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How Do You Know When You’re Really RICH?

Quick, answer this question with the first number that comes to mind:  How much money does it take to be 

Of course, you may argue, there’s more to being rich than having money—there’s love, health, freedom, etc. All true. But for the purpose of this blog, and in the spirit of research, let’s stick with a specific figure.

According to Robert Frank’s blog, The Wealth Report, no one can agree on a specific amount.

  • The Federal Reserve claims you’re in the top 5% of Americans if you have a networth of $1.4 million.
  • In a poll by Spectrem Group of affluent people, only 22% said $1 million makes you rich.
  • The majority (45%) of this poll said it took at least $5 million to qualify.
  • A quarter of the respondents swore that you need a minimum of $25 million.
  • A few (8%) even put the winning number at $100 million.
  • Other studies find that people “always give a number that is twice their current net worth or income. Those with $100,000 in income say $200,000, while those worth $5million say $10 million.”

The best definition I’ve ever seen for “rich” goes like this: “rich is when you work because you want to, not because you have to.” I don’t know who said it, but it makes the most sense.

Anyone have a better definition than that?? Leave me a comment below.

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Comments & Feedback

  • Mandi

    Life can be very rich, if you are not stressing whether you will be able to pay your rent or not. I feel blessed that I have had a really great life, so far. Money does not buy happiness, but it does provide financial security. So when someone works in a field that might be different than where they started. I try to remember, life is a journey, not a destination. Each of our life experiences can differ overtime.

  • Russ Pedersen

    I once saw a definition of being rich as “You could lose $10k and not really be hurt by it.” I always thought that was an interesting way to look at it.

    • barbara huson

      Hmmmmm…I’ve actually ;never heard that before. But I thought about it…and realized, if that’s true, then I am rich. I just lost $10,000 investment in a start up….I was really upset. I didn’t like losing that money. But I wasn’t hurt by it. Thanks for giving me another perspective.

  • Kathryn Jarrell

    Rich is when your money makes enough income for you to live on.

    • barbara huson

      OH YEAH!!! That’s the best way to be rich, isn’t it. And the interesting thing about what you said, is you don’t need a lot of money to do this. …if you invest it carefully in stocks and bonds that throw off income. Thanks Kathryn!

  • Cindy Kiel

    I agree with Robert Frank. There is no one right answer. If I lived in the rural Midwest. 1.4 million would feel rich. In San Francisco, not so much. The actual figure is relative to lifestyle and geography. My definition was how much I would need in order to be completely debt free, providing fundamental living costs for my family and able to live (and play) on interest or residual income with out dipping into principal. For me, the figure is 7.4 million assuming a 5% annual rate of return. I’m about 6 million away from that. My other option would be leaving California for a cheaper state.

  • barbara huson

    That is so true, Cindy. It really does depend on where you live. But if you’re loving SF….here’s hoping you create that $7.4 million soon. It’s one of the reasons I moved from SF 23 years ago. Big difference ! Thanks for your comments.

  • Janine Finney

    Such a great topic/question. Having just lost my mom, after a very difficult time, I am so inspired to enlighten people who have no clue what happens when one needs long term care. I don’t think enough people have long term care insurance. My mom needed to be turned every 1 ½ hour, due to a bed sore, and it was costing $20K per month to provide in home care….it wiped them out of their savings. They thought they were fine, but turns out that when we live longer, it can cost enormous amounts of money to provide quality care.

    There’s a lot of room for education around this topic!

    Thank you for all that you’re doing to get folks thinking!

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Meet Barbara Huson

When a devastating financial crisis rocked her world, Barbara Huson knew she had to get smart about money… and she did. Now, she wants to empower every women to take charge of their money and take charge of their lives! She’s doing just that with her best-selling books, life changing retreats and private financial coaching.

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