Hello readers, this is a special series we’re doing where we answer some of the most interesting and frequently asked questions.
As always, the answers might not be exactly what you want to hear but we’ll be honest and somewhat to the point.
Here’s today’s topic — How Much Money You Need To Be “Rich”?
It’s complicated, but most people agree on —
$15 Million!
Let us dive into it —
This is a complicated question not because it’s hard to determine the amount of money you need to quote to be rich, but what exactly do you define as rich?
Ooohhh!!! Do you want to be in the 1%?
This might come as a shocker to you but you probably already are and don’t even know it.
In order to make it in the 1% highest earners in the world’s population, you need approximately:
- 30,250 €
- 35,000 $
- 2M ₹
- 223,000 ¥
That’s it!
Congratulations if you’re an accountant or a registered nurse, you’re probably in the top 1% of earners.
Luxury Lifestyle
What you really mean is you want to live the lifestyle you’ve seen in the movies. The big house, the sports car, the constant traveling and more…
That’s where the math gets complicated because you’ll have to account for the country you live in. How much tax do you pay? How many children do you have? How much property do you own?
Vs
How much liquidity do you have? Rich might even mean how healthy you are? Or how much of a stress-free life do you live?
The most simple way to look at it is:
If you’re earning 100 times the amount of the minimum wage, you’re most likely rich. That should be your benchmark. When it comes to your lifestyle, it doesn’t matter that you’re earning 100 times more if you’re spending it at the same rate.
If you stopped working or an unfortunate event made it impossible for you to generate new cash, you should be able to maintain your current lifestyle for at least one year.
Money Talk
Now, let’s get to the juicy part, let’s talk money.
Some people might say 1 million dollars is enough to be considered rich.
Well… in the developed countries that’s not actually the case. Having a net worth of 1 million dollars will put you in the upper-middle class in almost all prime countries in the world. Did you know that over 5% of the population in the United States is technically a millionaire? 5%!!!
The goal you should be shooting for is somewhere around the ballpark of 15 to 20 million. For most millionaires, 15 million dollars is enough for you to have more than a decent life. That’s when you qualify technically as super-rich.
With 15 million dollars, you should be able to live more than a decent lifestyle anywhere in the world.
Something interesting we’ve discovered recently is that there’s a bias to the amount of money people qualify as rich. For the poor and middle-class, the amount is way lower while the rich think it’s a lot higher.
A recent study showed that most rich people consider themselves rich only after they hit the 100 million dollar mark. Before that, they know they’re doing really well but they don’t see themselves as rich. It’s probably the appeal of the big 100 number and the idea that if you get it could take care of your lifestyle and that of your children for their remaining lives unless someone screws up big-time.
So there you have it fellas, 1 million dollars is upper-middle class.
15 million dollars is where everyone thinks rich is today, except the actual rich people who need to be in the nine-digit territory to feel safe.