At what point is a Person "Rich"

xxDOYLExx

xxDOYLExx

CAGiversary!
I have a nagging suspicion that many of us on the boards have different definitions of rich and poor.

Speaking only of household (gross) income. What do you guys consider rich or poor?
 
For me it would be $4M in the bank and the house paid off because then I could quit my job. Even at a modest 2% interest rate without the house payment I could manage on $80,000 a year (I think).
 
Depends on the comparison I guess, but I'd go pretty much with myke nationally.

Poor might be easier to define conceptually - you can't buy the shit you need.
 
I've kind of had a shift in the way I look at wealth over the past year or less. I'm not concerned as much with your annual gross income as much as I am with the amount of debt you have. Who would you rather be?
Person 1-Makes 100k/yr, but is in massive debt to credit cards, cars, home. Spends more than he makes.
Person 2-Makes just 30k, but is debt free. Only bills are monthly utilities, has a healthy and growing 401k, and is saving for his kids college as well.

I have a hard time saying Person 1 is the rich man.
 
[quote name='myl0r']I've kind of had a shift in the way I look at wealth over the past year or less. I'm not concerned as much with your annual gross income as much as I am with the amount of debt you have. Who would you rather be?
Person 1-Makes 100k/yr, but is in massive debt to credit cards, cars, home. Spends more than he makes.
Person 2-Makes just 30k, but is debt free. Only bills are monthly utilities, has a healthy and growing 401k, and is saving for his kids college as well.

I have a hard time saying Person 1 is the rich man.[/QUOTE]

I feel that for sure. bad financial decisions don't make you poor, they just make you stupid and poor. The only type of debt I have empathy for is med bills.
 
[quote name='mykevermin']Somewhere around $130,000/year, where you hit the top 10% of household incomes in the US.[/QUOTE]

The top 10% is a compelling way to look at it, but 130,000? That doesn't sound like enough IMO.
 
[quote name='myl0r']I've kind of had a shift in the way I look at wealth over the past year or less. I'm not concerned as much with your annual gross income as much as I am with the amount of debt you have. Who would you rather be?
Person 1-Makes 100k/yr, but is in massive debt to credit cards, cars, home. Spends more than he makes.
Person 2-Makes just 30k, but is debt free. Only bills are monthly utilities, has a healthy and growing 401k, and is saving for his kids college as well.

I have a hard time saying Person 1 is the rich man.[/QUOTE]

I think debt factors into it, but not necessarily in total amount of debt, but in its sustainability. If you buy a house you're probably going to be in debt worth at least 2 or 3 years of your total income, but I don't think you'd go from rich to not rich just because you got a mortgage.

I think it's about the money you have available to you at any given moment and the options you have because of it.
 
[quote name='SpazX']Depends on the comparison I guess, but I'd go pretty much with myke nationally.

Poor might be easier to define conceptually - you can't buy the shit you need.[/QUOTE]

Yep, being poor is much easier to define.

I'd also pretty much agree with Myke. Top 10% is a pretty good threshold for being rich/wealthy in trying to define the term on a national level.

As you note the comparison matters individually. $130K hits the top 10%, but the person may not be "rich" in terms of disposable income if they have a ton of student loan debt etc. relative to someone who makes the same and has no debts.

Location matters as well. $130K is a lot of money in say my parents rural location in WV. But I wouldn't say someone making $130K and living in Manhattan was rich as their disposable income is probably pretty low, their accommodations not great etc.

Family situation matters as well. $130K would be a lot for me as a young, single male. It's not so much if that's a household income brought in by two working adults who are raising 2+ kids etc. Better off than most, but not necessarily rich IMO.

And of course there's a difference between being rich/wealthy and being filthy rich and able to afford pretty much anything you desire etc.

Point of all that being, it is much harder to define that being poor which can be defined as not able to (or mightily struggling) to afford basic necessities.
 
[quote name='mykevermin']Somewhere around $130,000/year, where you hit the top 10% of household incomes in the US.[/QUOTE]

i think salary is a bad benchmark. assests are better, id say when yo have $500k in assests youre pretty damn well off, plus a decent salary.
 
[quote name='mykevermin']Somewhere around $130,000/year, where you hit the top 10% of household incomes in the US.[/QUOTE]

This is definitely NOT rich where I live.
 
I think everyone is poor under the greed and oppression of the monetary system, and we as a species will only live rich and fulfilling lives once we can focus on fixing problems and proving education instead of profiting on them.
 
[quote name='RAMSTORIA']i think salary is a bad benchmark. assests are better, id say when yo have $500k in assests youre pretty damn well off, plus a decent salary.[/QUOTE]


yeah I'd agree with that, I'm sure some of us have met people who make more than us but have less becuase they can't figure out how to manage money.
 
Putting some more thought into it, I think socially maybe it's better to have a distinction between "wealthy" and rich.

Wealthy can be defined as the top 10, 15% or whatever who are pretty well off, have a nice bit of disposable income to save or spend on leisure etc.

"Rich" can be those who are very wealthy and can afford pretty much anything they want. That way it's more the opposite of poor. Poor=struggle to afford basic necessities. Rich=can afford to buy pretty much anything they desire.
 
[quote name='xxDOYLExx']The top 10% is a compelling way to look at it, but 130,000? That doesn't sound like enough IMO.[/QUOTE]

I'm not picking a random number, I'm picking the threshold the Census Bureau uses.

EDIT: More to the point you may perhaps be thinking, if you think $130K isn't "that much money," so to speak, then that's fine. But it speaks to how we as a society overestimate wealth (and our likelihood of getting there) and how we underestimate poverty in modern American society.

[quote name='javeryh']This is definitely NOT rich where I live.[/QUOTE]

The cynical side of me then says "if you can afford to live where you live, then you're rich."

The more willing to discuss things side of me wants to inquire: what can't you afford in your neighborhood on $130K/year?
 
[quote name='mykevermin']The cynical side of me then says "if you can afford to live where you live, then you're rich."

The more willing to discuss things side of me wants to inquire: what can't you afford in your neighborhood on $130K/year?[/QUOTE]

Well, I can afford to live where I live but I'm definitely not rich by any stretch of the imagination. If I made the same amount of money but lived in Kansas or some other place in the middle of nowhere America then maybe I'd be considered a little on the rich side (but not by much). The only debt I have is my mortgage and it is modest (regionally) and I do have disposable income for things like vacations every once in a while but if my household income was $130,000 a year I'd definitely have to move.
 
You're saying you couldn't afford rent/mortgage where you live on $130K/year?

EDIT: Here's what I'm trying to say. I understand cost of living is an issue to consider, but you can not only meet the COL in the greater NY area, you can afford luxuries like vacations.

If you make over $200,000 per year, and you were put into a room with 99 other random Americans, you will find, *best case scenario*, two of them earn more money than you. So please keep that in mind when you say you aren't rich "by any stretch of the imagination."
 
thats why you gotta look at assests. someone who makes 50k a year could have as much money tucked away as someone who makes 100k a year depending on the spending habits. its certainly not that simple, but given COL, family size, debt (student loans, credit, mortgage) etc its just not as simple as saying one person is rich and one is not.
 
[quote name='mykevermin']You're saying you couldn't afford rent/mortgage where you live on $130K/year?

EDIT: Here's what I'm trying to say. I understand cost of living is an issue to consider, but you can not only meet the COL in the greater NY area, you can afford luxuries like vacations.

If you make over $200,000 per year, and you were put into a room with 99 other random Americans, you will find, *best case scenario*, two of them earn more money than you. So please keep that in mind when you say you aren't rich "by any stretch of the imagination."[/QUOTE]

I guess we have different definitions of "rich" - to me that means primarily not having to work and being able to afford pretty much whatever you want. Rich certainly doesn't mean being able to live like I currently live (which, admittedly, is pretty good but I still watch every single penny). I'd consider it to be an upper-middle class lifestyle but definitely not rich. Also, the party could be over tomorrow since everyone around me are still losing their jobs left and right.
 
This is why I have a problem when people start discussing tax hikes only for the rich like its a noble proposition. As we are discovering, its a very subjective thing. It can even be complicated further by a persons effective tax rate, ect.
 
[quote name='mykevermin']You're saying you couldn't afford rent/mortgage where you live on $130K/year?

EDIT: Here's what I'm trying to say. I understand cost of living is an issue to consider, but you can not only meet the COL in the greater NY area, you can afford luxuries like vacations.

If you make over $200,000 per year, and you were put into a room with 99 other random Americans, you will find, *best case scenario*, two of them earn more money than you. So please keep that in mind when you say you aren't rich "by any stretch of the imagination."[/QUOTE]

I think that's why we need to make distinctions between being wealthy and being rich.

When people here "rich" they think "Lifestyles of the Rich and Famous." The social meaning of the word is really tied more to the notion of filthy rich folk who can afford to buy anything they desire etc.

Where as "wealthy" probably better fits the notion of being in the upper class in terms of your household income.

Rich is more a conumeristic type of label in our society for people who can afford tons of lavish luxuries etc. Wealthy probably better fits labeling people who make a lot of money relative to most folks.

I do agree with your point that people overestimate wealth, and underestimate poverty to some degree as people take for granted how well off they are relative to many/most other folks. But I don't think that means that we can just throw the "rich" label at people based on income without factoring in cost of living, debts, number of dependents and other factors as rich is much more tied to having more money than you know what to do with, rather than just earning a bigger income than most of the population.

If I married my girlfriend we'd have a household income a little over $130K currently, but I wouldn't feel that to be rich really. We both have fairly modest 1 bedroom apartments/condos currently--nice places in good areas in the city, but nothing lavish. If we got married we'd probably just get a 2 bedroom place of similar quality and wouldn't be taking expensive vacations, buying BMWs etc. The largest chunk of my income would still be going to rent/mortgage, bills and payign back debt (student loans and car). In short, we'd be wealthy I guess, but I wouldn't say rich. I'm living much the same as I did for most of grad school, sans having a roommate now. I make a bit over twice as much as I did my last couple of years of grad school, but my expenses have gone up as much or more.
 
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[quote name='xxDOYLExx']This is why I have a problem when people start discussing tax hikes only for the rich like its a noble proposition. As we are discovering, its a very subjective thing. It can even be complicated further by a persons effective tax rate, ect.[/QUOTE]

Yeah. That's why we should tax the poor - because they're easier to point out.
 
[quote name='DarkSageRK']Yeah. That's why we should tax the poor - because they're easier to point out.[/QUOTE]

yes thats exactly what I mean. I just couldn't articulate it. Thanks
 
However much you need to live the life you want without having to work, which means it's different for everyone. Then again some people are married to their work so that may not even be part of it for everyone.
 
[quote name='RAMSTORIA']i think salary is a bad benchmark. assests are better, id say when yo have $500k in assests youre pretty damn well off, plus a decent salary.[/QUOTE]

I've got about $400K in assets, a decent salary and $0 debt. Yet, we cannot afford a car.

I'm certainly not rich. Middle class assuredly, but if I don't show up at the office every day the wheels will fall off the applecart pretty quickly. Rich to me would mean a lot more financial freedom.
 
[quote name='Fanboy']I've got about $400K in assets, a decent salary and $0 debt. Yet, we cannot afford a car.

I'm certainly not rich. Middle class assuredly, but if I don't show up at the office every day the wheels will fall off the applecart pretty quickly. Rich to me would mean a lot more financial freedom.[/QUOTE]
so your monthly utilities take up your entire salary? I'm curious how you are debt free with a decent salary yet can not afford a car.
 
[quote name='Strell']Can they have chocolate milk at every meal? Then they are rich.[/QUOTE]

I effin' love you.
 
[quote name='myl0r']so your monthly utilities take up your entire salary? I'm curious how you are debt free with a decent salary yet can not afford a car.[/QUOTE]

ill 2nd that.
 
[quote name='Ma12kez']I had to read this book for one of my classes back when I was still in college. It's a good read and may help answer some of your questions.[/QUOTE]

it is a pretty good book, but I have seen it destroy the financial lives of people that dont know any better.
 
[quote name='Ma12kez']I had to read this book for one of my classes back when I was still in college. It's a good read and may help answer some of your questions.[/QUOTE]

:lol:

"Choose your occupation wisely."

Thanks, Doctor Noshit (the authors, not you, Ma12kez).

Yes, there are huge differences between "income" and "wealth." But, in my view, anybody who earns more than 95-97% of all other Americans has no right whatsoever claiming they are middle class.

80-some-odd-% of Americans think of themselves as "middle class." Those making $25K a year, and those making $250K per year - middle class. Think of the disparity in terms of what you can afford at 250K - even living in javeryh's neighborhood - that you couldn't at 25K.

It's amazing to me that people aspire to BE rich, yet when they are, are in perpetual denial of it. I'm trying not to pick on you, javery, but your whole "we're not rich in my neighborhood" claim is kinda silly, since it sounds painfully obvious that you must be rich in order to gain entree into your nieghborhood - that is, if you weren't rich, you wouldn't be able to afford to live there at all, barely or easily. That's my argument.

Oh, right. Anyway, more than 80% of Americans think of themselves as middle class. I wonder if it's the same 80-some-odd-% that think of themselves as academically "above average." ;)
 
The man making 25K looks across the street at the guy making 100K, and says "I just wish I could make that much."

The man making 100K looks across the street at the guy making 500K, and says "I just wish I could make that much."

...

I could carry on this a bit further but you get the formula by now. There's something in here about how you have to reach an X and stick with it, or live within your means, or whatever. I don't really know all the particulars, and I'm guessing people more qualified than me can correctly pontificate on this entire thread's question better than I can, complete with pipes, derby hats, and pocket watches as they chatter endlessly into the night on their plush chairs in the rumpus room.
 
[quote name='mykevermin']:lol:

"Choose your occupation wisely."

Thanks, Doctor Noshit (the authors, not you, Ma12kez).
[/QUOTE]

I agree that this should be a given, but what do you tell all the (out of work) marine biologists and artists that can't see themselves doing anything else that makes them happy? :roll:
 
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[quote name='mykevermin']:lol:

"Choose your occupation wisely."

Thanks, Doctor Noshit (the authors, not you, Ma12kez).

Yes, there are huge differences between "income" and "wealth." But, in my view, anybody who earns more than 95-97% of all other Americans has no right whatsoever claiming they are middle class.

80-some-odd-% of Americans think of themselves as "middle class." Those making $25K a year, and those making $250K per year - middle class. Think of the disparity in terms of what you can afford at 250K - even living in javeryh's neighborhood - that you couldn't at 25K.

It's amazing to me that people aspire to BE rich, yet when they are, are in perpetual denial of it. I'm trying not to pick on you, javery, but your whole "we're not rich in my neighborhood" claim is kinda silly, since it sounds painfully obvious that you must be rich in order to gain entree into your nieghborhood - that is, if you weren't rich, you wouldn't be able to afford to live there at all, barely or easily. That's my argument.

Oh, right. Anyway, more than 80% of Americans think of themselves as middle class. I wonder if it's the same 80-some-odd-% that think of themselves as academically "above average." ;)[/QUOTE]

I think this is because we have two different definitions of "rich". Unless you are living in Newark or renting there aren't many places you can live in northern NJ outside NYC without falling into your definition of rich (leaving out for the sake of argument the lucky bastards who bought houses in the 80s before the skyrocketing prices - my next door neighbor is a 5th grade public school teacher!). Certainly everyone around me can't be considered rich but they would be by your definition because I live in one of most expensive parts of the country. I wouldn't make nearly as much as I do though if I moved so it is all relative... I think. FWIW a quick check on realtor.com shows houses in my town going from $300,000 to $2,900,000. We're not all rich are we? Or are some just richer than others? :)
 
[quote name='mykevermin']
Yes, there are huge differences between "income" and "wealth." But, in my view, anybody who earns more than 95-97% of all other Americans has no right whatsoever claiming they are middle class.
[/QUOTE]

Very true and I agree with that. They're 100% in the upper class. But is everyone in the upper class "rich" as the word is used linguistically today?

Perhaps not if the word is more tied to disposable income and material possessions as someone making $130K in Javery's neighborhood probably has less of both than someone in a cheaper area.

He's still upper class as he couldn't afford to live in the neighborhood otherwise, but he's not "rich" in the consumeristic sense as his disposable income is tight due to cost of living, maybe debts etc.

Just a semantic/linguistic debate, but I find those interesting at times.
 
[quote name='SpazX']Poor might be easier to define conceptually - you can't buy the shit you need.[/QUOTE]

Disagree - I'd say Poor is harder to define - because you have to decide what someone "needs". Obviously, food, clean water, shelter, clothing. Do you *need* electricity? What about a car? Telephone/Cell Phone? How many changes of clothing do you *need*? What kind of food do you *need*? Three squares a day with a mid-day snack?
 
[quote name='UncleBob']Disagree - I'd say Poor is harder to define - because you have to decide what someone "needs". Obviously, food, clean water, shelter, clothing. Do you *need* electricity? What about a car? Telephone/Cell Phone? How many changes of clothing do you *need*? What kind of food do you *need*? Three squares a day with a mid-day snack?[/QUOTE]

you had me agreeing for a minute there. but electricity? 3 square meals? surely you dont think poor people can save money by skipping lunch and switching to candles and washing boards.
 
*I* don't eat three meals a day. (Maybe a small snack for breakfast). I can easily afford it, I'm just not a morning person. I do love breakfast food though.

Electricity? Do you really *need* it? As you said, candles and washing boards work. It's not a glamorous life by any means, but it can (and *is*) done. I've got a grandmother (-in law) who, on nice days, actually prefers to wash her clothes by hand in her old washtub. Says she gets them cleaner than the clothes washer can.

Could *I* survive without electricity? Sure. Is it a life I *want* to live? Heck no.
 
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