POLL: At what net-worth does an individual become wealthy?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

At what networth does an individual become wealthy?

>$500 thousand
9
3%
>$1 million
52
16%
>$1.5 million
11
3%
>$2 million
53
16%
>$3 million
43
13%
>$4 million
40
12%
>More $ than listed above
120
37%
 
Total votes: 328

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investor.saver1
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POLL: At what net-worth does an individual become wealthy?

Post by investor.saver1 » Fri Jan 20, 2012 2:09 pm

The recent net-worth survey still collecting data on this board shows that participants here have a median NW of about $1,000,000. That just seems incredibly high to me. In your opinion, what net-worth value constitutes a wealthy individual. I recognize that wealth is certainly about more than money...but for purposes of this survey could we limit discussion to just the money aspect please. Net-worth should be defined as in the previous net-worth survey.

I suspect that most of us do not consider ourselves to be wealthy and I'm guessing that we will see a very high number here.
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Re: POLL: At what net-worth does an individual become wealth

Post by bertilak » Fri Jan 20, 2012 2:15 pm

I voted $1,000,000 since I didn't interpret "wealthy" to mean "filthy rich", but to enjoy a comfortable, money-worry-free, lifestyle. It also depends on age and current earning power and my vote assumed middle-aged (i.e. not yet retired) and with an income allowing for continued savings. So I see $1,000,000 is sort of bare minimum to be "wealthy".
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Re: POLL: At what net-worth does an individual become wealth

Post by sscritic » Fri Jan 20, 2012 2:16 pm

According to surveys, most people respond the way I will: a wealthy person is someone with three times as much as I have. (This ratio should be good for almost anyone with $100k plus; it may not work for someone with only $20k.)

It's all relative.

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Re: POLL: At what net-worth does an individual become wealth

Post by JupiterJones » Fri Jan 20, 2012 2:19 pm

I guess is also depends on the stage of life you're in.

A net worth of $500,000 at 65 years old is one thing. The same net worth at 28 is another.

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Re: POLL: At what net-worth does an individual become wealth

Post by Brody » Fri Jan 20, 2012 2:24 pm

My definition of financially wealthy has nothing to do with the amount of money one has. One is financially wealthy when they can maintain the standard of living that they would like for the rest of their life without having to work.
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Re: POLL: At what net-worth does an individual become wealth

Post by serbeer » Fri Jan 20, 2012 2:53 pm

Brody wrote:My definition of financially wealthy has nothing to do with the amount of money one has. One is financially wealthy when they can maintain the standard of living that they would like for the rest of their life without having to work.
Ditto

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Re: POLL: At what net-worth does an individual become wealth

Post by azanon » Fri Jan 20, 2012 3:06 pm

sscritic wrote:According to surveys, most people respond the way I will: a wealthy person is someone with three times as much as I have. (This ratio should be good for almost anyone with $100k plus; it may not work for someone with only $20k.)

It's all relative.
Speak for yourself. Once I hit a certain number, if you could get me to not be modest, I'd tell you I'm wealthy, and not give a rat's a$$ how much "you" have.

It might be relative, but I could still be wealthy if you were "more" wealthy.

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Re: POLL: At what net-worth does an individual become wealth

Post by HomerJ » Fri Jan 20, 2012 3:13 pm

I'm assuming wealthy means financially independent, and not super-own-a-private-jet-rich.

It all depends on age and lifestyle...

A 60 year old with $2 million, and a $300k lifestyle is not wealthy

A 60 year old with $2 million, and a $80k lifestyle is wealthy.

A 60 year old with $500k is not wealthy.

A 30 year old with $500k is wealthy.

etc.

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Re: POLL: At what net-worth does an individual become wealth

Post by RadAudit » Fri Jan 20, 2012 3:15 pm

bertilak wrote:I voted $1,000,000 since I didn't interpret "wealthy" to mean "filthy rich", but to enjoy a comfortable, money-worry-free, lifestyle.
And then you start to remember that $1 million throws off about $40k / per year for about 30 years at a SWR of 4%. And $40k / year doesn't sound like much today in some parts of the country.
sscritic wrote:According to surveys, most people respond the way I will: a wealthy person is someone with three times as much as I have. (This ratio should be good for almost anyone with $100k
I sort of go along with that concept of more than I have (or more than 3x or 4x or ... pick a number) but even that number looks a little too low.

Some 30 years ago my classmate suggedted a bench mark for being rich was to have more money than his wife could spend. That's beginning to look like a good definition.
Last edited by RadAudit on Fri Jan 20, 2012 4:23 pm, edited 1 time in total.
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Re: POLL: At what net-worth does an individual become wealth

Post by Grt2bOutdoors » Fri Jan 20, 2012 3:16 pm

A friend of mine puts it this way - when you have the freedom to tell your employer to go to hell and then exit the workforce without a care in the world.
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Re: POLL: At what net-worth does an individual become wealth

Post by mlebuf » Fri Jan 20, 2012 3:18 pm

I believe it's important to make the distinction between being rich and being wealthy. Rich people have a lot of money. Wealthy people have money and the time to enjoy it. A lot of rich people work long hours and live high stress lives in order to support a very expensive lifestyle.
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Re: POLL: At what net-worth does an individual become wealth

Post by ZZ » Fri Jan 20, 2012 3:21 pm

You are wealthy when more money won't change where you live, what you eat, what you wear, what you drive or who you sleep with.
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Clearly_Irrational
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Re: POLL: At what net-worth does an individual become wealth

Post by Clearly_Irrational » Fri Jan 20, 2012 3:29 pm

GRT2BOUTDOORS wrote:A friend of mine puts it this way - when you have the freedom to tell your employer to go to hell and then exit the workforce without a care in the world.
This.

However if you must have a number I'd say median household income (living on less than that will be non-fun) divided by 2.5% (a reasonable non-depleting lifetime withdrawal rate) so we're looking at:

$49,445 / .025 = $1,977,800

So basically if you have at least two million net worth you probably don't have to work unless you feel like it, I'd call that the minimum standard for wealthy.

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Re: POLL: At what net-worth does an individual become wealth

Post by Mitchell777 » Fri Jan 20, 2012 3:30 pm

Brody wrote:My definition of financially wealthy has nothing to do with the amount of money one has. One is financially wealthy when they can maintain the standard of living that they would like for the rest of their life without having to work.
This fits my definition. I believe this issue has been discussed in the past. I went to high school and college with friends who are today retired. They worked as police, teachers, manufacturing workers with old line companies with great benefits. Most retired in their 50's and a couple their 40's. Most retired with pensions in the $35K to $60K range. Although I believe I am probably worth several times what many of them are, they can maintain their standard of living in retirement without worry. They have defined benefit pension plans and retirment health care. The without worry part is key to me. I am still working, reading about safe withdrawal rates, wondering if I will be able to buy health insurance in retirement, and hoping I can retire without financial worry. I hope I can join them in a couple years so we can hang out more and do old guy stuff. I guess I'm still struggling what wealthy means to me

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Re: POLL: At what net-worth does an individual become wealth

Post by david9117 » Fri Jan 20, 2012 3:33 pm

You are wealthy as long as you have more than your brother in law :-)

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Midpack
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Re: POLL: At what net-worth does an individual become wealth

Post by Midpack » Fri Jan 20, 2012 3:33 pm

Clearly it's all relative. None of us will probably ever be wealthy in our own eyes, though we may be to others...

This guy was wealthy, before he got busted.
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TheGuru1
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Re: POLL: At what net-worth does an individual become wealth

Post by TheGuru1 » Fri Jan 20, 2012 3:36 pm

$250,000.01

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Re: POLL: At what net-worth does an individual become wealth

Post by sscritic » Fri Jan 20, 2012 3:46 pm

Wealthy is not having to think before you spend money. I can't do that yet, so I am not wealthy.

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Re: POLL: At what net-worth does an individual become wealth

Post by NightOwl » Fri Jan 20, 2012 3:46 pm

I suppose that one can always have a lifestyle that's above one's means, and high inflation can really crush wealth, so there's no amount of money that can guarantee that one stays wealthy, but I think there are numbers out there that we would all agree make one wealthy at that moment. So I don't think it's entirely relative, and I like that OP left us to decide what "wealthy" means for ourselves.

Of course, none of the numbers in the poll represent poverty, and in my way of thinking there's a huge amount of room in the comparatively-rich-when-compared-to-the-vast-majority-of-other-people-in-this-country-and-world category that makes one fortunate and blessed without making one "wealthy" as I understand that term. So when I give a number for "wealthy," I don't mean that people who fall short of that level are "poor" or that I will feel sorry for people (like me) who won't reach that level. I will settle for financially secure and consider myself lucky to attain that status.

But to be wealthy I think you have to have a sum of money that places you beyond a lot of the objections that others have raised -- age, job status, retirement status, geographic location, etc. I started with extremes. $500k for a recent retiree who has no pension and doesn't own a home doesn't seem wealthy to me, though many people would lead very comfortable lives at that level. If you have $100 million, you're wealthy, no matter where you live, how old you are, your income, etc. So I just went up/down from there, and I settled somewhere in the $8+ million range, so I voted at the high end of the poll's range.

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Re: POLL: At what net-worth does an individual become wealth

Post by Rick_J- » Fri Jan 20, 2012 3:52 pm

I think the more relevant question is whether a person is a positive accumulator of wealth as defined in the millionaire next door which proposes the a household networth of TWICE the following formula (your age x 0.1 x gross household income).

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Re: POLL: At what net-worth does an individual become wealth

Post by HomerJ » Fri Jan 20, 2012 3:57 pm

david9117 wrote:You are wealthy as long as you have more than your brother in law :-)
Heh, I'm screwed then.

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Re: POLL: At what net-worth does an individual become wealth

Post by GregLee » Fri Jan 20, 2012 4:00 pm

Wealthy is having servants and an estate roomy enough to house them and require their services. I'm not sure NW is an appropriate measure, but if so, probably wealthy goes off the top end of the scale given.
Last edited by GregLee on Fri Jan 20, 2012 4:01 pm, edited 1 time in total.
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Re: POLL: At what net-worth does an individual become wealth

Post by KyleAAA » Fri Jan 20, 2012 4:01 pm

When your portfolio can sustainably generate at least twice your annual expenses

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Re: POLL: At what net-worth does an individual become wealth

Post by Bulldawg » Fri Jan 20, 2012 4:02 pm

Rick_J- wrote:I think the more relevant question is whether a person is a positive accumulator of wealth as defined in the millionaire next door which proposes the a household networth of TWICE the following formula (your age x 0.1 x gross household income).

Yes, I like Tom Stanley's PAW ( prodigious accumulator of wealth), a rough rule -of -thumb; I also recall Dave Ramsey's background as a young millionaire before going bankrupt in his late 20s: he had something like $2m in real estate and $1m in mortgages, but banks were merged and loans called in and it got really ugly for him. So, I think a $1m net worth is still a great wealth threshold, especially with zero/low debt combined with a frugal lifestyle( in other words, a Bogleheadish profile which matches a recent NW poll on this forum !)
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Re: POLL: At what net-worth does an individual become wealth

Post by ruralavalon » Fri Jan 20, 2012 4:05 pm

rrosenkoetter wrote:I'm assuming wealthy means financially independent, and not super-own-a-private-jet-rich.

It all depends on age and lifestyle...

A 60 year old with $2 million, and a $300k lifestyle is not wealthy

A 60 year old with $2 million, and a $80k lifestyle is wealthy.

A 60 year old with $500k is not wealthy.

A 30 year old with $500k is wealthy.

etc.
Basically agreed, but would expand to say: It all depends on age, lifestyle and cost of living at your location.
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Re: POLL: At what net-worth does an individual become wealth

Post by Higman » Fri Jan 20, 2012 4:08 pm

As a young boy I watched the TV show “The Millionaire” which debuted in 1955. John Beresford Tipton Jr. would hand out $1M tax free to a lucky recipient each week. To my mind back then a millionaire was rich. However the equivalent $1M in 1955 dollars is now $8.3M according to the CPI Inflation Calculator. So my vote is “more than listed above”.

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Re: POLL: At what net-worth does an individual become wealth

Post by Sheepdog » Fri Jan 20, 2012 4:17 pm

I said $500,000. I do not consider that wealthy, but I believe that the vast majority of Americans believes it is.
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Re: POLL: At what net-worth does an individual become wealth

Post by BlueEars » Fri Jan 20, 2012 4:23 pm

Inequality:

filthy rich > rich > wealthy > well off > average working stiff > working poor > on welfare > skid row

I voted $4M for wealthy because that would throw off about $160k/year in retirement. But this is not "mansion and yacht" territory. A bit of word play here.

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Re: POLL: At what net-worth does an individual become wealth

Post by FafnerMorell » Fri Jan 20, 2012 4:38 pm

As folks are saying, it really depends. I like "A friend of mine puts it this way - when you have the freedom to tell your employer to go to hell and then exit the workforce without a care in the world."

But I view stages of wealth as:

Extremely wealthy: >$100 million (any age).

Wealthy: >$10 million (any age)

Well-off: >$3 million at retirement, or, if you're younger, you're approaching this amount provided the market doesn't collapse or the government doesn't default on SS/bonds, you do (or should) have enough money/investments to retire comfortably but not lavishly (you can vacation at DisneyWorld with the grandkids, but you're not staying in the Grand Mickey Suite or whatever). You need to watch what you spend, but as long as it's reasonable, you'll be OK.

Above average: >$1 million at retirement, or, if you're younger, you're approaching this amount. No short-term debt (i.e. credit cards), and long-term debts (mortgage, student loans) are manageable with current income, and you're able to save 10-20% and you've got enough cash set aside to handle emergencies.

Average: You're scared to death, or should be, whenever someone asks you about retirement. You're kind of, sort of, barely making ends meet.

Below average: You really wish you had the problems that the average people do, but you're too busy digging a shallow grave to hide the body of repo man you killed this morning to give it much thought.

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Re: POLL: At what net-worth does an individual become wealth

Post by Dale_G » Fri Jan 20, 2012 4:44 pm

I'll be wealthy when I buy a business class/first class ticket on an international flight (on my own dime) without giving it a second thought.

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Re: POLL: At what net-worth does an individual become wealth

Post by sommerfeld » Fri Jan 20, 2012 4:47 pm

sscritic wrote:Wealthy is not having to think before you spend money. I can't do that yet, so I am not wealthy.
By that standard, I might never be wealthy.

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Re: POLL: At what net-worth does an individual become wealth

Post by Sheepdog » Fri Jan 20, 2012 4:48 pm

Dale_G wrote:I'll be wealthy when I buy a business class/first class ticket on an international flight (on my own dime) without giving it a second thought.

Dale
Agree with that 8-)
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Re: POLL: At what net-worth does an individual become wealth

Post by manuvns » Fri Jan 20, 2012 4:50 pm

most people say $2 mil is when you are above middle class . i think $3 million is when you can move away from working class .

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Re: POLL: At what net-worth does an individual become wealth

Post by K'zoo » Fri Jan 20, 2012 5:35 pm

When I was 20 years old "a millionaire" was, wow, wealthy.

Now, forty years later, that million does not buy nearly as much. Maybe people here do, but a lot of people don't think about "a lot of money" in real dollars. Their mental image of a lot of money gets set a some point in the past and they keep that image regardless. (And before anybody says it, yes, a million is still a lot of money.)

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Re: POLL: At what net-worth does an individual become wealth

Post by scrabbler1 » Fri Jan 20, 2012 5:41 pm

KyleAAA wrote:When your portfolio can sustainably generate at least twice your annual expenses
I like ths one. I am an early retiree whose income from non-retirement investments more than covers my expenses but not in the 2X neighborhood (not that far from 2X, though). If it were 2X I would consider myself wealthy although to most everyone else I know, I am wealthy because I don't have to work any more and can sustain my current lifestyle (as some others here have posted).

BTW great thread and a great variety of interesting and funny replies! :)

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Re: POLL: At what net-worth does an individual become wealth

Post by SGM » Fri Jan 20, 2012 5:54 pm

I think wealth ought to be thought of as the British do, i.e., how much income one has per annum.

My buddy who has a $120,000 pension with a cola and annual health care benefits worth another $10,000 and say 500,000 in investment and a 500,000 paid off house is wealthier than a second buddy with 4 million in investments and only social security and medicare.

$4 million in investments can throw off say $120,000 in dividendsand muni interest . If one feels comfortable with a withdrawal rate of 4% it is worth 160,000 per year.

I think the first buddy is wealthier.
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Re: POLL: At what net-worth does an individual become wealth

Post by ocdokie » Fri Jan 20, 2012 6:25 pm

ZZ wrote:You are wealthy when more money won't change where you live, what you eat, what you wear, what you drive or who you sleep with.
Unknown
Am I semi-wealthy if I can say that four out of these five are true for me?

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Re: POLL: At what net-worth does an individual become wealth

Post by DoWahDaddy » Fri Jan 20, 2012 6:46 pm

RadAudit wrote:
bertilak wrote:I voted $1,000,000 since I didn't interpret "wealthy" to mean "filthy rich", but to enjoy a comfortable, money-worry-free, lifestyle.
And then you start to remember that $1 million throws off about $40k / per year for about 30 years at a SWR of 4%. And $40k / year doesn't sound like much today in some parts of the country.
Well, I voted over 5 mil for the opposite reason our mysteriously domiciled bertilak voted 1 mil.

If you can live a worry free lifestyle, that's comfortable.

If you can sit in the front row at the Academy Awards while being served dinner in your seat by Chef Daniel Boulud, that's rich.

If you can do the above in your skivvies, that's wealthy.
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Re: POLL: At what net-worth does an individual become wealth

Post by GregLee » Fri Jan 20, 2012 6:55 pm

But that poll is about rich, not wealthy. It's not the same: http://www.youtube.com/watch?v=4m37JkkGjAY.
Last edited by GregLee on Fri Jan 20, 2012 6:58 pm, edited 1 time in total.
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Re: POLL: At what net-worth does an individual become wealth

Post by Mrs.Feeley » Fri Jan 20, 2012 6:58 pm

I suspect the financial industry's definition of what makes a wealthy household is far different from ours. From a recent New York Times article (http://www.nytimes.com/2012/01/14/your- ... nch&st=cse):

"When Merrill Lynch recently discouraged its thundering herd of brokers from taking on new clients with under $250,000 in assets available for investing, it wasn’t a big surprise. Brokerage firms have been making these sorts of moves for years, and Merrill is notorious for a leaked memo in the late 1990s that discouraged “charity work” for clients with less than $100,000 in assets — “poor people,” as the memo put it."

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Re: POLL: At what net-worth does an individual become wealth

Post by nisiprius » Fri Jan 20, 2012 7:38 pm

http://en.wikipedia.org/wiki/High-net-worth_individual :
The Merrill Lynch - Capgemini World’s Wealth Report 2009[3] defines HNWIs as those who hold at least US$1 million in financial assets and ultra-HNWIs as those who hold at least US$30 million in financial assets, with both excluding collectibles, consumables, consumer durables and primary residences.
The reference cited in support is Cap Gemini 2009 World Wealth Report
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Re: POLL: At what net-worth does an individual become wealth

Post by Liquid » Fri Jan 20, 2012 7:38 pm

GregLee wrote:
But that poll is about rich, not wealthy. It's not the same: http://www.youtube.com/watch?v=4m37JkkGjAY.
The poll is about both --> 150K/yr was "rich," 1mil was "wealthy." Before you say anything, yes, those figures do not make sense when taken together... that is why the wealth distribution is the way it is. Nevertheless, I took 150k/yr at 4% to arrive at our current definition of wealth.

Btw I enjoyed the video :sharebeer

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renditt
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Re: POLL: At what net-worth does an individual become wealth

Post by renditt » Fri Jan 20, 2012 7:49 pm

10 million plus

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Re: POLL: At what net-worth does an individual become wealth

Post by VictoriaF » Fri Jan 20, 2012 8:08 pm

I will be very wealthy right before I die, because I will have much more money than I will be able to spend.

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Re: POLL: At what net-worth does an individual become wealth

Post by TheEternalVortex » Fri Jan 20, 2012 8:34 pm

It really depends on the person. I think wealthy means that you have enough money that you don't worry about having enough for what you want to do.

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Liquid
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Re: POLL: At what net-worth does an individual become wealth

Post by Liquid » Fri Jan 20, 2012 8:40 pm

Wake up, will ya, pal? If you're not inside, you're outside, okay? And I'm not talking a $400,000 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. :dollar

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Re: POLL: At what net-worth does an individual become wealth

Post by umfundi » Fri Jan 20, 2012 8:42 pm

GRT2BOUTDOORS wrote:A friend of mine puts it this way - when you have the freedom to tell your employer to go to hell and then exit the workforce without a care in the world.
http://www.youtube.com/watch?v=TOIdsM8FrIk&feature=fvst

Let me just suggest you are wealthy when you live below your means, and have a plan to do so for the rest of your life.

Keith
Déjà Vu is not a prediction

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ofcmetz
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Location: Louisiana

Re: POLL: At what net-worth does an individual become wealth

Post by ofcmetz » Fri Jan 20, 2012 8:52 pm

Dang it, my brother in law has more than me, but his wife is a pharmacist so its not really fair right. :D

I voted $1,000,000, because unless you count pension plan values, no one in my circle has that.

I never ever considered wealthy and rich to be two different things. They were always interchangeable in my vocabulary. Of course we sometimes refer to someone as "stupid rich". Basically this is someone who can't spend all of their money even if they tried.

And now I post a mostly unrelated video from one of my favorite shows. I like to think of the first class thing as something that rich people might do for fun. ;)

http://www.youtube.com/watch?v=BcnpAqQK774
Never underestimate the power of the force of low cost index funds.

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friar1610
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Re: POLL: At what net-worth does an individual become wealth

Post by friar1610 » Fri Jan 20, 2012 9:32 pm

ZZ wrote:You are wealthy when more money won't change where you live, what you eat, what you wear, what you drive or who you sleep with.
Unknown
That's a great quote! By that measure, I am wealthy many times over.
Friar1610

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