Wednesday, August 20, 2008

How much money does it take to be “rich”?

I heard this question posed on the radio the other day, and have been thinking about it pretty extensively since.

Some of the responses were “cute” answers:

  • One dollar more than what I owe to others
  • Money doesn’t determine rich, circumstance determines it.  As long as you are surrounded by those you love and are comfortable, you are rich.

Some of the responses were what one would expect:

  • $1 million dollars in the bank
  • $500,000 invested with no debt

Richer than me is simply having no credit card debt.  But what does it mean to be truly, and more importantly, achievably rich?

First of all, I think rich means that I have no debt.  To clarify further, I would own dependable vehicles, have no credit card debt, and have 6 months to a year’s worth of expenses in the bank.  I think that would be baseline rich, as in, just barely making it to the category of rich.

To carry the idea further, I would have investments that would eventually be able to take care of basic expenses from the interest earned on them.

Everything on top of that just gives fullness to the richness…  :-)

If I had to put a dollar to it, if I was given $200,000 tax-free, I would achieve the “baseline rich”.  Another $500,000-$1,000,000 would take care of the rest of that.

So, how much money does it take to be “rich” to you?

1 comment:

  1. It's hard to quantify this in a particular dollar amount you're after. Rich or wealth in my opinion is having absolutely no debt, owning all assets in the clear, and money invested well enough that it actually earns more than you can make. This allows anyone to live off of the gains for the remainder of their lifetime allowing them to do anything.