How do you define "rich?"

My view is that if you need to keep working for someone else to maintain your current lifestyle, you aren't rich.

Yes - that includes the vast majority of investment banking professionals.

I’d say 2 houses in wealthy places (hamptons, Bay Area, Manhattan, vail, LA, Miami) paid off and a couple million in the bank.

I also like to use the test of the parents have a college-fund. If they don’t and are paying for private school, they are probably pretty wealthy.

being able to do whatever you want whenever you want all the time

How about a certain net worth? Do you guys have a set number?

Rich = you can live very comfortably off of investment income. That's what rich is to me. So this means you need to be generating somewhere in the neighborhood of $250k in investment income, which means about $5 million of liquid investment funds, conservatively assuming ~5% return. Assume you've paid for your house at that point. Adjust up depending on cost of living considerations, kids, etc.

Wealthy is a whole different story

EDIT: I forgot taxes, adjust up for taxes. My $250k figure is post-tax, so probably closer to $8 million in investment funds

Rich to me means ultra high net worth i.e. you can comfortably spunk away $1m+ a year on lifestyle and it wouldn't even make a dent in the growth of your portfolio. It also means, you can conceivably just have a recurring personal credit line to fund your lifestyle and not have to ever pay tax. This translates to about ~$30m+ net worth. Super rich is more family office territory at $100m+ net worth.

Being financially independent is different though, that's just when the passive income or liquidated capital gains (below the safe withdrawal rate) from your portfolio exceeds any reasonable expenses you need to fund your current (or anticipated if e.g. you want kids, want to get married etc) lifestyle. There are no extremely luxurious, crazy rich expenses here just standard expenses you'd expect depending on where in the professional/socio-economic ladder you currently fit into (excl. people who are already rich).

There are a few tiers of FI: lean (i.e. lower middle class lifestyles - i.e. $35-50k annual expenses), regular (i.e. middle middle class lifestyles - i.e. $50-100k expenses) and fat (i.e. upper middle class lifestyles - i.e. $100k+ expenses, could also argue for an obese category of $200-250k+ expenses)

Ask yourself if $10 is a lot of money?

My answer is, if everything you need and want is $9 total, you're rich; if everything you need is $11, you're not rich.

Add and subtract 0's as needed.

$10M+

[F U Money](

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Money is a resource. The resource is only as meaningful as your needs / wants. Without putting a dollar amount on it, because everyone's is different, being "rich" is about having the resources to do:

1; What you want 2. How you want 3. When you want 4. With whom you want

The last point is a big one, being able to spend your time with the people you love and enjoy vs. being forced to spend your time with fools and jerks.

I think rich and wealth are different things. Wealth is about actual dollars (quantity). Rich is about the relationship between your wealth and your life.

I think Gordon summed it up nicely: "I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing."

As a second question, what income level would you say defines each class? (lower, middle, upper middle, rich)

I've said this before--if you can publicly drop the N-word (in a negative way) in public (social media, TV, etc.) without it harming you materially financially then you are very likely rich. If I did such an act on Twitter I would lose my job and it would be difficult to pay my mortgage, to be frank, because I can't see myself getting re-hired by a notable employer. On the extreme end, if Mike Bloomberg did that today he'd still be unbelievably wealthy for basically forever.

Being Rich means you can eat McDonalds and still look like Angelina Jolie in the Matrix

If you get mad because your neighbor, Phil, just pulled a 911 off the lot then you’re not rich.

In the USA, we're all wealthy in the 21st century. At least in terms of historical standard of living purposes. The amount of abundance today is just extreme. Pretty amazing.

The amount to feel rich is relative. I see above some comments about breaking out each class by income. However, those numbers are dependent on where you are. SF and NYC, $100k is probably low class, but in most Texas major cities you live well on $100k. Take that $100k to Ruston, LA and you're living very well off. This is why a Federal minimum wage doesn't really help. Take it a step further. If you're able to make $100k remotely, and you're willing to move overseas, you can now go and be rich in a 2nd/3rd world country somewhere.

I live great off what I make in Texas, but I wouldn't go work in a place like SF or NYC unless I was offered at minimum 2x's what I make here; and I'm getting close to the top 5% US.

Throw in what it means to be rich to each person, and that further complicates things. Are your hobbies expensive? Are your tastes expensive? Or are you like my MD friend who has an awesome house, but is a homebody and spends very little day to day. Once he pays of the house, he's great and can feel rich on little! Me on the other hand. I have a regular cookie cutter house, but love to travel internationally, love sports cars, and I am more social in general. That means I have to continue to generate income, or a higher investment amount paying interest to feel rich and do those things.

Therefore, in my opinion this question cannot be answered with a number; everyone defines rich differently.

When passive income sustains an upper middle class lifestyle ($m+)

Everything is relative, but you are technically rich if you can live off the interest generated by your assets without touching them. You are extremely rich if you can live off the interest on the interest.

Total asset * (LIBOR + 3) = X, where X is an amount that can cover annual spending of you and your responsibilities (family, health, rent/house etc).

$100m net worth

The great Dom Mazzetti once said something along the lines of “the day you start lifting is the day you become forever small” - meaning of course, once you start lifting weights, you are forever chasing your pump

Using this framework, I think a parallel could be made between lifting weights and earning money. In other words, the day you start working and earning a paycheck, is the day you are forever poor (where “poor” really just means “not rich enough”)

Every time you hit a new net worth or annual earnings benchmark, you gain visibility to the NEXT level of wealth and it seems more attainable which is enticing. Granted, the marginal utility of a dollar decreases at a certain level, but I think this is idea is generally true for most of us that browse WSO

I grew up in a fairly affluent neighborhood but people were always competing for the perception of being "rich". What do I mean by this? Buying a C-class benz or 3-series and buying that LV clutch vs the handbag etc. This disillusioned me forsure. After college and legitimately having no money for food some weeks, rich to me is having financial freedom to not worry about not only basics like rent on my own place in nyc, memberships to various things etc, but things like going to places I want to for the weekend, buying things I like and not being denied any experiences with friends etc. Obviously this is within reason (ie not going to Wempe and splurging on a Patek) but the idea of not having to worry about "can I pay for this" is something I think is very valuable.

Edit: It is very important, especially in NYC to keep yourself grounded financially and not compare yourself to other people in terms of income or net worth. Especially in ny, you will always have people who are wealthier than you and someone wealthier than that guy. To you, rich should be something you define and push the boundaries on dependent on what you want or achieve, not something which is based on benchmarking everyone around you. This is tall advice forsure but its something I am working on and think that you guys could benefit from a headstart in this mentality. Comparing yourself to other's wealth can and likely will crush your sense of self-perception