What’s the dividing line between rich & middle class?
Please try to give a numberic answer; don’t just say “owning a boat.” Is a married couple with $250K shared income, a two-story house they own free and clear, no student loan debt, and two non-special needs kids rich? How about that same family with a half-million dollar mortgage and a kid attending Harvard?
The above suggestions are only sugestions; give your own thoughts.
Enough to live a middle class lifestyle or better for the rest of your life without needing any more money. Doesn’t need to be cash in the bank at the start, it could be solid investments which produce a steady return. If you need more money to live a decent life then you aren’t rich.
Do you mean without needing to work? If somebody earns enough to enjoy this lifestyle while they continue to work, or do they have to enjoy this income from assets.
Sure, but what do you mean by middle class lifestyle?
In the thread that spawned this one–the one about breaking a promise to become a billionare–the character Dave is living well below his means. As I mentioned in that thread, Dave’s real-life inspiration (not as brilliant as the fictional one, but still posssessed of some serious game) basically lived like a college student even though he was pulling down a mid six-figure income. He worked on projects to amuse himself, but lived in a studio apartment, biked or rode the bus everywhere, and only bought new clothes when his sisters’ nagging got more annoying than the holes in his shorts. I expect he’d still be going that way if Thanatos hadn’t tapped him on the shoulder and asked for his ticket.
Was the real-life Dave rich?
If they need to work then they aren’t rich. Maybe close, maybe they could still maintain a decent lifestyle without working, but if they never work again and would become poor as a result then they are not rich in my book. I consider it to be equivalent to ‘independently wealthy’. YMMV
That’s in the eye of the beholder. I’d say at a minimum safe secure housing, clothes without holes (unless you like holes in clothes), enough to eat, plus modern amenities, car, TV, computer, enough money to go out to eat once and a while, a modest annual vacation, the means to cover medical expenses. Stuff like that. For some it’s much more, I don’t think you can get a lot less but for some it can be a very modest lifestyle.
Not enough info. How much did he have in assets and debts? I’ll go back to what I said to UDS, if he never earns any more money through working, and he eventually becomes poor (not by burning the money, just by maintaining a decent lifestyle), then he’s not rich. That’s how I see it, I can understand people considering rich to be much less. And I’d say just being rich in terms of money isn’t everything either.
It depends on where you live but based on where I’m most familiar I’d say a couple making 300k+ in Colorado or 400k+ in California would be rich. When my wife and I were in that range we certainly felt rich and could afford to do what we wanted to when we wanted to with little saving.
That’s not to say we were megawealthy. I don’t think assets are what separate the rich from the middle class the middle class have to worry about paying for their vacation while paying their normal bills it normally involves saving or making decisions about what you’d rather have. Once your rich you can do what you’d like without worrying how you’re going to pay for it.
This of course is an internal metric and allows you to be “rich” at any level of money except for the poorest as long as your likes are cheap enough. I think for others to agree you’re rich there needs to be a level of spending on housing and activities that at least is middle class (3 bed 2 bath home, 2 cars, annual family vacation, hobbies or toy that are moderately expensive)
A numeric answer in monetary units doesn’t work well, because the amount varies by location, family size and other variables. It needs to be in terms of what you can do.
For me, “rich” is someone who doesn’t need to work in order to keep his desired expenses level: they could sit back and just withdraw from the magical money machine whenever they need to.
Two of my uncles had exactly the same income level, but one had four children and the other none: the same income gave them different amounts of disposable, but neither one ever got rich as neither one would have been able to “just retire” before their retirement age actually kicked in.
One of my classmates, whose family owns vineyards and wineries all over the world: she could have just sat back and let the sun warm her. In fact, she pushed several of her cousins into either doing that or taking jobs unrelated to the family business, because she decided very young she’d be the one In Charge and getting in her way when she says she’s going to do something is a bit unhealthy. She could have laid back, she just don’t wanna.
One little idiot my mother once tried to set me up reflects the worst kind of rich: she hasn’t worked a day in her life, inherited enough real estate to just go to the magical ATM, wouldn’t recognize sweat if it bit her ass off, but thinks of herself as “working class” and of me as “rich”… because my lastname is fancier :smack: I’ve actually cleaned other people’s toilets as a job, she doesn’t even know where the toilet cleaner is in her house.
I would consider that “upper middle class”.
A true rich person has enough wealth or passive income to live a rich person’s lifestyle for the rest of their life.
I think this quote from Wall Street describes it best:
“I’m not talking a $400,000 (in 1987 USD) a year working Wall Street stiff flying first class and being comfortable, I’m talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player, or nothing.”
“Rich” to me describes a class of people who control large amounts of wealth and wealth producing assets. For all intents and purposes, no reasonable (or many unreasonable) expenses are above their means.
My wife and I are in the top 1%-3% or so income-wise. We have a very comfortable lifestyle, but I don’t consider us “rich”. Most of our income comes from our jobs, which can disappear tomorrow. Although I have decent work life balance, I’m still at the whim of my bosses. We live in a very expensive part of the country. We don’t live particularly extravagantly, but we do have to consider our finances for big purchases like cars, college, major renovations, stuff like that.
I consider us part of the “upper middle class” or maybe “affluent professional class”. People like doctors, lawyers, small business owners who do reasonably well, but aren’t so wealthy they can just do whatever they want.
Rich people don’t have to worry about financing their children’s education. They don’t have bosses using wealth as carrots and sticks to tell them where to go and what to do. They have enough disposable income to buy toys that are above the financial reach of most individuals. They mostly live in exclusive enclaves with other rich people, send their kids to exclusive schools, socialize in exclusive clubs.
I’m not really sure of the dividing line. There is always someone with more money and wealth, so there really isn’t a hard and fast line. Kubrick actually makes a theme of this in the film Eyes Wide Shut. Cruise and Kidman live in a very upscale Manhattan apartment (he’s a doctor and I forget what, if anything, she did). Their apartment pales in comparison to the townhouse where his friend threw the party at the beginning of the film. And that townhouse was dwarfed by the gated estate in Westchester or Long Island or wherever the heck the creepy orgy was being held.
It seems to usually come down to whether ‘rich’ is synonymous with ‘no further need to work to maintain one’s standard of living’, which in turn has to be at least some accepted standard of upper middle class lifestyle’, or whether a) you can be ‘rich’ though you still need to work to remain so or b) being able to maintain an upper middle class lifestyle without working isn’t always enough to be ‘rich’.
For political purposes (as in ‘tax the rich’) it doesn’t depend on financial independence, just income, and the great majority of people included as ‘rich’ in the political definition have to keep working to maintain their standard of living.
In everyday definition it seems more likely to depend on financial independence. But that also depends on age. A person or household that’s earned the equivalent of $250k over decades and been responsible savers might be ready to give up work well before age 65 financially speaking, a 30 yr old making that much and just starting a family is not.
Then you could also use a world definition by which most people in the so called ‘rich countries’ are rich compared to the rest of the world.
I think this will be lower than most of the above, but I want to use a nice round number: one million.
However, there are caveats: first, net worth of course. It also has to be liquid. So someone who has a million as a retirement fund isn’t necessarily rich, but someone who could go out and spend a million and then still pay the bills is rich.
That’s not to say that with a million you’re set for life, but that wasn’t the question.
I’d put that in the category of ‘fabulously wealthy’, or ‘super-rich’. It’s up to you to decide though. For practical purposes the rich are those you consider to be rich. But I don’t think you’ll get many people to say someone who never has to work again to maintain a decent lifestyle isn’t rich. But they can certainly be richer.
Let’s not forget how age and life expectancy affect this. A lot of people retire rich because they have enough for a decent lifestyle and won’t live that much longer. A lot of other people might seem to retire rich but then live longer than they expect and time and inflation leaves them poor in the end. If you’re young you need a lot more to qualify as rich, I’d say enough to make sure your investments grow because you can’t predict how long you’ll live and what your cost of living will be in the future.
People may also consider rich to be status of the moment. Plenty of money on hand, no need to work currently, but time has a way of eroding that status. I remember as kid hearing often “A lot of people drive Cadillacs that haven’t been paid for”.
I don’t know exactly. But afer he died each of his three sisters inherited about a hundred grand from him, and a good amount went to charity, so clearly he was in the black when he caught that ride on Charon’s ferry…
Since inflation always changes absolute dollar figures, we have to go by percentiles. I think that if you are in the 90th percentile or above, you’re rich.
Having so much money, you don’t have to invest it to have enough to live comfortably on.
I consider investing money as work and stressful. So you would not have to work or be stressed out each time the stock market burped or interest rates went up.
I’d say not even getting income from assets. Having enough cash on hand to live that lifestyle without any income of any kind, not even interest, not even a garage sale. So to make the math easy, if it requires 50K a year and you’re going to live 40 more years you’d need at least 2 million in cash.
So apparently you can’t be rich for a while, you can only be rich permanently. That doesn’t make sense.
Sure, you can be temporarily rich. But to say someone is rich, without qualification, I’d say it has to be enduring.
Personally, I think it’s really about wealth, not income. To be “rich” in my mind, you have to have enough wealth (stocks, bonds, real estate, ownership stakes, etc…) to be able to maintain the lifestyle of the “rich”, and not draw down your principal in doing so.
Someone with a million bucks in the bank who can bring home 50-80k a year in investment income doesn’t qualify as “rich” in my book. That’s not even enough to maintain anything other than an upper middle class lifestyle for a single person, much less a family.
If you can make a quarter million annually in income off your wealth, then you’re in the bottom rungs of what I’d consider “rich”.
People making that much and more in income often maintain that kind of lifestyle, but they still have to go work for someone else. Their bosses are likely rich however. It’s basically the difference between the partners and the senior associates at big law or professional services firms. One is rich, one’s just very well paid.
And FTR, nobody with enough money to be considered “rich” in my book actually manages their own money; they have investment management firms that do that for them.
Heh. So imagine a couple that’s, like, on disability: they’re not working, so they don’t “need to work” – and figure that, after buying groceries and paying the mortgage on a small house each month, they (a) still have enough income left over to go out to eat once in a while, and (b) put enough in the bank to get clothes without holes as needed while saving for their modest annual vacation.
If they have a TV and a car and a computer, and “never work again”, are they rich?
If they can maintain that lifestyle on disability income then I’d say yes. They are free from the concerns about surviving in the future. If being rich is just about having more than someone else then only the poorest man is not rich.