A reader asked me to define "rich". Well, truly "rich" people can live a comfortable upper middle class lifestyle off their investment incomes, no job necessary. There are levels of "rich", but that's the minimum requirement. If one has to work to have such a lifestyle, one is not rich.
Barron's sometimes has humorous articles about the amount of wealth necessary to be "rich"
The lowest level is about $3.5 million, aka "beer & pretzels" rich. $3 million at a safe 5% spending rate means $150,000/yr with no work and owning a $500,000 home in a respectable area. No work necessary. That's enough for an upper middle class lifestyle in most areas of the US. And if you don't "need" a job, then you can choose to live in any low cost, pleasant area in the US.
I think the next level is "wine & cheese" rich. I don't remember the exact wealth necessary there, but I suppose it's around $7 million. On & on. [Champagne & caviar? I don't remember.] I wish I had saved that article. I'll look for it again.
By the way, even a guy making $1 million a year is NOT rich IF that's his first or second or even fourth year doing it (remember the taxes?). Wealth is necessary to be rich, income alone is NOT a sufficient condition.
PS: that's "net" investments. You have to exclude all liabilities such as home mortgage and the costs of sending any children to college. And if your investments are all in retirement funds, you can't be "rich" until you are 59 1/2 & can draw on them, OR have sufficient investments outside of retirement funds.
PPS: from a comment, to clarify the definition: By the way, not "having to work" means not having to trade or "having to work" aggressively managing one's money to generate the sufficient income. I figure a passive "Krypto Fund" style of investing can make 8-10% per year on average. So drawing 5% for current spending leaves the rest to cover inflation & downturns.
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12 comments:
with no kids or mortgage a mil is enuff not to work, trust me. lol
fisher says "fed has more work to do on inflation"
is that jaw bone or actually hike rates.
id like to know
Oh Bunkerman, i have a long way to go as per your definition, got to get to work
cover SNDK here. had a bunch made like 30 cents. leave 500 marker
Well, it's a defintion with a principled basis, not the typical "envy" basis of the demogogues.
Of course, there's a lot to a "rich" life besides money. No doubt of that.
By the way, not having to "work" means not having to trade or "having" to work aggressively managing one's money to generate the sufficient income.
I figure a passive "Krypto Fund" style of investing can make 8-10% per year on average. So drawing 5% for current spending leaves the rest to cover inflation & downturns.
XLE stocks & miners are very strong again. XLE is at an all time high. If the buyers are mostly real, it should be able to hold there two days while the virutal buyers flip. Yesterday was clearly virtual buyers mostly. Time wil tell. ;-)
gotta take 1/2 off on the CPST
go bulls lol
oh then i definitely have to work
:-(
who else gonna hit AA at 34.96?
hit more 35.50
gulp
As I suspected. I am not rich. Not even 'beer and pretzel'. Oh well.
When the D's (or R's)say they are only raising taxes on the "rich" it's a good idea to remember this definition & realize they are lying.
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