Anonymous wrote:Wealthy = when your kids will never really need to work. They still should, but it's not a necessity

This is incomplete. You should say: never need to work to live an opulent lifestyle.

Rich isn’t only about not needing to work. It’s about not needing to work to live a lavish lifestyle.
Plenty of retirees don’t need to work but live on a modest income. They aren’t rich. Same for the FIRE community. They don’t need to work but aren’t rich by any measure.

Wealthy = when your kids will never really need to work. They still should, but it's not a necessity

The notion that having a “network” means you’ll never have to earn your jobs is false.

As someone with an amazing network of wealthy people, the cardinal rules of remaining connected to wealthy people are a) never give them reason to think you’re interested in them for their wealth or position and b) you have to contribute something of value (either materially, or prestige, or expertise or actively using your own connections to help others) to maintain your place in the network. Wealthy people don’t tolerate freeloaders. You have to pull your weight to stay connected.

There’s also the practical reality that most of the people in your network may not be in your field and really don’t have the ability to “get you a job” at the level that keeps you wealthy.

Anonymous wrote:Rich is working at NPR or as an artist for the sheer sport of it, living off a trust, connected to other very wealthy people - no actually risk of ever being without a sport job or a real job with this network - and knowing that a $25M inheritance is on the way. I know more than one of these. Some of them do play-pretend that because they aren’t pulling in big law salaries, that they’re not rich beyond imagination. This is not a good look.

I knew one of these whose entire expected $ was tied up with Madoff. They died penniless and young.

Rich is working at NPR or as an artist for the sheer sport of it, living off a trust, connected to other very wealthy people - no actually risk of ever being without a sport job or a real job with this network - and knowing that a $25M inheritance is on the way. I know more than one of these. Some of them do play-pretend that because they aren’t pulling in big law salaries, that they’re not rich beyond imagination. This is not a good look.

AGI about $350k
Early 50s couple with adult children
Invested assets $7.6M
Real estate equity $850k

Rich or UMC?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For me, a net worth of at least 10 million is rich.
1-10 mil is UMC

This is ridiculous. If you have a net worth of greater than $600,000, you're in the top 20 percent of Americans. So obviously, if your net worth is more than $1 million, you cannot be described as middle class, no matter how you modify it.

Old thread but... Having a large net worth does not really say you are not living a middle class life style. Using the 4% safe withdrawal rate, if you have $2M, you should live on $80k. A nice income but still middle class. The big advantage, you don't need to work for money.

“If you have a million and live like a millionaire, you won’t have a million for very long.”

The 4% rule is outdated. If you have $2 million, take 5-6%! You'll get SS and probably have other dividend and interest income too.

Anonymous wrote:Rich is for sure based on net worth, but since net worth is not visible, that's confusing to most people.

I would consider myself UMC based on income but we're clearly rich based on NW. We live in the same single family home we bought 25 years ago; our cars are Hondas and Toyotas; our vacations are in line with our neighbors and friends. Kids went to public schools.

What is your NW?

Anonymous wrote:Rich is for sure based on net worth, but since net worth is not visible, that's confusing to most people.

I would consider myself UMC based on income but we're clearly rich based on NW. We live in the same single family home we bought 25 years ago; our cars are Hondas and Toyotas; our vacations are in line with our neighbors and friends. Kids went to public schools.

Focusing on net worth is misleading. There isn't one variable that defines rich. It is a combination of multiple variables.
Cash flow would even be a better measure than net worth.
Someone with a very high income and low net worth is still rich, for as long as that income keeps flowing.
Rich is not a permanent state. You can be rich, spend lavishly, squander your fortune and become poor.

Rich is for sure based on net worth, but since net worth is not visible, that's confusing to most people.

I would consider myself UMC based on income but we're clearly rich based on NW. We live in the same single family home we bought 25 years ago; our cars are Hondas and Toyotas; our vacations are in line with our neighbors and friends. Kids went to public schools.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For me, a net worth of at least 10 million is rich.
1-10 mil is UMC

This is ridiculous. If you have a net worth of greater than $600,000, you're in the top 20 percent of Americans. So obviously, if your net worth is more than $1 million, you cannot be described as middle class, no matter how you modify it.

Old thread but... Having a large net worth does not really say you are not living a middle class life style. Using the 4% safe withdrawal rate, if you have $2M, you should live on $80k. A nice income but still middle class. The big advantage, you don't need to work for money.

“If you have a million and live like a millionaire, you won’t have a million for very long.”

At an extreme, you may have tech company founders who are worth $1BN on paper, but they are only making $300k in annual salary. Some go on to turn that paper money into real money, and other turn that $1BN into zero. Then there is Elizabeth Holmes who turned $6BN into zero, and my understanding is she never really cashed out much at the top.

Anonymous wrote:

Anonymous wrote:For me, a net worth of at least 10 million is rich.
1-10 mil is UMC

This is ridiculous. If you have a net worth of greater than $600,000, you're in the top 20 percent of Americans. So obviously, if your net worth is more than $1 million, you cannot be described as middle class, no matter how you modify it.

Old thread but... Having a large net worth does not really say you are not living a middle class life style. Using the 4% safe withdrawal rate, if you have $2M, you should live on $80k. A nice income but still middle class. The big advantage, you don't need to work for money.

“If you have a million and live like a millionaire, you won’t have a million for very long.”

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You cannot just look at asssets unless they are upwards of $10M. Where it matters less and less whether one works or not depending on age. I think a 30 yr old with $10M and no salary is in a precarious position. Whereas a 45+ family not so much and if they are 60, then they are golden.

Would someone with $5M at age 50 and no salary for either DH or DW and two kids be considered wealthy? They believe in FIRE. Have dividend income but that’s it.

What about 50 yr olds with two kids and HHI of $150k (and a SAHM) and NW of $4M.

IMO, it’s a combination of HHI and assets. Also without age information, no point.

I agree, most people look at just HHI or just Net worth. It has to be a combination unless net worth is huge. Btw neither of the two examples you gave would be wealthy/rich in my books due to low or no HHI.

Ok we are 40 with a net worth of over 3 million cash and investments, excluding our house. We make ~ 700k. Where would you put us? I would say firmly UMC.

No, not firmly UMC, borderline UC. We are close to this but we don’t have the connections to make the UC jump. Plus we still need to work. Key in being UC!

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You cannot just look at asssets unless they are upwards of $10M. Where it matters less and less whether one works or not depending on age. I think a 30 yr old with $10M and no salary is in a precarious position. Whereas a 45+ family not so much and if they are 60, then they are golden.

Would someone with $5M at age 50 and no salary for either DH or DW and two kids be considered wealthy? They believe in FIRE. Have dividend income but that’s it.

What about 50 yr olds with two kids and HHI of $150k (and a SAHM) and NW of $4M.

IMO, it’s a combination of HHI and assets. Also without age information, no point.

I agree, most people look at just HHI or just Net worth. It has to be a combination unless net worth is huge. Btw neither of the two examples you gave would be wealthy/rich in my books due to low or no HHI.

Ok we are 40 with a net worth of over 3 million cash and investments, excluding our house. We make ~ 700k. Where would you put us? I would say firmly UMC.

Very rich!!!