Here’s a loaded question for you: Are you rich?
One of the numbers that is repeatedly thrown about to represent “being rich” is an annual salary of $250,000 a year. Others, though, don’t consider you “rich” unless you make $1 million. I know some families who would consider themselves “rich” if they could hit the $100,000 mark for an annual salary.
Obviously, the definition of “rich” is something that is completely subjective. One person’s “rich” is another person’s “poor”. Indeed, most of us probably just prefer to think of ourselves as “middle class”, even though many of us think it would be nice to be “rich” some day.
So let’s try to define it despite all the baggage. We could run into problems though, since “richness” can’t really be defined by something as simple as a dollar amount. Here’s a few more pointers to consider:
Location, Location, Location
One of the biggest issues affecting how “rich” you are is where you live. I live in an area where my earnings as a freelance writer have garnered us a comfortable (yet modest) home, and the ability to meet all of our expenses with ease. We are saving for retirement, and saving for short term goals. And we still have money left over to enjoy eating out sometimes, watch movies on occasion and even travel to see family. My husband can buy video games when he wants, and I can get the new book I’ve been waiting for when it comes out. However, if we lived somewhere else, our income wouldn’t go nearly as far.
As long as we are living where we do, we might be considered “rich” — even though we don’t make anywhere near $250,000 a year. But if we moved to someplace along the coast, we’d quickly find ourselves feeling “poor”. Indeed, even those “rich” folks making more than $250,000 a year might feel themselves “poor” when living in a high priced area where a big chunk of their income is taken up by expensive housing, and where discretionary income dwindles, even with a large salary.
As Vered once said, your address can make a big difference.
Do You Need More Money to Feel “Rich”?
Another consideration is that “rich” does not always equate to money. If you are content with your current income, making extra money is not as important. Many people feel “rich” even when they make less than $100,000 a year because of other factors:
- Good health
- Surrounded by family
- Enjoy time with friends
- Content with frugal entertainment choices
- No need to clutter the house with stuff
- Feel accomplishment when saving up for goals (such as travel)
For many, being debt free and able to save for the future, while enjoying the simple pleasures of life, constitutes “wealth.” And, truth to tell, a lot of my contentment comes from being able to take my son to the little zoo we have in town ($1 for each of us), or heading up to the lake, an hour away, for a little camping trip. No need to spend big bucks, and I feel richly blessed just floating in a $3 tube on the lake after waking up to a chorus of birds.
In the end, whether or not you are “rich” depends little on an arbitrary dollar amount. It really depends on your own situation, your money motivations and how you feel about your personal finances.
So, with that in mind, are you rich? What makes you rich (or poor)?
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I have everything I need, and most of what I want — with some careful planning — and I don’t think I need anything more to make me content. I don’t worry about whether or not I am “rich” — although my sister the Occupier thinks I must be rich because I don’t have a husband or children, own any property, or owe any serious money.
The story asked “Are You Rich”. I’m not going to lie. I suppose I am wealthy. Wife and I make almost $1 million a year in wages. Our self directed brokerage account that I manage myself, typically makes another $250k or more a year in dividends, interest and cap gains. We live on a tiny fraction of that amount. We have no debt, no illnesses, no unmet needs, few unmet wants. We give a large amount to charity each year. We both grew up poor and personally I spent my first 18 years on welfare. Are we happy? Yes. Are we Really happy? Yes. Without any money we would still be very happy. But this article asked about being “rich”. It’s a blessing being wealthy. It’s better to be happy. For me, it’s a no brainer—I’d rather be both.
When my daughter was 11 years old (several decades ago!!!) her best friend commented to her that it was a shame that SHE was rich and that it was a shame that my daughter wasn’t. My daughter returned right back that it was a shame that her friend didn’t know that being rich didn’t have a lot to do with money!!!. I think I’m quite rich, although I live on much less than most people would consider and am retired at 58 years old. I live in a very nice mobile home, on my own property, drive a 21 year old car and have plenty of food , friends and fun. Don’t know if I missed anything, but also have some modest savings and everything is paid for. I’d call that rich from my perspective, maybe not someone elses’ !!!
Karen,
I’d call you “rich”! Good for you!
Unless I win the lotto, I don’t think I’ll ever be monetarily “rich”, however, I’d be super-duper over the top happy once I’m finally rid of my credit card debt. 🙂 I do have plans for them, its just difficult paying monthly living expenses and trying to widdle them down. Baby steps! 🙂 What’s important for me, is I actually like my job, I am finally closing on my first home (a condo that is modest and fits my budget), and I am able to pay my monthly bills, even if it will take time for the debt to be gone. I am able to feed myself and my two cats, and I like finding ways to have fun without spending too much. For now, that is enough!
Wow! My health is not good, but my family & I are rich according to everything else on the author’s list. We are middle-middle-class Americans. My wife & I together make about US$ 50K, but live in a rural, small town area where the cost of living is very low. IT’s been very satisfying to see our young adult children make wise financial choices, much better than I made at their age. Our biggest long-term concerns are our health & saving for retirement & our soaring national debt. But I give thanks to God and feel blessed & fortunate. Yes, we are rich.
16 years back I thought I was poor. Everyone had more than me or compared to what was at my home. One sweet/toffee a week, no films, 2 year old v. cheap clothes, never seen/heard/tasted ice cream, pizza, pies, etc… a home “blade 1” haircut after every 4 months and 2p spending money per week even though my parental household income was £35k PA and we owned our 3 houses including our home. The world laughed at me and my siblings, and taunted/bullied us daily. I learnt to defend myself and mine. I became a fighter.
13 years back, I still thought I was poor, earning £9600 PA as a teenager selling stationary, stereo tapes, CDs, clothes, phones, shoes, bags, and so on at school. Even working illegally at a factory, part-time.
11 years back I thought I was average, and day and night had not a second of mental/physical rest running after money and money related matters. My fiance (who gave me everything she had willingly) was earning in the 9 figure sums (GBP) and I was earning 7 figure sums. Everything her father had or earned was hers, too. I made a lot but spent a lot of it too. I didn’t blow it on prospects I thought wouldn’t have at least equal gain though. If I blew it, it was on her and I’d do it again and again, every time if I had such a chance too. She was the same.
4 years later, all of a sudden, she died. The same year, I gave everything I had and she had away in aid. People cried and lamented that I had committed [financial] suicide. For a year, I just lived on £15k savings less my travel costs. I made a mission of myself to travel the world, see cultures, languages, the Earth and live like others within their belief systems, just like them. To learn their beliefs and so forth, at very little costs, enduring much hardship, pain and suffering. It is then that my eyes opened from the deep ugly sleep.
6 years back, I thought I was rich, but was struggling heavily to make ends meet. I eat twice a day, lived frugal, had 3 sets of £6 clothing, earned a 6 figure sum from my main job but I was using 97-8% of my total income in voluntary charity and aid around the world, personally being there myself and coordinating each task. Owning 11 businesses in 3 nations, ample land in the same 3 nations and approx. 43 properties there too. I drove a £2k car, lived in a £35k 2-bed property and had the cheapest of equipment. The one luxury I owned was a self-built £150 computer. No house, medical or life insurance policy either.
4 years back, I worked part-time earning £10k PA, lived in a relatives shared property (rent free), had a shared £1.5k car but thought I was rich. I still visited charitable places in other nations for voluntary aid and assistance, but the financial/family/social limitations meant it was only once a year and limited in scope.
1 year back, I found myself unemployed with no one employing me even with so many quals, not even minimum wage work… claimed absolutely no benefits, had £21k in total savings, no property/car/land and minimal assets. Living in a shared property with my parents, rent-free. But now, I had come across and married an illiterate earthquake affectee who had no home/money/assets and was abandoned in mud, always having lived in extreme pain and hardship – to give her a better life and save her from daily abuse/rape/suffering there. Defrauded 3x when trying for business/work left me with £8k savings in no matter of time. Yes, all of it “stolen”. I still thought myself rich but crashing in on poor. For once, since my teens, the financial worries pre-occupied me. But we still lived in ease and comfort – I gave her much. It was also during this time that we lived on £1 a day for 2 months, and a £50 combined bill. I didn’t become weak, ill or such. I walked 8-15 miles a day in 40-50C heat, and walked 2 miles to fetch 25KG of semi-clean water at 4AM daily. No AC, mosquitoes and many creepy crawler bites was tough tho, no doubt.
In reality, I was always rich in assets, extravagances, luxuries, safety/securities and possessions. Where I was poor is in a realistic scope and outlook of the world before and around us; in compassion and in love. Earning and owning £000,000,000 made me feel no richer than at £0. What I did have that I lost tho was fame, name, opportunity, security, ease, luxury, extravagance, pleasures and assets. Seeing the world and living among plus 52 cultures made me realize that none in the Occidental nations is even 100 miles close to financially poor… but in a realistic perspective, soul, spirit, heart and love? Then yes, probably the most poor. In fact, they have not even sniffed faint poverty (bums are self-made wretches, not poor). That’s where the word “relative” chimes in. I strive on.
Sir, I take my hat off to you. You have probably done more for the underpriviledged in 5 minutes than I have done in my lifetime. A sobering thought for me. Time for me to get A into G! Bless you.
I am currently unemployed and I am rich. I might not have a lot of money, but I have a wife who loves me (don’t ask me why), and 3 kids (only 1 at home) who love me. What more could I want. Can’t take the money with you when you die, unless you write a cheque (check to you US of A’ers) and have it deposited in the casket… LOL
Richness is not how much you have.. but how less worries you have . If you can sleep peacefully, then you are rich. If you have more than sufficient and no sleep, then you are not rich.
I do feel rich at times and that despite a meager 25kEUR yearly salary (in Cork, Ireland), but I guess this is related to the fact that I have my first income now and am able to live very comfortably without having to worry about the future so much. I also for the first time feel able to spend semi-frivolously (nice food, etc) in the few times I feel like it.
Well, I currently make more $$ than I know what to do with – that makes me pretty rich, I think, despite the fact that I make ~$30k and live in Brooklyn, NY.
Perhaps I’m just really frugal. Or perhaps it’s the stark comparison to living on ~$15k in 2009 and most of 2010 out here.
Who knows?
🙂
Another way of putting it could be summed up like this:
“It’s not how much you make, it’s how much you keep.” Everything else is relative.
Some of the richest people I have ever known, were rich in love, friendships, family, knowledge, humility, kindness, curiosity and life-long learners, as well as sharing, patience for the young, enjoyment of their pets, personal talents that they nurtured and enjoyed all their lives from tap dancing to playing musical instruments to singing, thinking of others and doing good deeds, faith in and belief in a higher power, and their eyes sparkled like sunshine on water….those people were RICH….
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Of course this is all relative and dependent on many factors. Personally, rich means factors like having good health and family around. Financially, it is being able to meet all of my obligations with ease while still saving for the future (babies, 2 years savings etc) including retirement.
We recently moved from an area where housing and taxes were reasonable to the shore where housing is more expensive and taxes through the roof. But being boomers, this is where we want to be at this stage of our lives. Settling for a small house, still employed, we are doing what we want. That is my definition of rich: reaching a point in your life where you have choices.
I remember when I was in about fourth grade asking my parents if we were rich. My mom replied that as long as we have each other and a roof over our heads than, yes, we are rich. You bring up really great points about location though. Great, thought-provoking post.
Well, Dr Thomas “stop acting rich” Stanley discusses balance sheet rich vs income rich. Is the $300K/yr doctor with zero savings rich? Or the $100K couple who are both teachers, filling their pensions and have 10X their income as retirement savings?
Is rich a fixed number or comparison to others? The US is rich compared to the rest of the world. See http://www.globalrichlist.com/ The median USer is in the top 1% in the world. So to poster above, top 10% in US must be uber-rich.
I consider anyone who has savings socked away, and no debt (except maybe a mortgage) rich.
My wife and I have well over 6 figures as a savings, but we are living mortgage free in a large house also. We paid our first house off within 6 years of purchase and lived in it another 5 years socking money away until we had a savings of double of what our house was worth. Moved and bought a house double the size. After a CD was up, and we sold our old house within a year, we took that and paid our new house off. Still had a sizable chunk left in the savings. 3 years later, well over 6 figures in the bank once again and debt free still including no mortgage at the ripe age of 40 makes me feel rich. And to boot mine and my wife’s salaries are a little over 6 figures. You can get/be rich easily with 100g a year, if you start out young debt free.
My older brother has been a director and a VP making much more than my wife and I, and he is struggling with debt and has a mortgage on a smaller house.. This is how your VPs are living.
VP = Very Poor… obviously. Tongue firmly in cheek.
You know, I’ve already said that, but I will repeat this wise statement: A rich person is not one, who has more, but the one, who needs less. And I completely agree with that.
A man is rich proportionally to how easily he can satisfy his wants. The easier that is for him, the richer the man. Very easy.
When you said that there are many ways to feel rich, including being surrounded by family and friends and being content in general, I nodded enthusiastically. One can lead an incredibly rich, fulfilled life without being rich in the technical sense of the term – whatever that is.
I think we can define rich by percentiles of income. If you make more money than let’s say 90% of other Americans, then you are rich. If your expenses are higher based on where you live, it is up to you to save money on other expenses to compensate. (It shouldn’t be that hard with a 90th percentile income.) You are still rich in terms of income and ultimately nobody is forcing you to live there, although it may be hard to find certain types of jobs in cheaper cities.
The other benefit to earning a lower income in a city that has a lower cost of living is that your taxes are lower and you get to keep a higher percentage of your income.
I think being able to think about and plan for tomorrow is one of the keys to feeling rich and financially secure. Having a lot of money today but spending it all today seems like it would lead to a lot of stress and anxiety.
Rich is opening my eyes and able to see. To walk in the morning and thank God for this wonderful life. Gratitude, is what makes us rich. Not money.
Your description of “rich” sounds a lot like my descriptions of “happy”. Although I’m not going to lie. Hitting the $100K, $250K and $1M marks in my lifetime will be exciting moments for me.
I feel pretty rich right now because I make enough to do the things I want to do and save a big chunk of what I make. Granted, I live with family and although I help with the bills, I would spend a lot more if I lived alone. But all I really need is to be able to live how I want (which is mostly frugally, but sometimes I want to travel somewhere), no matter how much I make.
My fiance and myself make $125k per year. However we live in DC which negates what seems like a large income. I had at one point lived in Tulsa Oklahoma and at about $25k per year lived about the equivalent lifestyle I do in DC at about $55k per year.
Very good point. Cost of living and annual income ratio need to be taken into consideration.