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Finances & Money

Am I rich? Do you think you’re rich?

Photo by Refracted Moments

J. Money at Budgets are Sexy wonders what salary it would take before he thought he was rich. For him, $150,000 per year would make him feel like Mr. J Moneybags, but I have a different perspective.

When I was young (like 20 years ago), six figures sounded like a fortune. I think I knew one person who made that much (a friend’s dad), and he was the CEO of a bank (although he in no way flaunted his wealth so I’m only guessing). Even when I graduated college earlier this decade, I still thought it would take me forever to make six figures, but I had the wrong perpective.

Perception of Wealth is Relative

I was looking at a $100,000 from the perspective of 1) a “lower middle class” child and 2) a debt-poor college graduate. And both perspectives were from mid-size Pennsylvania towns.

When I graduated, I moved to the Washington D.C. area, but my perspective still stayed in central Pennsylvania at first. Then, as I began to see my earning potential in a metropolitan area, I no longer saw $100,000 as “rich”. I had many more people around me that I knew made very close to, or over, six figures a year, but here’s the kicker…

They weren’t living the lives of rich people, and least the rich people I saw on TV.  It didn’t make sense to me that these people were rich to my young eyes, but now I see they’re just like me. Why was that?

Cost of living! These coworkers and friends weren’t paying the $500-$1000 mortgages from my hometown. Instead, they were paying $2,000-$4,000 per month for the same size house. And while most in my hometown were content with owning one or two used cars per household, people in D.C. seemed to need 2-3 new cars per home. It was a richer lifestyle, but I still wouldn’t call it rich.

So a six figure salary no longer appeared like very much money to me in my new big city. It wasn’t the average salary for a single worker, but six figures in combined salary for a couple in our area is pretty common.

Combined Income is Screwing with My Perception

When I was young, I never thought I would be married to a working woman. Heck, when I was 10 I thought girls were evil and would eat my ears off. Puberty corrected those thoughts about girls, but I still never factored in a wife’s salary because I never seriously thought about it. I was too focused on getting a job to think of someone else’s career.

But now that I’m married and have been in the workforce for nearly a decade, I’ve become a pretty decent wage earner, and I also have Stacie’s income to add to the total. With that said, I will state that we are in the six figure range with our combined income. But knowing what our money does for us, I wouldn’t consider ourselves rich. We can pay our mortgage easily, and we have 2 cars (2-3 years old), but we’re not living anywhere near the lifestyle I thought rich people would live. Heck, we don’t even have a flat-screen TV! Boooo!

For J. Money, $150k-$200k is rich. I guess if I alone made $200k per year, I’d consider myself rich, or close to it, because it seems such a considerable distance from where I am in my career. I figure that wealth is when you’re earning what you couldn’t even imagine right now. I can’t picture myself earning $200,000 per year all by myself, but perhaps I’ve opened a path to riches with my side income (this site and a few others). Maybe I’ll make it to $200,000 per year in less time than I would have thought, but I think I need to own my own consulting business to get there.

So what’s your definition of “rich”? We know John McCain thinks you need to make more than $3,000,000 to be considered rich, but is that a bit high? Let me know what you think.

Photo by Refracted Moments

About the author

Clever Dude


  • Suzie -just because we said we don’t consider ourselves rich, doesn’t mean we don’t save over half of our salaries or live the life of luxury. Nor does it mean that we need to feel defensive. It just means that we have other criteria or fears – dependency on continued employment, ability to handle real emergency – where emergency is on the scale of “got really ill and need expensive treatment” not “oh, I need to fix my car”. Sure, occasionally I think how great it’d be to be able to afford all of these fancy things I see when I visit Manhattan, but this is really not the most important thing.

    I drive a Honda Civic (OK, it was bought new, but I paid cash for it), I live in a townhouse style condo. I take my own lunch to work and rarely eat out. Yes, I have some jewelry, but nothing particularly expensive. I do allow myself to spend money here and there – vacation, theater tickets, etc., but always well within what I can easily afford.

    But I know how much a serious health problem may cost. My mother has just been diagnosed with lung cancer (no, she has never smoked and neither has anybody in her or my family). The drug she is taking cost $4000 a month. She is OK because it is covered by medicare plan D, but what if someone encountered this type of an expense and it hadn’t been covered? I do not clear enough after taxes to cover this type of an expense and still pay my bills – after taxes, 401K contribution and other deductions (e.g. health) I am left with about $4500 net. A friend of mine had hundreds of thousands in medical bill after her husband was diagnosed with sarcoma and insurance company refused to pay for a particular type of chemo after the fact. Yes, after a lot of calls and appeals, they did pay for it, but where would she be if they hadn’t?

    Of course, it is all relative. I am rich compared to someone living on smaller income while having a family of 4 – I can cash flow the expense many people need to spend months saving for. I am rich compared to my relatives in Russia, and I do bring them cash and behave as a “rich American” when I visit. I am rich compared to myself growing up as a child in the Soviet Union to the first years in the US, etc.. But to me being really rich is about being secure in being able to cover a real emergency.

  • I like Cindy B.’s defininition (above) or rich..
    “Rich is when you do not have to work to earn a living.
    You would work only if you choose to work.
    You have enough to live on your investments.”

    If that’s it, then I’m there – but no one else would probably think so.
    I make about $20,000/yr… but am debt free including my house. I chose to work to keep the health insurance paid, but with my retirement savings, I could quit work at any time I wanted and live on my investments,etc…. I take home about $1000/month now and am very comfortable… but I doubt others would think that as rich, while I most certainly do 🙂 My basic expenses are about $375/month. When I do retire, I will have more than $1000/month coming in in investment income, so then I will REALLY feel rich 🙂

    Yes for me, knowing I can quit work any time and continue my present lifestyle makes me feel rich. Rich enough, in any case!

  • Rich is always “more than I make”.

    My wife and I do pretty well. In our early 30s, we’re making ~$400K combined. Yet while most people would call us “rich”, I’d consider us middle-class.

  • Are accredited investors rich? Maybe that’s a better yardstick to use. If they’re not, shouldn’t they be clamped down upon just like the people who don’t qualify to be accredited investors? Just thinking out loud.

  • Jon, this seems like a good yardstick. The only problem I see with it – I just looked up the definition is this line from the definition: “a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;”

    I wonder if net worth is inclusive of primary residence or not. I’d say if it is not, than yes, it’s a good definition. By if it does, I am not sure… Here in Westchester, an average house is over 600K. Same houses people bought in the 90s for 200K. So somebody with a house and only 400K in non-retirement and retirement (not yet taxed) investments will have a net worth of $1 million. But I don’t think this person is rich. Of course, this is just a matter of definition…

  • Another interesting question is: “What does it mean to be middle class?” My husband and I make a combined six figures, but we live in NYC. I don’t think we’re particularly extravagant spenders. We’re able to put a significant amount into our 401ks and max out our IRAs. We were able to take a nice trip to Europe this year. (Won’t do that again next year.) But if we had kids … that would be it. I think we could still max out our IRAs but we wouldn’t be able to save for anything else significant, and we wouldn’t be able to put much money away for our kids’ college education. We wouldn’t be able to pay much more in rent — and we currently have a VERY good deal. Yet, we’re in probably the 90th percentile of American households.

  • For me not even 800K a year is wealthy

    Its more like a number of at least 5million a year Plus 20million in assets 50Million in the bank and own everything I have and not owe a Penney to any creditors or person ,,,for my assets

  • I was raised with the wealthiest and at that time wealthy people were quite tight with their money and talking about it or being obvious you had it was of the lowest tatse. Money meant you had the opportunity to travel and to learn about the arts. Money meant you could volunteer with different charities. Money I guess meant your mom was your room mother at school. Anyway, my husband was raised the same. We started off thnking that we would be just like our parents. We had the jobs we had the social structure but we didnt have their character. There wasnt enough money ever. Eventually we lost everything but because we were educated and pushed our five children each workd and through academic scholarship have received education at the best of California colleges (UCLA CALPOLY) Anyway, after blowing it trying to have the life we thought we were entitled to we now have very little and have the life we were taught to have. Wealth is lifestyle of simplicity and freedom.

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