# Define What It Means To Be Rich (in terms of wealth) **URL:** \ **Category:** In My Humble Opinion\ **Created:** [August 19, 2010, 1:24am UTC](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688 "2010-08-19T01:24:45Z")\ **Posts on this page:** 6\ **Page:** 2
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [August 20, 2010, 1:49pm UTC](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688/21 "2010-08-20T13:49:18Z")
Since the OP said “what is rich (in terms of wealth)”, wealth is commonly defined as a person’s net worth, not your earnings. So add up the fair value of all of your assets and deduct the amount of all of your debts, and that’s your net worth. The author’s of the “Millionaire Next Door” series, have a formula to determine what your accumulated wealth (AW) should be AW = Your age X your total annual income (excluding inheritance income) / 10 Compare this to your net worth. If the amount is less than your net worth, you are doing a poor job of accumulating wealth. If the amount is greater than your net worth, you are doing a good job of accumulating wealth. Example: Tom’s net worth is as follows: House - $150,000 Car - $7,500 Household goods - $10,000 401k plan - $40,000 Cash savings - $5000 Mortgage - ($115,000) Credit card debt - ($3,000) NET WORTH - $94,500 Tom is 35 years old and has an annual income of $50,000. AW - 35 X $50,000 / 10 = $175,000 AW - $175,000 Net worth - $94,500 According to this Tom has been a poor wealth accumulator. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [August 20, 2010, 1:52pm UTC](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688/22 "2010-08-20T13:52:23Z")
Simply put, if you are a saver and investor, you are more likely to be wealthy than if you are a spender. ---
**Author:** ![DCnDC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dcndc/32/2842_2.png) [@DCnDC](https://boards.straightdope.com/u/DCnDC)\ **Post date:** [August 20, 2010, 1:59pm UTC](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688/23 "2010-08-20T13:59:48Z")
I would consider a person (preferably myself) truly “rich” when “have to” has been removed from everyday vocabulary. ---
**Author:** ![MeanOldLady](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/meanoldlady/32/10737_2.png) [@MeanOldLady](https://boards.straightdope.com/u/MeanOldLady)\ **Post date:** [August 20, 2010, 2:04pm UTC](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688/24 "2010-08-20T14:04:11Z")
Being rich means eating caviar for breakfast, and taking champagne bubble baths. ---
**Author:** ![Tully\_Mars](https://avatars.discourse-cdn.com/v4/letter/t/7ab992/32.png) [@Tully\_Mars](https://boards.straightdope.com/u/Tully_Mars)\ **Post date:** [August 20, 2010, 2:38pm UTC](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688/25 "2010-08-20T14:38:15Z")
> [@emacknight](#): > > Is it about income, material wealth, assets? It’s about Time. We as humans have a finite amount of time. Wealth (IMHO) is the measure of one’s freedom to choose how to spend that time. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 20, 2010, 8:07pm UTC](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688/26 "2010-08-20T20:07:04Z")
> [@MeanOldLady](#): > > Being rich means eating caviar for breakfast, and taking champagne bubble baths. But what if I like neither? Cost wasn’t the reason I had poached eggs on toast this morning. Nor is it the reason I don’t eat more caviar. It’s kind of funny the way people form these concepts in their heads. I had a lot of caviar as part of my work in catering. If I were to become rich, I’d end up eating less of it than I do now. > [@Tully\_Mars](#): > > > [@emacknight](#): > > > > Is it about income, material wealth, assets? > > It’s about Time. We as humans have a finite amount of time. Wealth (IMHO) is the measure of one’s freedom to choose how to spend that time. I had a pretty interesting conversation with a bunch of reasonably well paid, late 20s, engineers. At the time, my wife and I were starved for vacation time, having spent 6 weeks in India just a few months after she started her current job. The question posed was if given the option, would you choose an extra week of vacation a year (they all had 2) or a small raise. My wife was the only one that wanted more vacation time. The rest of them just wanted more stuff. [Previous page](https://boards.straightdope.com/t/define-what-it-means-to-be-rich-in-terms-of-wealth/550688.md?page=1)