How Rich is Rich?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am jaded because we are not rich but work with and live near rich people. I define "rich" as at least $20m in net worth—enough for a ski or beach house and a net jets account.

$20 million does not get you a net jets account. Sure if you want blow it, but not if you want to have it for your heirs.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:But is rich assets or income? I say income.

Rich is your income from assets. Not from labor.

Justin Timberlake disagrees.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am jaded because we are not rich but work with and live near rich people. I define "rich" as at least $20m in net worth—enough for a ski or beach house and a net jets account.

$20 million does not get you a net jets account. Sure if you want blow it, but not if you want to have it for your heirs.

With $20 million in net worth you could easily have a net jets card, even if you don’t go in for leasing or fractional ownership.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You are not rich. It’s all relative though. A $1.8 million house is middle class in my area.

That's not middle class. Grow up and understand what middle class is.

It's upper middle, so? It's still not rich. She can't live off this money not to mention live well. Money in your house equity (where you have to live) and in your retirement accounts is not accessible without penalties.

You can FIRE with less NW than OP, sure, but this means sacrifices and scrimping on lifestyle usually, esp. in HCOLA.
BUT
There is a point where there is enough wealth to have a nice home and even a second home, retirement savings and also have investment vehicles returning income you can live on, so that you do not rely on working. People can argue all day long how you can be working with 20 mil and have all of it buried in primary/second home and retirement accounts and I don't think it's quite realistic. Once you exceed a threshold of what a nice home in a good area costs you will not be likely upgrading endlessly to gobble up all your growing wealth (unless you are extremely stupid or won a lottery). Someone with 20 mil NW isn't going to buy 10-15 mil in RE to occupy themselves and have insane 401K, right? think. At some point your wealth spills into the active income producing investments and when it happens then you are truly financially independent but also comfortable and live well and can call yourself rich.

A 2 million dollar house is upper class.

Not in the suburbs inside the beltway.

$2M is $2M. The inside-the-beltway house might be under 5000 square feet but it's still upper class.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You are not rich. It’s all relative though. A $1.8 million house is middle class in my area.

My neighbors claim we live in the slums of Bethesda. The people in the 4-5 millions dollar homes look down on us in the 1.8 million dollar homes. They can tell from my GMC Yukon Denali and my Cadillac although looks good, are 13-14 years old and can tell a financial tragedy has taken place at my house.

this year I actually opened and closed my pool by myself and I started going to Jiffy Lube with Coupons. I also only get pizza on Potomac Pizza buy one get one days. I even iron my shirts now and then.

I’m rich ($8m nw). Change my car oil, make homemade pizza, wear wrinkled shirts…most are free T shirts. You have it much better than I.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am jaded because we are not rich but work with and live near rich people. I define "rich" as at least $20m in net worth—enough for a ski or beach house and a net jets account.

$20 million does not get you a net jets account. Sure if you want blow it, but not if you want to have it for your heirs.

With $20 million in net worth you could easily have a net jets card, even if you don’t go in for leasing or fractional ownership.

Most high net worth people don’t think of it as “spending money” given a lot of those assets aren’t liquid such as their homes. More important is their annual income from wages and investments. A light jet costs $6k+ an hour so you can blow through $100k in about 15 or so hours. That’s not a years worth of flying time, maybe three round trips. We fly private periodically and our net worth is well north of $20 million. We just have better use for our money.