How much money does it take to be "rich"

[Distracted1]

If one could live comfortably, without owning anything, one is rich.

I know that is my dream, anyway- to have enough wealth to do without possessions.

 

[Soapy Sam]

Context is critical.

Many moons ago, I worked in Saudi Arabia. Possibly the lowest paid man in our office was a driver from Kerala, who earned about 5% of what I did and 1% or less of our manager's salary.

But.
He owned a wine shop, a small coffee plantation and he was a money lender.
A major player in his home community.
I had a 2 bedroomflat in Scotland. The folk next door had no idea who I was.

Which of us was richer?

 

[NWO Sentryman]

My definition of "rich" is anyone who makes OVER 9000!

 

[NewtonTrino]

You are rich if the interest on the interest on your capital is sufficient to maintain the lifestyle to which you are accustomed.

I like this definition as well because it acknowledges how everything is relative.

 

[case#46cw39]

Here's a way to think about it.

"John Paulson, a hedge fund manager in New York City, made $4.9 billion last year, top of the chart for hedge fund managers, according to AR Magazine, which follows hedge funds. That’s equivalent to the average per capita income of 184,000 Americans, according to my back-of-envelope calculations based on Census Bureau figures."
http://www.nytimes.com/2011/07/07/opinion/07kristof.html

So you could look at it relatively like this.

You make the equivalent of 184,000 of your country's people's average income combined you are rich. (~5 billion in USA)

You make the equivalent of 92,000 of your country's people's average income combined you are rich. (~2.5 billion in USA)

You make the equivalent of 46,000 of your country's people's average income combined you are rich. (~1.25 billion in USA)

You make the equivalent of 40,000 of your country's people's average income combined you are rich. (~1 billion in USA)

You make the equivalent of 23,000 of your country's people's average income combined you are rich. (~500 million in USA)

You make the equivalent of 12,000 of your country's people's average income combined you are rich. (~250 million in USA)

You make the equivalent of 5000 of your country's people's average income combined you are rich. (~100 million in USA)

You make the equivalent of 2500 of your country's people's average income combined you are rich. (~50 million in USA)

You make the equivalent of 250 of your country's people's average income combined you are rich. (~5 million in USA)

You make the equivalent of 50 of your country's people's average income combined you are rich. (~1 million in USA)

So I'm thinking 1/50 is rich.

But as I look at this it seems I feel this way because I'm thinking of how much on average it takes to live in the middle class in USA per year, and then seeing how much above this one is making.


Therefore, if on average it takes 100,000 for a couple with 2 kids to live comfortable, or middle class living, then

If you make 10 times this middle class number you are rich (1 million in USA)

 

[Skeptic Ginger]

It's not 1/50 case#46, that implies 1 out of every 50 people makes a million in the US. Isn't what you are saying: the income of 50 average people combined is 1 million? I don't think that is right. That makes the average income 20,000. That sounds skewed.

Could you please clarify your figures, thanks.

 

[Skeptic Ginger]

Rich and poor are relative. I'm rich compared to much of the world's poverty stricken populations but only middle class by US standards.

 

[case#46cw39]

It's not 1/50 case#46, that implies 1 out of every 50 people makes a million in the US. Isn't what you are saying: the income of 50 average people combined is 1 million? I don't think that is right. That makes the average income 20,000. That sounds skewed.

Could you please clarify your figures, thanks.

no, the argument involved how many people's average income combined someone makes in a particular country (USA in example)

So 1/50 was shorthand for:

"You (1) make the equivalent of 50 of your country's people's average income combined you are rich. (~1 million in USA)"

In other words if you add together the average per capita income of 50 people in USA you get ~1 million.

So someone who makes ~1 million in USA is making the equivalent of the combined average per capita income of 50 people in USA.

 

[andyandy]

100k a year isn't anywhere near rich BTW. That's solidyly middle class unless you've made it for a long time and saved up so that you have a lot of investments. 100k a year is actually about the average salary at my company (and it's close to the median as well).

Pounds not dollars. Not everyone is American

There is something of a tendency (in America especially) for rich people to regard themselves as "middle class". Middle class implies middle. If you are in the top 10 percent or 5 percent you are not in the middle. It's just a way of people disassociating themselves from the "rich" - and keeping themselves in with everyone else. A nice fiction but still a fiction.

If you earn 4-5 times median wage you are rich on a relative country scale. Now sure there may be other people who are also rich from net wealth, and a salary scale means that there is more potential for fluidity between rich and not rich, but that's fine.

 

[case#46cw39]

But then in my first post I realized this method would only work for countries with an average per capita income that is middle class or comfortable living in that country. This is because "rich" seems to refer to people a certain factorial distance above this comfortable middle class.

This new kind of formulation I mentioned would work in any country, rich or poor. For example, using made up numbers, let's say in Kenya it takes 20,000 dollars for a comfortable middle class living of two with 2 kids. Then if we decided a factor of 10 above comfortable middle class is what it takes to be considered rich in any country, then anyone making 200,000 would be considered rich in Kenya.

So in both USA and Kenya the rich are those who make 10 times what the comfortable middle class are making, which seems a reasonable way to look at it to me for both the rich and poor country.

 

[andyandy]

Right now I'm living abroad - my salary is paid equivalent to what I would earn in the uk but in the local currency. This means that whilst I wouldn't be rich in the uk I am pretty "rich" here. I earn 25 times more than the minimum wage and 10-12 times more than median wage. I don't see how that can be anything other than "rich". Sure if I move back to the uk I wont be "rich" anymore - but since when has being described as rich implied a lifelong membership?

 

[Supernovae]

When i'm not a slave to my day job, that is the day i'll be "Rich". It isn't about the sum of money, but about the freedom from the chains of employment. I could live rich in a simple house out in the woods with the freedom to do my hobbies, spend time with my friends and family and enjoy life. "Stuff" doesn't make me rich

 

[case#46cw39]

When i'm not a slave to my day job, that is the day i'll be "Rich". It isn't about the sum of money, but about the freedom from the chains of employment. I could live rich in a simple house out in the woods with the freedom to do my hobbies, spend time with my friends and family and enjoy life. "Stuff" doesn't make me rich

Problem is - let's say it costs 25,000 dollars a year to live that way. Where do you get this money without a job? What would be required is that you got rich as defined above (10 times more then comfortable middle class) which gave you 1 million US. Then and only then could you implement your woods living plan. And you would be able to do it for 40 years, maybe the rest of your life given the interest.

But still, you would have to first be rich as defined to achieve this goal.

 

[Supernovae]

Problem is - let's say it costs 25,000 dollars a year to live that way. Where do you get this money without a job? What would be required is that you got rich as defined above (10 times more then comfortable middle class) which gave you 1 million US. Then and only then could you implement your woods living plan. And you would be able to do it for 40 years, maybe the rest of your life given the interest.

But still, you would have to first be rich as defined to achieve this goal.

Well, i'm not lazy.. i would just work as i needed rather than work for the sake of working.

"rich" will be that day i'm comfortable enough that i don't feel the need to be an 8-5 grunt..

 

[case#46cw39]

Aha I see. Cool, I'd like something like that too. I don't need much to be happy either. Just don't want to be taxed like I'm rich lol. But apparently in the US that isn't a problem for the super rich:

"... financiers have gotten away with paying a lower tax rate than their chauffeurs or personal trainers. Tycoons have bet for years that the public is too stupid or distracted to note that in many cases they’re paying just a 15 percent tax rate."
http://www.nytimes.com/2011/07/07/opinion/07kristof.html?_r=1

 

[ufology]

You are rich if you can let the IRS do your taxes, and not even bother to see what they take..

Nevermind ... I just realized you can safely do this with no income at all, and even get a refund..

Now that is rich ... more answers like this please!

j.r.

 

[NewtonTrino]

Pounds not dollars. Not everyone is American

There is something of a tendency (in America especially) for rich people to regard themselves as "middle class". Middle class implies middle. If you are in the top 10 percent or 5 percent you are not in the middle. It's just a way of people disassociating themselves from the "rich" - and keeping themselves in with everyone else. A nice fiction but still a fiction.

If you earn 4-5 times median wage you are rich on a relative country scale. Now sure there may be other people who are also rich from net wealth, and a salary scale means that there is more potential for fluidity between rich and not rich, but that's fine.

Doesn't this depend on the curve of the actual data though? Top 5% might not be that different than top 50% if all the wealth is concentrated in the top 0.1%.

 

[ufology]

Rich and poor are relative. I'm rich compared to much of the world's poverty stricken populations but only middle class by US standards.

Certainly ... "rich and poor are relative". My relatives are rich. I'm not.

j.r.

 

[TraneWreck]

'Bout tree-fiddy.

 

[Resume]

'Bout tree-fiddy.

Buck, tree-fiddy nowadays.