How Much Does It Take to Be Wealthy?

Here's an interesting post from Bloomberg asking how much do you need to become wealthy?

The results:

• Millennials say you need $1.3 million to be financially comfortable and $2 million to be wealthy
• Gen X says you need $1.4 million to be financially comfortable and $2.6 million to be wealthy
• Boomers say you need $1.6 million to be financially comfortable and $2.7 million to be wealthy

Interesting how the older you get the more you think it takes to be wealthy. :)

Before you set a number, consider these net worth percentiles in the U.S.:

• 50th percentile: $97k net worth
• 75th percentile: $370k net worth
• 90th percentile: $1.2 million net worth
• 95th percentile: $2.4 million net worth
• 99th percentile: $10.4 million net worth

Now that you have those numbers, what would you say it takes to become wealthy?

I think you could argue that it takes more to be financially comfortable than to be wealthy.

For instance, $1 million makes you wealthy compared to most Americans -- only a bit over 10% have more.

But would you say you'd be financially comfortable with $1 million net worth? Maybe comfortable enough to relax a bit, but not comfortable enough to retire -- unless your spending was really low.

Anyway, what are your thoughts on the issue? What do you say it takes to be wealthy in America?

Comments

[ranch111]

A million bucks will most likely keep you from eating cat food.

[Alexis Hunt]

Very interesting read. Being wealthy means you get to enjoy different life experiences and afford whatever you want.

[freebird]

I think the answer depends upon your frame of reference. Does it matter which side of the border? And which border would that be?

Net worth percentiles for households worldwide have significantly lower dollar breakpoints than the US percentiles in your table. But if you include only your neighbors on the Upper East Side or in Palo Alto, you'll get a much higher set of numbers. In some US zip codes the annual 4% drawdown of a 1M nest egg would provide a comfortable living while in others it won't even cover rent.

What surprises me is the small differences in the thresholds between generations who are a couple of decades apart in age.

[Jim Robinson]

I disagree that $1,000,000 is enough to be wealthy. Using the slightly aggressive 4% withdrawal rate rule, having a $1,000,000 investment portfolio would let you live off of $40,000 a year. That's not bad by any shot but it's not wealthy in my opinion.

[Jim Robinson]

I disagree that $1,000,000 is enough to be wealthy. Using the slightly aggressive 4% withdrawal rate rule, having a $1,000,000 investment portfolio would let you live off of $40,000 a year. That's not bad by any shot but it's not wealthy in my opinion.