wreck does not make you poor; it makes you rich (only 13% of human beings own any type of car). If you think you are poor, show me your house made of mud and sticks, no running water, no electricity, and living in constant threat of dying of malaria (a reality for 1 Billion plus sub-Saharan Africans).
I probably earn less, and have less than many people on this thread, but I do feel very, very rich. In my opinion everybody in America is extremely rich; even people who earn minimum wage live a vastly more comfortable lifestyle than the overwhelming vast majority of our neighbors on the planet, or for that matter, people of generations prior.
Ironically, Americans are also some of the poorest people on the planet – on paper at least, because of debt (mainly mortgages). You don’t see too many rural Cambodians who take on $200,000 in debt just to put a roof over their heads.
loading....
Having 2 pairs of shoes does not make you rich. Not even in a poor country.
Being a poor Cambodian labourer without access to credit clearly makes you poor.
But having a car, although would make you richer than the Cambodian labourer, does not make your rich per se.
Ask yourself this: would your lifestyle change for the worse if you crash that car?
And need extensive emergency treatment?
And are left disabled?
I am not talking about the obvious above, but about your financial situation only.
If the answer at any point is yes then you are not rich.
We all know this but keep beating around the bushes for scenarios that make us feel better.
Having enough does not make you rich, only a fiction writer could suspend reality to contrast literary and personal achievements with economic wealth.
Having enough may make you content and self sufficient perhaps, but not rich.
I sometimes wonder if there is a vested interest in rich countries to make people believe they are rich when this is verifiable false. In developed countries we are certainly wealthier , but in all seriousness only a privileged few can claim they are rich in a sense that leaves no need for questions or peripheral non financial explanations.
loading....
@ 81, Libraripagan, I think that all that Boomie (@16) was trying to say is that the rich can do a lot of good. . . and I think that the statistic you quoted does not not contradict that.
Even though the poor may give a higher percentage of their income to charitable efforts, their donations don’t have the effect that is achieved by a donation of a smaller percentage of the income or assets of the rich. A donation of 3.1% from a rich person is going to be larger that the collected 4.6% donations of many, many poor people.
A 3% donation by a rich person can make the difference in whether a charity succeeds or fails. That 3% can provide stability to a charitable organization that enables it to keep operating when the level of other donations fluctuates. And 3% of a megarich person’s income or assets can create new charitable efforts.
The effect of a rich person’s giving can range from the huge efforts of a Gates Foundation down to the much more modest efforts of a small-town rich person. Here’s a really modest example — in my town, there’s a food pantry that this former drug addict runs, and she helps the very “lowest” people in our town. She doesn’t take money from the United Way, and she has no endowment. I’m one of her “rich people.” I promised to send her a check for a couple hundred dollars every month, and that check pays her power bill and phone bill and a little more. Other people bring by canned food and an odd check or two, but I have been a key part of her baseline support for 7 years now. She almost surely would have closed shop without that reliable, steady support.
The super-rich can do for big charitable causes, what I can do for the food pantry, only on a much bigger scale. Poor people can’t help at that scale.
BUT, I think you would say that the rich ought to give more than 3%, and I would agree.
loading....
Rich is a relative term, it has no absolutes, and what is rich to one man may not be to another. That said, all of us here are rich compared to much of the world since we obviously have access to computers, education and knowledge. If we are talking financially rich, then it only makes sense to compare ourselves to our peers. Large parts of the world live on less than $2 a day, you can’t eat in America for less than $2 a day.
I know on the financial score card I am ahead of alot of my peers, but way behind others. I have friends with 6-figure retirement accounts, I’m hoping mine makes it out of the year with 5. I don’t know what rich is for me, in money or income. I often walk by this restaurant on my way to the office and look in on the people enjoying their breakfast. I wish I were sitting there, lingering over coffee and the paper with no where I had to be. I guess rich for me is being able to eat out for breakfast whatever day of the week you want, whenever you want. Pretty simple.
loading....
Great question.
What does it really mean to be rich?
Having enough net worth and invested assets to maintain one’s regular lifestyle without having to worry about a regular job & income. The interest income should take care of regular lifestyle.
Being in a position to take a complete pause mid-career to evaluate where one is heading in life and then being able to take appropriate action to nudge oneself towards the chosen path without the need to worry about bills to pay.
loading....
Having found real juice in this post and more than a hundred useful comments, this alone can make one feel that he is rich.
Anyway, I agree when one says that being “rich” is only a state of mind as I think one may go crazy if his riches will get stuck in his mind.
If someone who has extra money is very kind to help the needy, then I would rather call him A Good Samaritan than being “rich sharing his riches”.
loading....
I’ve heard people say that the rich/wealthy man is not who he who as the most but rather he who needs the least. I’m not sure if you agree but its a pretty interesting point.
loading....
@Lara (#110),
I feel the same as you do too… In fact, I just posted something similar on my site. You can find the article at http://moneychurner.blogspot.com/2008/10/how-much-is-enough.html
loading....
This is an interesting post, and I have only one random thought to add- how funny is it that you’ve written all of this questioning the meaning of a main word in the title of your blog?
loading....
I don’t know that I can add much to this discussion that hasn’t already been said by the 123 posts before mine, but I just needed to chime in and say that I struggle with this exact same condition as well. I am debt-free other than my mortgage, have lots of savings, 401k, Roth IRA, etc. Am even making extra payments on the mortgage. And yet, I feel broke all the time. I sometimes wonder if I’ll ever “get there” or if I’m just going to spend my whole life like a hamster in a wheel. I think part of it may be that I spent my late 20s and early 30s deep in debt, and went through a financially devastating divorce in my early 30s that keeps me in this “broke” mindset.
loading....
Time
Being rich means having time. Holding it in the palm of your hand every morning and doing whatever you want with it without any constraints.
Wealth is what you hold in your other hand, tangible or intagible, which helps you in spending that time however you want.
loading....
Wonderful discussion. I asked my wife this question over dinner last night. She is very concerned about the amount of chemical additives in food and other products we use. Her answer was that some people cannot afford organic vegetables and other healthier choices because they are too expensive, and that she would define rich as having the wherewithal to always be able to make healthy choices for your family’s goods, without regard to the cost.
loading....
I’m not rich in terms of wealth. I have a good job and I’m solidly on my way to becoming a good, debt-free member of the middle class.
I don’t know what rich is. Politicians seem to think everyone with a job is rich (yet claim only the rich will get taxed) and socially we tend to almost say rich is a bad thing.
I like the old Porter Wagoner song, “A Satisfied Mind” which is something that is my financial plan. I don’t want to have a fleet of vehicles or a score of rental properties or three houses. I just want the ability to be able to take a day or two off to do whatever I want and not worry. I’d love to be able to just say “Yeah, I’m not going to work this morning. I’m going to stay home and watch anime.” but I can’t. To me, being rich would be the ability to do that.
Oh well, I won’t be rich but I think someday I’ll be content.
loading....
@117 shalom
I made a post about this in my own journal & ran the numbers. Assuming that you have most people at the bottom of the scale and working upward, here’s what the numbers look like:
10,000 individuals making $20,000 per year and donating 4.6% of it would add up to $9,200,000.
1,000 individuals making $50,000 per year & donating 2.5%: $1,250,000.
100 individuals making $100,000 per year & donating 3.1%: $310,000
10 individuals making $250,000 per year & donating 3.1%: $77,500
1 individual making $1,000,000 per year & donating 3.1%: $31,000
Obviously, my breakdown is not accurate. It’s an overly simplified scale. And, I wish they’d broken the percentages down further as you moved up in income. But even if you made it 100 individuals making 20K, they’ll still contribute more than 10 individuals making $250,000 per year.
While I agree that the rich *can* do a lot with their money, I’m tired of the assumption that the rich are the ones who do the most when it comes to charity. I’m also tired of the assumption that if you reduce taxes and cut services, the rich would donate to make up for that. And I’m tired of the “poor” being slammed as useless or lazy just because they’re poor.
loading....
Libraripagan, you’re right. I agree — completely — with your numbers, with your statements about the poor. I clearly touched a soft spot, and unintentionally. I was NOT trying to slam the poor, and I don’t believe that I did.
Affirming the good that the rich can do, does not negate the good that the poor can do. (And this labeling of “the poor” and “the rich,” like they’re some monolithic, homogeneous types of people, is misleading, but I guess that’s for another discussion.)
My point was about the good that the rich could (and ought to) do. I actually was thinking mostly about the megarich, since those are whom Boomie appeared to be referring to in the original comment.
The $20,000-income person’s donation is very valuable, but the fact is, it can be hard for small gifts to drive policy, to find solutions to big problems, or to be made consistently.
Looking at the the $50,000 people or even the $1,000,000 people doesn’t show the “rich effect” that I was talking about, except maybe on a small, local scale. To stick with your method of comparison, 3.1% of Oprah’s income (as reported by Forbes) would be $8,525,000. It would take 9,266 people earning $20,000 to give the same amount. My point was that a rich person can give money away in larger increments, which can bring charitable efforts into existence and keep them going.
EVERYONE, rich or poor, ought to help his fellow man; and the fact that the rich can have a larger individual effect is not a slam on those who are poorer.
loading....
Sheesh! Sorry — I meant “sore spot,” not “soft spot.” Freudian slip?
loading....
To me, being financially rich is having enough money saved and invested to be able to live off the income for the rest of my life, in a style that suits me, without needing to work (I might still choose to work, but there would be no financial compulsion to do so). And to be able to reinvest a large chunk for capital growth too.
Although I’m not at that point yet, I do feel rich in many other ways already, when I consider what a great life (in both material and non-material terms) I already have!
loading....
To me, and I am still young, being rich is having enough money to not worry about stuff going on in the world (i.e. the current economic crisis). Sad thing is, we look at the term rich in a monetary term.. which as your wife feels, is a negative thing.
I believe somewhere along the line, the meaning of the word needs to change. I don’t care how much money one has.. The richest person I know is the person who is happiest.
loading....
Chris Rock talked about the difference between Rich and Wealthy at one point in a comedy sketch.
He says, “Shaq is rich. The guy who signs his checks is wealthy.”
Personally, I think rich is $125,000 income for one person. Just because if you make that much you can afford to live and then purchase anything realistic you would really want as well.
Wealth is when your assets are making the money for you. When they pay all your expenses and continue to grow, then you are wealthy because you no longer have to provide for yourself. That is wealth.
loading....
It goes both ways. I was raised in upper middle class/affluent circumstances and now, even though I am “poor” by my birth family’s standards, I don’t feel poor. I think sometimes it is easy for me to live above my means, not because I particularly care about status symbols but because there are certain things I take having for granted. I tend to take it for granted that we can go out and replace an appliance, a car, something big, without worry. That we can spend on expensive cheese and coffee and that’s just something we “should” have. But this isn’t true. It requires planning, sacrifice, giving other things up, savings and budgeting. I’ve had to learn this. To learn to live within my true and not perceived means has been a really interesting journey.
loading....
Our household annual income is around $300K. My husband and I both have good (great) high-paying jobs. We are in our mid-30s. The last time I checked, our household net income was over 2 million dollars. We have no debt except our mortgage. Our house is very modest, nothing special compared to houses of my friends. I still drive my 10 year old van. My husband still drives his 7 year old jeep cherookee.
But do we feel rich? NO. I was born and raised in the 3rd world country… My husband was a farm boy – lower middle class. I lived with the poor of the poorest in my childhood.
I will always feel poor and can relate to the poor no matter how much I make. I can only hope I impart most of my values to my 3 children. I hope they don’t feel entitled to have things.
We went to eat at Denny’s and look around… my husband said, don’t you know that we are rich? We are at the top 5% earners in America. I said, “oh yeah?!, I know I file our taxes and our AMT is ridiculous!” And he said, why are we eating at Denny’s? Simple: we love the price of the food there!
loading....
Being rich is freedom. Freedom from want, freedom from fear of want, freedom to spend your time as you want, and having the werewithal to do so.
So I’d have to say that being rich is actually variable. Someone who wants to travel the world and buy half of what Tiffany’s offers, and fill a wardrobe every year with couture clothing, would need a different income level than I would; I’d need good medical coverage, and if I had a guaranteed income that paid my bills, let me make necessary repairs to the house and let me stay home, that would be rich.
loading....
“No retirement accounts because again that is money tied up that could be used elsewhere like a business or a property.”
I don’t believe this.
Rich people understand retirement accounts are immune from civil judgments, and their advisors know about other investments that are also immune from creditors.
Well before Enron blew up Ken Lay & his wife put millions into deferred annuities, also immune from creditors under state law.
No matter the civil judgments against her or his estate, his widow is currently enjoying a very nice income from those annuities:
http://www.motherjones.com/news/feature/2002/02/enron_insure.html
loading....
Look at that JD, you are an industry leader. US News has a great article on the topic of are you rich:
http://biz.yahoo.com/usnews/081014/14_how_to_tell_if_youre_rich.html?.&.pf=banking-budgeting
loading....
I believe one reason you’re doing better than your folks is because you have no children. I’m not stating that as a bad thing, just want to include that in your formula…
loading....
Well, it’s easy recourse to the J. Brotherton quote: “My riches consist not in the extent of my possessions, but in the fewness of my wants.”
On the face of it, this seems paradoxical and even nonsensical to people who really haven’t thought through the issues surrounding money, frugality, quality of life, and wealth. But the more I think about these issues, the more I see the wisdom in what Brotherton was saying.
Like you, my husband and I have no consumer debt, we enjoy a very solid income, have no kids, pay extra on our mortgage, and practice what a lot of people would consider extreme frugality. I don’t feel poor, but neither do I feel rich. I wonder whether this will change when our mortgage is paid off. Part of me hopes that I’ll feel a little freer with our money, and part of me hopes that my frugal mindset will continue unabated. A lot of the frugal things I do (hanging laundry to dry, cooking from scratch, gardening, canning) I think I will always do because they either feel morally right, or because they palpably contribute to a high quality of life that money cannot replicate.
loading....
To me, being rich means having enough money to live the lifestyle you want.
Being wealthy means having enough money to live the lifestyle you want and the freedom to do whatever you want. (Not having to work to maintain the cash to support that lifestyle.)
loading....
For me, being rich is being able to quit working and still maintain a lifestyle you feel comfortable with. I guess on a worldwide scale the standards are much lower since so much of the world lives in poverty. I’d say that the vast majority of people in the US are rich if we’re talking about a worldwide scale.
loading....
I like what Warren Buffett has to say about wealth. A dollar is simply a “claim check (cheque)” against society and is redeemable for one unit of consumption. You earn claim checks by providing value to others, and you can do whatever you wish with them. Warren will be giving the vast majority of his to charity upon his death.
Essentially, being rich means that you have a high number of claim checks, and that society owes you a whole lot of consumption should you decide to turn them in.
loading....
I think we have to differentiate between the subjective rich and the objective rich.
Anybody can feel rich anytime they want to. Like you, I have a nice house, good job, great family, etc. Am I rich? To me, I am happy and content. But I am NOT rich, yet. Not according to me.
Objectively, I’m definitely not rich, although again, even for the objectively measurable “rich” we can all come up with all kinds of definitions to include or exclude ourselves. Does 6-figure income make you rich? A lot of people think so. As you can see, I don’t:
http://blog.5m10y.com/2008/09/23/how-much-money-do-you-have-to-make-to-feel-rich/
The thing is, during this kind of discussion, the definition of rich shifts so many times, and usually in the end everybody agrees that “rich” is a state of mind, everybody has his/her own definition, and everybody’s happy.
Which is good and interesting to read, but useless for comparison since it’s so subjective.
loading....
Rich can mean having “stuff”. A big house, fancy cars, nice furniture, etc.
Do the rich have to budget?
I guess what it really comes down to is living a comfortable lifestyle. Having enough money for rent/mortgage, transportation (even if it’s the subway), clothing, quality food, and something leftover for savings/retirement.
I guess I meet this criteria. I share a 1 bedroom/1 bath apartment with my boyfriend. It’s small, but it’s comfortable, in a good location, new appliances, etc. I drive a new car and am able to successfully make payments. I may not have a designer handbag, but I have a closet full of clothes that I am lucky to have. We always have enough money for groceries and occasionally have a dinner out. I even have savings.
At the same time, like J.D., I don’t feel rich. I have a budget. I have various loans that are being paid off. I clip coupons and watch for sales. I’m creative with money. I think, though, if my salary doubled or tripled — I would still be watchful of my bank account. I’d be richer by income, but will always have a frugal mindset.
Have you ever dreamed about winning the lottery or ending up in Hollywood as an A-list star? In my mind, I’d still be very careful with money. Maybe splurge and get a few nice things, but live in a modest home and invest the earnings. Maybe start a charity/fund of some kind. Would I feel rich then? Possibly.
I do know, however, that I do NOT feel poor. I’m comfortable.
loading....
Money it’s not just about numbers so to me been rich means peace of mind and be able to do the important things that you love, just as simple like that
loading....
Being rich to means never having to work , never having to worry about your day to day expenses
loading....
Great Question… I’ve always thought of RICHNESS and WEALTH as two different things.
If you earn enough to have and buy whatever you want, but still need to work to keep up your lifestyle, I define that as being rich. If you stop working, your lifestyle will change.
On the other hand, if you can stop working today and still have enough money coming in (indefinitely) that can sustain you, I define that as wealth.
Beyond money, I think Richness and Wealth also entail having balance, quality of life, meaning and overall contentment and happiness.
Eff Jay
loading....
i think your rich if you can walk into a store and buy something exspensive not asking or caring about the price.you walk into a store y9ou see a nice car and even though you werent shopping for cars you buy it.because you can and only because you can.thats rich
loading....
everyone here is overlooking a simple concept, one that unfortunately i have to live with every day. And that is, if you are rich, you have the time and money to do the things you want, when you want to do them. conversely, if you are poor, you struggle to get by and have to sacrifice time with your family for shitty hours and shitty pay, that is if you are lucky enough to not get laid off for no reason. i am 21 years old, and an aspiring computer programmer. when i graduated high school, i had a false hope that there would be entry level positions in businesses near where i lived so i could work up and save enough money to go to a community college and get my associates degree and get a decent job afterward. i knew in high school that i was no great scholar, i knew that my only chance to make more money and to improve my life would be to slowly work my way through. the problem with my plan for the future was that never once was i warned about the job market. no one ever told me how hard it was to find a simple starting-wage job. it took me about 3 weeks after i graduated high school to find a job, at that point my parents were fed up with me being there, so as soon as my first paycheck arrived, i moved to an apartment in Kent, Ohio. i was making enough money at this job to get by and put some away, and life was looking good. but not for long. after working for FSI ( ravenna aluminum ) for 4 months, the company had a meeting during our lunch break. they said they were closing down and we had about 3 months left. during these months the plant manager at the FSI foundry was kind-hearted enough to let us work some overtime.
after the lay-off i spent the next year bouncing around from unemployment to temporary service work. until i went back to FSI under a new company name. then once again i was laid off. now i am currently laid off and using any available recourse i can get a hold on to go to Stark State college in canton Ohio. i have been poor my whole life, and i have to struggle with it every day.
this is why i KNOW what it means to be rich.
and someday, I WILL BE. however, until then i will continue to struggle. i hope this gives all you who read it some perspective on the subject.
loading....