How Rich Do You Have to Be to Be Considered Rich?

The word rich is defined in the dictionary as having wealth or great possessions; abundantly supplied with resources, means, or funds.

But this word does certainly have varying definitions depending on who you ask. Some would consider a rich person to have a certain amount of money or material possessions, while others don’t necessarily attach a dollar amount to a rich person, but instead define a “rich” person based on non-material things such as health, happiness, support and family.

Nevertheless, income, measured either by household or individual, is the most commonly used measure for whether or not a person (or business entity) is considered rich. Still, specific definitions abound.

In 2008, a survey by the Chicago based Spectrum Group asked affluent households (those with investible assets of $500,000 or more) how much they required to be considered rich. Of the respondents, 45% said $5 million or more, 25% said $25 million or more, and 8% said $100 million; only 22% said $1 million is enough to be rich.

“Rich” in the Political Realm

The debate on what it means to be rich has recently come to light as the Obama Administration has proposed new taxes for the “rich.”

Republicans and Democrats think very differently on this topic. President Obama had proposed preserving Bush era tax cuts for middle-class Americans and letting them expire for the top 2.5% of taxpayers — individuals who make more than $200,000 a year, and families whose income exceeds $250,000.

Even though the proposal never went anywhere, many question why $250,000 would qualify a family as being rich, thereby pushing them into a higher tax bracket.

In the Presidential campaign of 2008, Republican nominee, Senator John McCain of Arizona, set off a public outcry when he was asked the dividing line between middle class and rich. He replied that it was $5 million, a statement he said was supposed to be a joke. Mr. Obama’s response was $150,000.

Rich as a Standard of Living

Additionally, when considering the definition of “rich”, yoiu must also consider the standard of living a certainly salary level enables someone to maintain. This varies depending on location.

According to a study released in September 2010 by two Princeton University professors, in most of the United States, people feel comfortably middle class if they earn $70,000. But in New York City, the figure was a high $165,000. The median income in New York City is $55,980, according to the Census Bureau. Clearly, where you live will impact the dollar-figure you put on the definition of “rich.”

But there’s certainly one problem here: University of Colorado at Boulder professor Jeffrey Zax points out that “consumption expectations uniformly expand to fill one’s income.” In other words, the more you make, the more you spend, which may leave you never really feeling rich.

“But there’s also a strong social pressure not to think of ourselves as wealthy,” says Zax, “There’s a fair amount of self-deception going on here.” Accordingly, it is quite possible that people do not want to recognize their wealth or sign on to the belief that they are in fact rich.

Non-Monetary Definitions of Rich

There are many definitions of rich, some set by politicians, others set by government organizations, some we establish ourselves. Most of these definitions qualify someone as rich based on income or material possessions.

However, there is another camp that would consider wealth to be completely disassociated with income levels. Certain people who have their health, are happy with their professional lives, and are supported by good family and friends, would consider themselves rich, independent of the amount of money they make or have saved or inherited. For some wealth does not have anything to do with material possessions, but is more about living a full, abundant, relational life.

Sure, money can help you be more satisfied with life on some level, but, as they say, money isn’t everything. If you have food on the table, a roof over your head, and people in your life who love you, take time this holiday season to be thankful for the richness of your life!

Topics: Personal Finance

5 Responses to “How Rich Do You Have to Be to Be Considered Rich?”

  1. I think for most people “rich” means having more money than what they have when they are being asked. There are only few who consider themselves “rich.” I can tell you that I have never considered myself rich no matter what my income or wealth has been.

  2. We close to that middle income group, but your net worth is a few times what the average network is for our group. But even, we aren’t even close to being considered rich.

    In our suburban satellite city, 2 million to 3 million would be considered rich. Not that anyone who has 1 million is upset 😉

  3. There’s also the difference between assets and income. A retired couple living in a low-cost-of-living area, with children grown, a house, car and everything paid for, and even whatever “toys” they want paid for like a boat or whatever, and a big stash of frequent flyer miles, will feel richer on a minimal income than somebody with a mortgage, car payments, student loan payments, and kids they need to put through college.

  4. I have a brother that claims to be rich, and always asks me how much money I have, to which I never answer.
    My wife and I have accumulated considerable assets and have absolutly no debt, just utility bills, gas for the car, and food, clothing, etc.
    We actually have done quite well and are comfortably retired with summer home on Hood Canal in Wa. State and a winter place near Las Vegas, plus rentals.
    The Brother on the other hand has a few houses too, and drives an older Mercedes, works in his Wifes business, hands out business cards, puffs everything, and actually has mortgage payments on everything; he’s also almost 74 and reports into work every day.
    If you listen to him he’d have you believe that his only competiter is Warren Buffet.
    Sometimes tough to listen to these people.

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