It’s worth noting that most “rich” people DO work. So maybe you have enough investments to provide $150-200k in income each year, and THEN you have a job where you make another $150k (you have a good job, because either you got those investments from earnings, or you were born with wealth and connections and professional school paid for). That’s HUGE, because that $150k is basically disposable income, if you don’t need to cover basic expenses, save for retirement, or save for emergencies. That extra income allows pretty lavish living while still, honestly, continuing to build that nest egg.
Eh, I could do that. It probably would only cost a couple grand or so. That’s not the kind of thing I would do, but I could do it.
Now… that kind of thing several times a year on the other hand…
Cool. I’m rich, but still closefisted. Thanks, guys!
…maybe I can afford to buy a valve trombone? Or at least an alto horn?
Yes, several times a year, actually, the one person I knew of that did that regularly, one time decided to make a world tour of it and play golf in as many countries as he could.
I think the cutoff for rich starts at about 5 million in assets. At that level you can buy a home outright in most of the world (however if you live in an high cost of living city, it’ll have to be a modest house) and still have enough to live comfortably on investments.
Some guy on reddit had an interesting breakdown on different levels of rich.
Thanks Corry El, you explained my point better than I did. If you’re carefully budgeting and watching investments to insure you make it the last 30 years, you’re not rich. Even if living an upper middle class lifestyle.
Maybe rich should be defined by the probability of surviving big mistakes with your wealth still intact.
A Kennedy could make a huge investing mistake and survive the loss with his lifestyle unchanged. I cannot. He’s rich. I am merely doing better than average.
Rich means never having to say “Hold on - I think I have a coupon for that!” Or not caring whether something is on sale before you buy it. Or not having to save up to get something you want.
The difference for me is not rich vs. not-rich; it’s rich vs. wealthy. The guy who gets a million dollar check is rich. The guy who signs the million dollar check is wealthy.
Rich means you have money. Wealthy means you have money without thinking about it.
I know several people who are rich. I know one person who is wealthy.
Wealthy is better than both.
Regards,
Shodan
Some people consider me rich. Me from 45 years ago would consider me rich. But really I just have enough. Rich people have more than enough. Sometime they don’t realize they have enough and keep wanting more, that’s how they become rich in the first place.
How much money is that? At the low end it’s a guaranteed income of at least 6 figures after taxes and full ownership of a decent home, some cars. That’s at the low end, but it leaves you to leave a life of leisure for years to come. If you are young enough you may need a higher income to guarantee it will keep up with inflation for 50 years or more.
Woo-hoo, I’m rich! I’m not going to be buying a Rolls anytime soon, but we’re certainly comfortable. No debt, a newish car, enough money in my checking account so that if I really wanted that $8,000 Gibson, I could write a check for it. We fly first class when we travel; that’s not often, as we did a lot of traveling in our working life. We donate to charities and political causes, and go out to eat whenever we feel like it.
Are you talking about a new pair of jeans, or an exotic Italian sports car? If you’re talking about jeans, then I guess I’m rich.
But are you doing all that solely on the income from your invested wealth, or do you drag your ass into work every day for a paycheck?
That’s kind of the point- when you can do that off of investment income, it implies that you’re living a very comfortable lifestyle() and doing so without being dependent or restricted by someone/something else. Nobody’s telling you that you can’t take a 3 week vacation because of upcoming projects. Nobody’s saying that if you don’t schlep yourself somewhere by 8:15 every morning, that you’ll lose that lifestyle.
() Upthread I chose upper middle class as that very comfortable lifestyle, because that’s the point at which the “have to discuss with the spouse” threshold exceeds most mundane things. Like say… going to Home Depot to get a new faucet handle, and seeing a cool new tool for $150. The middle-middle guy might have to budget for that, or at least fit it in with the rest of the planned spending. The upper middle guy says “Cool!” and goes home with it, without a second thought. (the rich or wealthy guy is already having someone else work on his plumbing and probably doesn’t go to Home Depot)
We retired ten years ago.
Anything that involves living comfortably at an upper-middle class lifestyle isn’t rich. I’m not sure of my definition, but it’s something more than living a middle class lifestyle.
So Buffet still living in his normal middle class house in a shitty mid west town isn’t rich?
IMHO, the main difference between being “rich” and merely upper middle class (or “wealthy” vs “rich” as you say) is that real rich people have significant revenue producing assets that continue to generate money with or without their labor. That could be a company, real estate, capital investments or just a shit-ton of money earning interest.
Of course he is. But a big reason a lot of wealthy celebrities and other people who come into a giant windfall don’t stay rich is because they don’t put that money to work investing in real estate or businesses. Not like those ventures don’t have risk too. But a person doesn’t stay rich blowing their money on useless expensive crap with no long-term resale value.
Buffet is rich because his wealth would allow him to live like a master of the universe if he so desired. That he chooses to live astronomically far below his means does not negate his OMG-rich status.