When Does Your Salary Make You Wealthy?

So we all know the government considers you rich at 250k and we all know that depending on the demographic this may not hold true. So my question is how much of an yearly salary do YOU consider rich or wealthy?

*Ill go first. I would say that if you make over 300k as a single person and 500k as a household then you are wealthy regardless of where you live. I believe this amount affords you the 2 luxury cars up to a million dollar nice home and being able to spend,invest,and save pretty freely.

Agree or disagree?

if you make over 200k a year are your Rich?

While there is no official income level or net worth that makes you officially wealthy or rich - our users shared their thoughts on this topic:

APAE - Private Equity Partner:

Rich is easy to attain. Wealthy is not. There's a lot of subjectivity involved, but I'd simply say rich is making a large salary (mid to high six figures) while wealthy is being absolutely unconcerned with work because of what you're already worth.

Cornelius - Asset Management Executive Director:

Your not wealthy when you're working for your money. You're wealthy when your money is working for you.

Personal Net Worth and Being Rich

User @alexpasch shared that you can consider wealth based on the net worth of an individual.

alexpasch - Corporate Strategy Director:

Your salary (income) is only one of three factors that make you wealthy. Income * savings rate * growth rate of investments - debt = net worth

User @Situation, an investment banking analyst, shared that the label of wealthy or rich are based on where you live and your lifestyle.

Situation - Investment Banking Analyst:

This is a very subjective issue, and much of it is contingent on location.

My good friend's dad makes around 200k-300k per/year (depends on the economy and he works 8-4pm from home). They own a porshe turbo, lexus and beemer (all relatively new). Their house has an elevator, around 5,000 sq feet on the ocean with a dock, jet ski, and offshore fishing boat. They wear expensive clothing/accessories, vacation modestly, have a condo up north and he just retired (mid to late 50's).

An older friend of mine is an investment banker in NYC at a BB. Makes around 700k-1m. He lives in a 2000 sq foot apartment in meat packing. Has a used Mercedes in storage that he never has time to drive. He works long hours, always traveling, and rarely is afforded the time to travel to his condo in FL. He doesn't have time to have a healthy relationship either and is still single at 45. In summary, his lifestyle doesn't even compare to people I know in Florida that make 150k.

No matter your wealth, you need sufficient time to enjoy it and an environment that yields high utility. My friend from FL earns 1/3 of what the investment banker does, but has time to invest in real estate and live a much better lifestyle.

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Comments (48)

Mar 27, 2011

Disagree. Rich: $1 M/yr, wealthy: $10 M/yr min. You're not really wealthy until you have more digits in your bank than your phone number.

Mar 27, 2011

In the words of Chris Rock, wealth shouldnt be something you can loose in 6 months with a cocaine addiction. Wealthy to me is 50mm plus. If you invest smartly you should be able to live a very lavish lifestyle just of the interest alone.

Mar 27, 2011

$1.05

j/k a survey of people worth 1M and above (by fidelity) got a result of 7.5M (.5 extra eh?! Not .25 but .5...) per year.

    • 1
Mar 27, 2011

how can 500k be middle class? In 2 years that a mil in salary. So if you can save/invest 15 percent of that over 6-8 years youll have over a mil in the bank and 15 percent is conservative

I Got a dollar and a dream...

Best Response
Mar 27, 2011

ur not wealthy when you're working for your money. you're wealthy when your money is working for you.

I'm making it up as I go along.

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Mar 27, 2011
Cornelius:

ur not wealthy when you're working for your money. you're wealthy when your money is working for you.

Agreed.

Men are so simple and so much inclined to obey immediate needs that a deceiver will never lack victims for his deceptions.

-Niccolo Machiavelli

Mar 27, 2011

So its rich the better term?

I Got a dollar and a dream...

Mar 27, 2011
BankMonkey21:

So its rich the better term?

Rich is when you can kill a hooker and get away with it.

Mar 27, 2011
dukeofduke:
BankMonkey21:

So its rich the better term?

Rich is when you can kill a hooker and get away with it.

http://en.wikipedia.org/wiki/August_Busch_IV

fdba Emory Blaine and BBA or otherwise trying to find the perfect pseudonym.

Mar 27, 2011

Your salary (income) is only one of three factors that make you wealthy.

Income * savings rate * growth rate of investments = net worth

Too many people on this board will make a lot and blow it all on stupid shit...

Mar 27, 2011
alexpasch:

Your salary (income) is only one of three factors that make you wealthy.

Income * savings rate * growth rate of investments = net worth

Too many people on this board will make a lot and blow it all on stupid shit...

Minus debt, correct, hence "net?"

fdba Emory Blaine and BBA or otherwise trying to find the perfect pseudonym.

Mar 27, 2011

Rich is easy to attain. Wealthy is not. There's a lot of subjectivity involved, but I'd simply say rich is making a large salary (mid to high six figures) while wealthy is being absolutely unconcerned with work because of what you're already worth.

ur not wealthy when you're working for your money. you're wealthy when your money is working for you.

Pretty accurate.

Mar 27, 2011

About tree fiddy.

???

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Mar 27, 2011

Im into exotic cars so that would be my only major depreciating assets.i would have

I Got a dollar and a dream...

Mar 27, 2011

Depends on how much you spend

"Well, you can do whatever you want to us, but we're not going to sit here and listen to you badmouth the United States of America."

Mar 28, 2011
BankMonkey21:

So we all know the government considers you rich at 250k and we all know that depending on the demographic this may not hold true. So my question is how much of an yearly salary do YOU consider rich or wealthy?

*Ill go first. I would say that if you make over 300k as a single person and 500k as a household then you are wealthy regardless of where you live. I believe this amount affords you the 2 luxury cars up to a million dollar nice home and being able to spend,invest,and save pretty freely.

Agree or disagree?

I feel like wealth is more complex and subtle than that. Some people don't make much per year, but they've saved a lot and are worth a ton. Others make a high salary but still live paycheck to paycheck. Do you define wealthy has having an extravagant lifestyle or having a high net worth?

Mar 27, 2011

HNW, definitely.

Mar 29, 2011

This is a very subjective issue, and much of it is contingent on location.

My good friend's dad makes around 200k-300k per/year (depends on the economy and he works 8-4pm from home). They own a porshe turbo, lexus and beemer (all relatively new). Their house has an elevator, around 5,000 sq feet on the ocean with a dock, jet ski, and offshore fishing boat. They wear expensive clothing/accessories, vacation modestly, have a condo up north and he just retired (mid to late 50's).

An older friend of mine is an investment banker in NYC at a BB. Makes around 700k-1m. He lives in a 2000 sq foot apartment in meat packing. Has a used Mercedes in storage that he never has time to drive. He works long hours, always traveling, and rarely is afforded the time to travel to his condo in FL. He doesn't have time to have a healthy relationship either and is still single at 45. In summary, his lifestyle doesn't even compare to people I know in Florida that make 150k.

No matter your wealth, you need sufficient time to enjoy it and an environment that yields high utility. My friend from FL earns 1/3 of what the investment banker does, but has time to invest in real estate and live a much better lifestyle.

Ironically, I start working in IB in NYC this summer, but I am taking my money and going straight to FL as soon as possible...where I can actually be "rich" with a mid to high 6 figure salary.

    • 1
Mar 27, 2011
Situation:

This is a very subjective issue, and much of it is contingent on location.

My good friend's dad makes around 200k-300k per/year (depends on the economy and he works 8-4pm from home). They own a porshe turbo, lexus and beemer (all relatively new). Their house has an elevator, around 5,000 sq feet on the ocean with a dock, jet ski, and offshore fishing boat. They wear expensive clothing/accessories, vacation modestly, have a condo up north and he just retired (mid to late 50's).

An older friend of mine is an investment banker in NYC at a BB. Makes around 700k-1m. He lives in a 2000 sq foot apartment in meat packing. Has a used Mercedes in storage that he never has time to drive. He works long hours, always traveling, and rarely is afforded the time to travel to his condo in FL. He doesn't have time to have a healthy relationship either and is still single at 45. In summary, his lifestyle doesn't even compare to people I know in Florida that make 150k.

No matter your wealth, you need sufficient time to enjoy it and an environment that yields high utility. My friend from FL earns 1/3 of what the investment banker does, but has time to invest in real estate and live a much better lifestyle.

Ironically, I start working in IB in NYC this summer, but I am taking my money and going straight to FL as soon as possible...where I can actually be "rich" with a mid to high 6 figure salary.

Got debt? 5000 ft^2 waterfront home + cars + boat on 250K a year?

He must have or be:

a. Saved a lot of money or inherited wealth.
b. A great speculator or investor.
d. A shitload of debt - not an exclusive condition.

Just curious, what do you think the net and gross worth of your IB friend is?

fdba Emory Blaine and BBA or otherwise trying to find the perfect pseudonym.

Mar 29, 2011
Faustus:
Situation:

This is a very subjective issue, and much of it is contingent on location.

My good friend's dad makes around 200k-300k per/year (depends on the economy and he works 8-4pm from home). They own a porshe turbo, lexus and beemer (all relatively new). Their house has an elevator, around 5,000 sq feet on the ocean with a dock, jet ski, and offshore fishing boat. They wear expensive clothing/accessories, vacation modestly, have a condo up north and he just retired (mid to late 50's).

An older friend of mine is an investment banker in NYC at a BB. Makes around 700k-1m. He lives in a 2000 sq foot apartment in meat packing. Has a used Mercedes in storage that he never has time to drive. He works long hours, always traveling, and rarely is afforded the time to travel to his condo in FL. He doesn't have time to have a healthy relationship either and is still single at 45. In summary, his lifestyle doesn't even compare to people I know in Florida that make 150k.

No matter your wealth, you need sufficient time to enjoy it and an environment that yields high utility. My friend from FL earns 1/3 of what the investment banker does, but has time to invest in real estate and live a much better lifestyle.

Ironically, I start working in IB in NYC this summer, but I am taking my money and going straight to FL as soon as possible...where I can actually be "rich" with a mid to high 6 figure salary.

Got debt? 5000 ft^2 waterfront home on 250K a year? Someone either:
a. Made more money at one time or inherited wealth.
b. Is a badass speculator.
d. Has a whole shitload of debt - not an exclusive condition.

The home is worth more than he paid to build it (worth ~1.3M), despite the shitty market.
a. He never went to college and came zero wealth
b. Made some money, maybe 1M net, on flipping small water-front properties while the market was booming
c. He just retired. Has a investment portfolio between 1-2M to live off of, combined with SS, and company pension. Assume a 5-8% interest rate, that is 100-200k per year which I would assume is enough to cover their annual expenses.

Believe me, their lifestyle is not unusual in Florida in relation to their salary and net worth. If you do not reside in south FL, real estate is very cheap.

Apr 3, 2011

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Apr 4, 2011

If you are making over $300k there should be no reason you should have money problems. The key is to live below your means. I do however agree with many posts that say $300k isn't being wealthy. My opinion of wealth is having enough money so that your posterity don't ever have to work...

Apr 4, 2011

You are wealthy when you are comfortable with the amount of money you make, and/or don't worry about what something costs :P

Mar 28, 2011
BankMonkey21:

Ill go first. I would say that if you make over 300k as a single person and 500k as a household then you are wealthy regardless of where you live. I believe this amount affords you the 2 luxury cars up to a million dollar nice home and being able to spend,invest,and save pretty freely.

I was tempted to agree with this, but what if you make $300K a year, live in NYC, have $200K - $300K in student loans, pay close to 50% of your income in taxes, etc.?

Apr 9, 2011

You are wealthy when your salary is less than interest on your net worth.

Apr 9, 2011

so if i'm unemployed i'm wealthy. noiiceee

    • 1
Jul 17, 2012

Rich is $1Mill a month
Affluent is $1,Mil a year.
Wealthy is 250,000+

None are necessary to have a great, full life.

Mar 27, 2011
Aimez:

Rich is $1Mill a month
Affluent is $1,Mil a year.
Wealthy is 250,000+

None are necessary to have a great, full life.

You've got it all wrong. Rich is easily attainable. That would be a high monthly income, i.e. post-MBA PE or a couple years at a great hedge fund. Affluent is the comfortable yearly income, probably dual-income family. Wealthy is rare and often hereditary.

Jul 17, 2012
APAE:
Aimez:

Rich is $1Mill a month
Affluent is $1,Mil a year.
Wealthy is 250,000+

None are necessary to have a great, full life.

You've got it all wrong. Rich is easily attainable. That would be a high monthly income, i.e. post-MBA PE or a couple years at a great hedge fund. Affluent is the comfortable yearly income, probably dual-income family. Wealthy is rare and often hereditary.

I was actually thinking I had wealthy wrong. Wealthy is having investments that continue to create a high net value without active participation. I'll concede on that point.

But I'm happy with the figures for Rich and Affluent.

Mind you, in Australia have the highest median salary in the world, (Our average net wealth is second only to switzerland, at $397k) and one in sixteen Australians are millionaires, so we can't just say anyone who's earning our median salary ($220,000 - about 4 times america's) automatically qualifies as rich or affluent. That removes the exclusivity of it.

Jul 18, 2012

Wealth is a balance sheet item, not an income statement one. I think the most basic interpretation would be that wealth is the ability to continue a lifestyle indefinitely without an exogenous source of income. In a ZIRP environment, true wealth is much harder to attain than it was 5-10 years ago.

Jul 18, 2012

Everything is relative. So if your income is in the top 10 percentiles your rich adjusted for regional living costs

Jul 18, 2012

Rich means having enough money to support you for the rest of your own life. Wealth is something your great great grandchildren fight over in a trust fund long after you're dead. Ergo, $5M vs $500M.

Jul 18, 2012
BlackHat:

Rich means having enough money to support you for the rest of your own life. Wealth is something your great great grandchildren fight over in a trust fund long after you're dead. Ergo, $5M vs $500M.

This..but prob 200MM

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

Jul 18, 2012
Jul 17, 2012

DP

Mar 5, 2013

I make roughly $80k a year and work six months in a year. I consider my self wealthy because I have lots of free time to enjoy living. I own a used Beamer car and a new Beamer superbike. I also own my condo. I travel a few times a year and other events to enjoy the time. Shucks, I forgot to mention no debt. So salary is just a number and it doesn't bring you happiness. The goal is to live below your means and have no debt. It would be great to make six figures but I'm happy just where I am. I don't worry about losing much because I don't have much to lose.

I would die if I worked 80hr/weeks making over $300k because my health would detiorate and I would have no time for fun.

Mar 28, 2011
PoorNhappy:

I make roughly $80k a year and work six months in a year. I consider my self wealthy because I have lots of free time to enjoy living.

What do you do? This sounds like a dream job to me...

Mar 6, 2013
econ:
PoorNhappy:

I make roughly $80k a year and work six months in a year. I consider my self wealthy because I have lots of free time to enjoy living.

What do you do? This sounds like a dream job to me...

I'm not the guy you responded to, but there are plenty of jobs out there like that. I'm a marine engineer (by schooling, I now work for a big utility), and most of my friends who still sail make significantly more than $80k to work about half the year all told. This sort of life is a pretty good gig when you're in your 20s, but shipping out has probably destroyed more marriages than banking ever has.

Also, you typically have to, well, work. Screw that noise.

Mar 5, 2013

$2MM per year on a sustainable basis.

$15MM+ liquid net worth.

Mar 6, 2013

I don't think one can put a concrete number on this type of thing. The wealthiest people I've come across are those who minimize their costs and maximize their income streams. That sounds intuitive at heart, but in practice it can be more difficult to apply.

A lot of my friends think that the path to being rich (taking the dictionary definition which is: "Possessing great material wealth") is to take on a high-paying job with a salary that'll allow them to buy all the trinkets they want. And honestly, they're probably right. If you work in IB and do decently well, you can easily afford fancy cars, designer clothes, parties at hot nightclubs, etc. How much one will end up saving, despite having a lot of nice things, is an entirely different issue. Furthermore, I'm not sure a lot of them are truly "free" or independent. They're basically bound to their jobs in order to support their lifestyles and they either get screwed when that fancy job gets bounced, or they're so consumed by their work that their families enjoy the opulence more than they do.

However, to make the jump from wealthy, one needs to maximize ones revenue STREAMS AND lower costs. Reducing costs can be done in a variety of ways, such as living in a less expensive city with cheaper property (it's much, much easier to be "wealthy" in Texas than NYC due to CoL) and also by not making as many purchases. This money not spent on purchases is then invested, thereby having a doubling effect, so to speak. Not only are costs lower, but (if invested properly), the revenue stream continuously grows and diversifies making this person more liberated as well. They no longer have to rely on working 80+ hour weeks at an i-bank to make 500k+ and can instead take a less stressful job because their investments are raking in the dough for them as well.

This is also I think why posters on here are alluding to "wealth" being more of a generational/hereditary thing. Taking this approach can take decades to do, but typically pays dividends (no pun intended) for later generations after the wealth has been compounded over and over again and allows them to live off the interest accrued. In a way, I'd actually argue that rich can be quantified (on a case by case basis based on taste of course), but true wealth is more a behavioral/lifestyle issue than a concrete number one can reach.

Mar 6, 2013
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Mar 27, 2011
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I Got a dollar and a dream...