How Much Money Do You Need To Feel Wealthy?

How much money do you need to feel wealthy?

Last time, I asked – Can YOU become a millionaire? Incredibly, 95% of voters picked yes. That’s awesome, I love it! It really isn’t that hard to become a millionaire in the U.S. if you make at least a median household income of $60,000/year. You just have to commit to saving and you’ll get there. The point of the previous post was for you to pick yes. Unfortunately, a million dollars doesn’t go as far as it used to. Most people don’t even consider a million dollars wealthy anymore. So how much money do you need to feel wealthy? Let’s check it out.

*This post was originally written in 2013. I’ve updated and expanded it with the latest info. I hope you enjoy this one.

How much money do you need to feel wealthy?

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Wealth isn’t all about money

Of course, wealth isn’t all about money. Health, relationships, freedom, and happiness are all integral parts of wealth. Money won’t make you feel wealthy if you’re missing some of these. When asked about wealth in Charles Schwab’s 2018 Modern Wealth Index survey, two of the top three answers weren’t related to money.

wealth not all about money

Those things are more difficult to measure, though because they are all subjective. We all have different definitions of happiness. My happiness doesn’t necessarily match yours. In fact, I think the pursuit of happiness is misguided. We can’t measure those other things, so we’ll just focus on the money today. It’s way easier to figure out net worth than happiness.

When asked to focus on just the money, respondents said it takes $2.4 million to be considered wealthy.

I don’t feel wealthy

Really, $2.4 million? That seems a tad low to me. Our net worth is over that line and I don’t feel rich at all. The problem is the survey is meant to be representative of the US population. That means most of those surveyed are not millionaires. $2.4 million sounds like a lot of money to regular people, but millionaires don’t consider that wealthy.

Being wealthy is actually a moving target. It turns out most people need twice or more of their current net worth to feel wealthy. If someone is worth $5 million, they would say wealthy means $10 million. That’s pretty funny, isn’t it?

The 2x wealth corollary is pretty much spot on for me. When I wrote this in 2013, our net worth was about $1.5 million. I thought we’d feel wealthy when our net worth reaches $3 million. Today, I think $3 million is merely comfortable, not wealthy. As I said, it’s a moving target. However, I’m pretty sure I’ll feel wealthy when we hit $5 million…

UBS wealth study

To back up my $5 million = wealthy theory, here is a wealth study from UBS in 2013. It’s a bit older, but investors agreed that wealth isn’t just about having a certain amount of money. The majority of investors define wealth as having no financial constraints on what they do. But when asked to assign a dollar amount to be wealthy, they say it takes $5 million.

This study targeted investors so the results skewed a bit higher. Investors surveyed were older than 25 years old and have at least $250,000 in investable assets; half have at least $1 million in investable assets. This group is doing a lot better than the average American household.

do you feel rich wealthy

$5 million sounds just about right to me. I’m pretty sure we’ll feel wealthy when we reach the $5 million mark. We could conservatively withdraw 3% every year. That is $150,000 per year. It will be enough for us to live a very comfortable lifestyle. That’s way more than what we currently spend, about $50,000 per year. We’ll have plenty of margins with that kind of income.

Mrs. RB40 and I could stop working completely with that kind of money. I plan to keep blogging, though. I enjoy writing and interacting with readers. You need some goals to drive you forward or else life will be pretty boring.

Do you feel wealthy?

Okay, it’s your turn. Tell us how much money you need to feel wealthy? Would it take $3 million, $5 million, $10 million, or more? If it’s not an absolute value, think about what would make you feel wealthy. Maybe doing better than your neighbors?

 Sign up with Personal Capital to help keep track of your income and net worth. Personal Capital is geared toward investors and has many great tools. See my review of Personal Capital and how they helped me reduce my investment fees.


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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

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175 thoughts on “How Much Money Do You Need To Feel Wealthy?”

  1. I picked 10M. I am 37 and have about 2M right now, give or take, including my husband’s 150k in savings (if only he had saved as much as I had over the years!) To me, being wealthy = being able to pay for my child’s future and also support my sister and mother if they need help without worrying it will hurt my own financial stability. This can be for things that are fun, like paying for them to go on a vacation where they can spend time with my kids, or more serious, like paying for my mother’s care if she needs help later in life (she lives alone in another state.) I also think when I’m wealthy I’ll be able to do things like remodel my home and not worry about costs or ROI. I can enjoy more luxury items and experiences. I don’t know if I’ll ever get to 10M but it’s a good goal, I think. And, of course, 10M in 10 years isn’t actually equal 10M anymore. I do think at 5M, if I can get there in the next 10 years, I’ll be in a really good place and that’s a lot more realistic. But I don’t think I’ll feel “wealthy.”

  2. To be wealthy is to have one’s profit from investments
    firstly, exceed inflation
    and secondly, cover one’s expenses.

    More money than that is gravy.

  3. I have a net worth of $12.5m at age 34. Self made and started with nothing. It is difficult getting started but once you have some capital it is significantly easier to grow your net worth. If anyone wants a relatively low risk 12% return paid out monthly let me know.

  4. I am worth about 2mil USD. My goal was to get to $1mil by 40… I am 37 now. Obviously, I have surpassed that and moving onto the goal I originally thought impossible $10mil USD by 40. $10mil is the magic number for me. Although, I came from a VERY poor family so I already feel rich and extremely grateful.

    To me, financial wealth is having enough passive income generating assets, making about $200-500k USD after taxes without having to work at all (but I probably still would).

    I set another impossible goal for myself… $100mil by 55. As they say, it is much worse to set your goals low and settle than to set them high and surprise yourself.

  5. It felt like a card trick when your column touted both ‘double current investments’ and ‘$5M’. I’m what TMND would consider a ‘prodigious accumulator of wealth’ and save almost double my take home income (via stock and a DCP). In 22 years I’ve gone from having a slightly negative net worth to $4.5M, and assuming a normal return cycle will crack $5M in the next 12 months. I can’t argue that $5M should be considered wealthy (and chose that #), but I also chose $10M as the number I’d need to truly feel wealthy. We humans are complicated beings. 😉

  6. Thanks for your comment. My spouse and I have the exact same dollar amount goal in retirement but reached a different number.

    We are also both in our very early 50’s and we have a 14MM net worth now. No children. No debt. No mortgages. Majority in equity , fixed inocme, cash or cash equivalent. Some land holdings without structures. We rent in NYC surprisingly, but it works for us. We are aiming for 25 to 30MM before retiring in about 7 years with a goal of $360,000 post-tax per annum (in today’s dollars). Our current burn-rate is 700K pre-tax / 360K post-tax and we would like to remain in NYC and maintain our life-style. We do plan on buying a place in NYC the next 2 years. That would be a cash purchase. Around 3 1/2 MM is our budget.

    Factoring in inflation over the next 7 – 8 years I estimate we will need about $850,000 pre-tax in 2025 to generate the funds we need. For that, I feel we need a NW of 28MM (drawing 3% annually.) We currently earn 4MM a year and feel we can accomplish this within the time frame.

    Perhaps I am being overly conservative on the draw. I am also factoring in higher taxes in future, which I believe are inevitable as the US debt levels move higher. I am skeptical that a 4% draw will last the length of time we need. We both have longevity in our genes with many relations living into their late 90s.

    Interesting to see your thoughts being the same age and income goals.

  7. I’m not retired but I quit a stable job several years ago to focus on my online business. I quit simply because I honestly feel wealthy and I knew I was ready to leave my 9-5 job. It’s been a wild and crazy ride but no regrets. All I want now is for my kids to finish their College education.

  8. I’m 38 years old and have $1.6 MM in net worth. Compare to people whom I know and socialize with, I’m easily the most wealthy and have the most disposable income. So when I’m around them I would be considered wealthy.

    But if I was at an expensive neighborhood in California, I’d probably feel quite average, if not below average.

    Wealth is relative to those around you.

  9. It’s not money that makes you feel wealthy; it’s cash flow. You mentioned feeling wealthy if you had $5 million, in order to generate $150,000 to, “live a comfortable lifestyle.” That translates to $12,500 per month. If you had 25 rental doors clearing $500 each month, or 50 rental doors clearing $250 each, you could reach that same monthly total for MUCH less than $5M! (And, that’s just the cash flow. You’d also benefit from appreciation in the value of your properties, the depreciation tax benefit, loan principal paydown, and the inflation hedging effects on your mortgage balances. On top of that, you can raise the rents, write off all of your expenses, and invest in improvements to raise the value of the properties.)

    • I agree it’s cash flows what really makes someone feel confortable. Because he can spend them all and the next month his bank account will be refilled with fresh cash.
      Rents really are cash flow machines.

      Anyway 5M$ in S&P500 would hardly generate less than 40K$ in net dividends (after taxes), even after a typical recession with a -50%/-60% drop in price.
      Today the S&P500 DY is almost 2% gross.

  10. How much is enough? Not really sure with zero debt much less than many think. My wife and i both have pensions that offer access to insurance. We spend less than we currently receive monthly. At some point when our health fails us we may need to start using our savings to maintain our current standard of living. We stay busy at our local senior center pursuing low cost distractions. We exercise 5 days a week swimming laps at the local rec. center we have access to everything there for $329.00 per year. Our asset are far less than 5 million.

  11. What we need to feel wealthy has always been a moving target for us. We are now in our early 50’s, I’m recently retired and my wife loves her work and wants to continue until our 3rd child is off to college in a few years. When we first met with a financial planner 20+ years ago as newlyweds, the number we thought we needed was $3.6MM. 10 years ago, our updated goal was $8.5MM. As our wealth continued to grow so did our expectations and goals for what we wanted in retirement. We now have 2 homes that are worth about $3MM each and a beach condo that is worth about $1.3MM. Our total mortgage is $400k on the 3 properties and we also own 3 rental properties that are paid off that are worth about $900k. We plan on keeping one of the homes and the condo in retirement and possibly replacing the condo with a waterfront home that would be about $3.5MM. We now believe we will need about $360k per year after tax in retirement to support our retirement lifestyle with all the travel, our other hobbies(boating, skiing, golf, tennis), and things like weddings for our 3 kids. We are also planning on setting up 529k’s for our future grandchildren and would also like to donate at least $5MM to charity over the next 30 years. To do all of this, we need roughly $14MM in investable assets.

    • Thanks for sharing your point of view. You probably live pretty close to my college roommate. 😉
      He felt wealthy until he moved to a really nice house next to the golf course.
      You’re living it up and I think that’s great. Enjoy life while you’re still young and healthy.

  12. I have always hated questions like this. The problem is in the question, how much money does it take to “Feel” wealthy. The answer is always it depends because feelings are deeply personal. I am mid forties and almost retired with a little over a million net worth. If you ask me, I am okay in terms of wealth. If you ask my 24 year old son, he would said I am very wealthy. If you ask someone who is in their 40s, on welfare of some sort, then yes I am extremely wealthy. Reading the comments on here makes me wonder if the question is what is wealthy to RB40 readers.

    Not to poo-poo the article – just saying is that this is not a representive sample size to get a valid answer. Also you have to wonder what a person’s viewpoint of wealthy is. Is it country clubs, Mercedes and Caviar/Champagne meals or is it someone who just doesn’t have to worry about money?

    My answer to the question is simple, to live your life, however you want to, and not worry about money. That is wealth. And for that to occur you have to have self awareness of your budget, and your assets to know how it is working for you, not against you.

    • You’re right. This is highly subjective. Being wealthy for me is a pretty low bar. If we can eat out once in a while, don’t have to worry about paying the bills, and don’t have to work, then we’re almost there.
      I don’t have high aspirations like my neighbors. I don’t want to spend $10,000 to join a country club.

    • I agree with your definition. That said, it’s also a fun question. I read research that said how you’re doing in relation to your peer group (friends, relatives, neighbors) has an outsized affect on your perspective. If you make $500k/yr and live in a $2M home yet you’re in a neighborhood of CEOs earning double and living in more expensive homes, it supposedly affects you’re self-perception negatively. Conversely, if you make $100k and live in a $400k home amid $50k earners living in $200k homes, you feel like a king (or at least a duke).

      Either way, I believe you’re right. If I can do what I want without many reasonable restrictions, I’m where I want to be. Gratitude and a good perspective can take you far.

  13. I tend to agree about the “no financial restraints” requirement for feeling wealthy. That depends on location, lifestyle, spending habits, and priorities. I don’t know what that number would be for my situation. Because I’ve yet to add a second comma to my net worth, I can’t imagine feeling “wealthy” in the sense described from the UBS study anytime soon. $5m seems like a distinct “wealthy” threshold from where I’m standing now, but your moving target notion applies.

    By the time I reach $5m years from now, inflation would make that amount higher. One day I hope to consider myself “wealthy” in the financial sense.

    For the time being, I’m content with where my life is headed, the people I have around me, and the freedom and opportunities I have available to me. I’m wealthy in a non-financial sense of the word.

  14. I guess our current pay, country and age plays a big part in what number makes us feel wealthy. I live in NZ currently so $500k would be adequate, $1m comfortable and anything $2m+ wealthy. $1m would generate enough returns to cover my current pay and so my standard of living could be maintained. If I had kids, all my expectations would increase by $500K. Since I am in my 30s at present, single and travelling is more important than comfort, $500k is a good retirement point. 10 years on and maybe my older body would prefer a bit more comfort on travels so $1m would be adequate.
    On the other hand, if I returned to my country of birth, FIJI, $500k would be comfortable and $1m wealthy.

    • Really? I thought the cost of living in NZ is very high. Being single makes it a lot simpler. You definitely need more when you have a family. Fiji is also a pretty expensive country to visit. I guess it is cheaper for the local people. Thanks for your input.

      • Nz cost of living is high but in bigger cities. Sma?ler towns you can source a lot of local products directly n cheaply. I used to live in a smaller town and now I live in Auckland but my fortnightly budget has never gone above $600. There are ways to keep costs down.
        The same applies in fiji if you know where to look u can source good accommodation, food, etc at cheaper prices. Went to fiji earlier this year for 2 weeks and did not spend more than $1500 living at a hotel on the beach, travelling via bus n share cars, eating at smaller restaurants and haggling down prices on goods n services.

  15. $10M conservatively invested at 5% would generate $500K a year. Keep $270K of it invested to counter inflation, currently running at 2.7%, leaves $230K to spend and pay taxes. This happened to be my pay before I retired earlier this year, so $10M works for me.

      • I assumed achieving the wealthy feeling and staying feeling wealthy and not being “lottery winner wealthy”. If you start spending down savings, eventually the wealthy feeling may disappear. In real life I am planning to leave a substantial legacy to relatives/charity.

  16. I was thinking 5 million as well but you’re right, it is a moving target. Because 2 years ago, I said it was 3 million. What kind of a silly mental twilight zone is this…

    I don’t think $2.4 million is low though?! =) I thought the average American would say $1 million.

  17. I think a lot depends on age. As a 31 years old, I don’t think I would feel wealthy if I had 3 million, as that can go by fast if I were to stop working now. However 5 million I could make it past retirement somewhat comfortably. It all depends though how I feel in the future. Would I feel comfortable in a Corolla, or would I feel better in a Tesla? I like the 2x your expenses in passive income rule. That would give some room for more indulgences.

  18. We are wealthy right now because my husband and I are both not working and living off our investments. The amount we live on is MUCH less than many years that we made a much bigger salary. Of course there were higher taxes, savings, and the mortgages, but real wealth seems elusive.

    And yet, I clicked on twice our net worth! What is that about human psychology?

  19. $3 million in nest egg with a paid off home would feel wealthy to me. This is what I’m shooting for. But I have read about the conundrum of shifting the goal post when you actually get to that post. We will see. Hopefully, even if I don’t reach that number, I will still be content and feel wealthy.

  20. we had about 60k in take home pay a few years after investing. i felt wealthy at that level of funding our life. that’s not salary, just what we might have spent. we probably spent closer to 50k but it got us everything we wanted/needed. i really feel wealthy right now with nowhere near that spendable money.

  21. Money is a moving target, and it’s probably never enough. 10 years ago, I thought I would be very happy if my wealth reaches $X. Now I have reached almost $1.5X, I’m still dreaming about more money. Guess I’m too greedy.

  22. For us, I would say about $4M with no mortgage, no kid’s expenses (grown up and moved out), and good health. We are spending around $70K a year but that includes a mortgage and a private school tuition. If we take 3% withdrawal rate of $4M a year, that’s $10K a month to live on. I would say that’s pretty good.

  23. How much money do you need to feel wealthy?


    I would say about $200 Billion (that is, BILLION!). That is a nice round number.
    That way I can afford to maybe buy a few islands each year, or even take over an entire (albeit small) country from time to time.

  24. When I first started seriously thinking about FIRE I envisioned I needed to get a nest egg in the $5 million range (exclusive of home). That was before I was debt free etc. Now that I am completely debt free I feel that I do not need to go for as lofty a goal (I still may well achieve it but that number is no longer my driving force).

    Studies have shown that maximum happiness occurs with a salary of $90k/yr. Personally I am shooting for a nest egg that can support a $125k/yr lifestyle (trying to build my passive income stream to this level so I don’t feel the need to consume capital and then have a legacy to give to my daughter, etc).

      • Thanks Joe. Yeah that number is almost hit if you include my retirement accounts dividends, etc. If I can get my non-retirement accounts to that level of passive income I would probably jump ship right now (as of my current master plan, I am shooting for 53 to coincide with my daughter going to college). Most likely going to do a glide path transition (hopefully starting next year) by continuing to decrease clinical hours (possibility of adding a partner to my practice since right now it is manned by 2 radiologists, adding a 3rd would help a ton (and the financial impact though big won’t be too problematic since me and my partner are pretty near FI).

      • My wife and I are in our 50s. We have approximately $2 mill in investments and own a $400K home. As others have stated, our “rich” number keeps going up as time goes by. For years before we had a pot to pee in, we thought 1 mill would do it. Now at 2 mill its not even close to our comfortable to retire level. We have approximately 10 years of work left and want to live comfortably til death. I’m hoping we reach $5 mill by then, which I believe, will set us up for a worry free prosperous retirement. Time will tell. Let’s hope the stock market continues on this upward path. Cheers.

  25. Wealth is relative–just like poverty. You ask a person making $200K in a neighbourhood making $1 million a year and they will feel poor. But ask person making $70K in a neighbourhood making $30K/year and they will feel rich.

    Like you said, the goal post keeps moving if you’re comparing yourself to other people. At a certain point, there’s a diminishing returns effect, where more money doesn’t add more happiness or security. It actually causes stress.

    I also think it depends on what you spend the money on. If you spend it on things, you’ll never feel rich because it’s a temporary high. As long as I have enough money to cover my needs, make my own choices, and allows me to say exactly what I’m thinking without selling out, I’m happy.

    • I’m not sure if it’s relative like that. I’m pretty sure I’ll still feel rich even if I live in a rich neighborhood. Heh heh, that reminds me of the conversation we had at soccer practice yesterday. A group of parents were talking about the exclusive athletic club in town. Quite a few of them just joined. The initiation fee is over $10,000 and the monthly fee is around $300. Yikes! I just ignore them. 🙂

  26. Considering the fact that I live in a low cost country (Romania) Having paid Off houses, cars , no debt , mortgage , leasing makes me feel quite comfortable. Is pretty hard here to even be worth 200k-300k USD since a house is ussualy around 70k-150k And if You are a wage earner, salaries are not big enough to save consistent amounts of money, which is why most people can’t even afford Paying Cash for homes or cars. I luckily Inherited 4 commercial properties And around 4 residential properties which are mostly rented so having to work is not necessary , also, most Romanians Earn annualy between 5k to 20k USD (judges, doctors , programmers are the professions that are somewhat making You able of a comfortable almost luxury life ) I’m feeling more than fine earning around 80k USD annually (not a big deal for US or UK but can be equivalent to 160k + , as in You afford multiple interna?ional holidays, no need to work, basically Any type of car except Bugatti , Mclaren, let’s say cars around 60k wouldn’t be a headache) . My net worth is around 2.5 million USD (still trying to keep investing And reach 3 million that’s my goal right Now) . Even though properties are way cheaper than in developed countries ( an apartment here is around 60k USD instead of 150k plus or so ) they are still good passive income sources can help one be financially secure no matter where on earth they live.

    • Thank you for sharing. I think it’s great that you are doing so well. We’ll try to visit Romania and other eastern European countries in 2021.
      It sounds like you’re doing very well there.

  27. Another vote for $5 million. At a 3% withdrawal rate, that would be $150K of income per year. Certainly enough to travel to nice places, learn new skills, spend time with your family, pay for healthcare, invest in real estate, start a side business, and give money to causes you care about. What more could you want?

  28. When I made my 1st million at 32, I felt pretty well off. Then when I crossed the $5 million mark, I felt I needed $10 million to feel worry-free. I made it to $8.3 million before the financial crisis aftermath knocked me back down to $5 million. Today I am at $11 million and I feel I need $20 million to feel well off.
    It might have to do with the fact that I sold start-up stock too early to buy a house and also to diversify into other assets. If I had kept all my shares, they would be worth $150 million (pre-tax) now.
    It’s all relative, ya? And from my experience, it’s a moving target.

  29. $5m seems like chicken feed – I retired at 40 with $5m. If you decide to travel the world, have 3 homes in 2 different continents and private schooling, fancy lifestyle with 2 different business run by management and $1m in savings – $5m is chicken feed…. Key is to keep working hard and take a break when you feel like ….that what $ are made for, otherwise you’ll always feel inadequate.

  30. Contrary to what financial company’s spew. A net worth of 3 million is double the amount of USD’s to be considered wealthy if your living within your means in a way that continues to increase or maintain that amount of net worth year to year.

    An yes I am a genius.

  31. This is all really interesting. I think what you consider to be wealthy is a lot to do with how much money you had growing up. For me, I’m only 17 but growing up I considered myself to be wealthy until my parents divorced and the money was split up. Now my parents are much less willing to take my brother and I on expensive vacations like we used to. My dad still has about 8 mil but for some reason, it seems less because we used to have so much more when the money was together.

  32. I made $2M from a transaction in my mid 30s. I didn’t have much before that. I bought a house and an investment property. I don’t have any debt, and have solid savings. I spoilt myself a little with a few trips overseas (one business class) and also helped the family out as well.

    Despite this, I am no where near not being able to keep on working. I’d say I would need another $2 – $3m to not have to work again. Let me tell you, making that $2m took 4 years of hard work, so I’m not sure where this next trisection is coming from.

    $2M makes you comftorble, but I don’t feel rich and still need to think before I buy.

  33. I think what you’ve hit on is that “rich” is always a bit more that you already have. The comments here seem to point to $3-$5M as the right number. I’d agree, that if I were older (I am 52, and SWMBO is 59) that when we add in the social security numbers, $3M is more than enough.
    In 10 years, when I am 62 and SWMBO is 70, we are looking at $85K/yr in social security benefits. This is a huge number no matter how you do the math. It’s the equivalent of $1.5M giving off 4% after 10 years of 3% inflation. It’s a tough thing to retire early while planning for the windfall or failure of social security.

  34. You need an investment strategy, that works in annuities to cover fixed costs, a simple spreadsheet calculation. Once these are covered, you can then move to higher risk, but still with a focus on lower tax dividend payments. Premium on safety, but in Canada the Banks pay 4/5 percent. The goal is tax efficient income. 5 million dollars under the right structure is rich.

  35. As a finance professor at a tier 1 research university, I was perusing pages and found this both interesting & amusing. Joe, looks like you’re doing a pretty good job, but then some of your commenters had me in stitches. I think half of them are kids or “wannabees” posting for giggles. I always warn my students (both undergrads and MBAs) to beware of what they read online as so much of it is fluff and/or misinformation. E.g., on the recent post by Mr. Garcia who purports to have retired with “only” a million dollars from working at Apple, and who claims to live off the dividend income — the math simply doesn’t add up. Even living in Roseville would require more than $2300/month for a family of three, especially with real estate taxes and other home expenses. Moreover, Apple only pays around $2/yr DPS, so to generate his claimed $28,000 per year would require 14,000 shares — worth about $1.75m at today’s price. Worse, as any (and I mean ANY) financial advisor or money-manager will point out, it’s a really BAD idea to have all your money in one stock, “even” Apple. Regardless, I enjoyed your blog and just had to comment. To the posers (I mean posters), thanks for the laughs!
    – Dr. P

    • You’re not the only head scratcher Dr. P. Many FIRE blog posts strike me as exaggerated, whether unusually high incomes or net worths, or unrealistically low living expenses. Poor folks may live on very little, but hard to believe anyone would willingly choose such a deficient and precarious lifestyle, extreme early retirement notwithstanding.

  36. I retired at 54 after having made only 1 million dollars working at Apple. The trick for me was to buy a house outside the bay area in Roseville. I bought it with cash, now I only need about 28k per year to live with my wife and school aged child. My family is 100% debt free, not even any credit card debt. I live from dividends on mainly AAPL which is still increasing its dividend year over year. And my stocks and funds are increasing in value all the time, so I’m actually accumulating more wealth as time goes on. In 7 years I will get social security which will be great to blow on travel and entertainment. My wife works to keep busy but doesn’t even need to work. The only thing I miss is being able to drive to Santa Cruz in 40 minutes from Cupertino. But I only did that about four or five times a years anyways. Now, I’m much closer to the Sierras for summer and winter recreation and the schools in Roseville are outstanding for my 12 year old.

  37. I am currently 29 y/o with a net worth of about 2 million. The good thing is that it is growing at a rate of 10 % or so compounded every year and so by the time I will be 50 , I will be a multi-millionaire even if me and my wife do not save a penny in the future. Theoretically, me and my wife could stop working but what would we do ?. Also, we both are in Medical residency right now and would earn probably close to 450,000$ or so annually once done. No med school debts also make it easier to save. The key I think is compound interest. They don’t call it the 9th wonder of the world for no reason..!!

  38. I am 34, and almost have $5,000,000 saved up. About 1/3 is in home equity, the rest in mutual funds. I moved out at 19, and received no assistance from parents after that, so all the money was self-earned. I’m not writing this to brag; I’m writing it so we can explore what someone would really do once they earn this kind of money.

    Right now, I still have my business. I feel like my business may not be around forever, so I am working about 50+ hours per week now so I can make as much money as possible. I used to tell myself that I’d quit working and move to Costa Rica as soon as I hit 1 million, but the money kept coming and doors kept opening, so I kept working.

    At this point, here are the options I see for myself. I’m not sure which to choose:

    1) Try to earn significantly more, buy a 2nd & 3rd home, fly private jets, etc.
    2) Stop working and delegate all responsibility of my business to managers. Cut back on spending, just in-case they run the business into the ground.
    3) Try to travel a lot and telecommute to control the business. This is supposed to be a “best of both worlds” option, if done correctly. If done incorrectly, it will mean my cell-phone will be ringing when I’m trying to snow ski.

    I’ve been married about 12 years, and we have no kids. If I stopped working so much, I might invest that time into a child instead.

    Would love to hear your thoughts on what you’d do in my situation.

    • Congratulation! That’s a huge milestone. I think the main question to ask is – are you enjoying running your business? If you like it, then you probably should keep doing it. If it’s not much fun anymore, then maybe you can try something else. How about selling your business and try a smaller operation that you can run while traveling?

      Good luck!

      • I like your logic, thank you.

        Regarding selling/enjoying: I don’t know what I’d do if I wasn’t working, I’d probably exercise more, but I’d also start to feel unproductive and make hobby businesses.

        I think my best bet right now is to work on what I like and not worry too much about the day-to-day of the business. That’s what I’ve been trying to do.

        Does anybody stop working and actually enjoy it? I’m afraid I’d feel really really lazy if I did that. What do you fill your day with?

        • I’m really busy with the kid and my blogs. You really need to find something to do when you leave your main job at such a young age. I know some people who left their job and they are all working in some capacity. You just need to find something you enjoy. A hobby business is one great way to do it. At this age, it’s not good to stop working completely.
          Good luck!

  39. It’s strange to me why someone who’s been leading a frugal life for most of their adult life feels as though they need 3 to 5 million dollars. I would think it would be very difficult to change one’s spending habits once you reach that mark. Does anyone really need that sort of sense of security? If not, then constantly saving and leading a frugal life to enjoy the money at an old age doesn’t make much sense to me either.

    In your case your annual expenses are roughly $50k, but you feel you need $3 mil? If you had $3mil, would you double or triple your expenses?

  40. I’m 35 and have $2.4 million invested in real estate, including commercial retail. The rental income from my portfolio generates approximately $134,000 per annum after taxes. To help combact inflation because I’m still reasonably young, I reinvest half the income back into real estate, so effectively I’m left with $67,000 per annum. I now live in Thailand where the cost of living is roughly 50% cheaper. Not having to work sounds like a great idea, but there are days I get bored (there’s only so much golf you can play, let’s face it).

  41. I have $1 million in my 401k, $150k in a different retirement account and $600k in liquid assets. My $175k 1 bedroom apt is paid off and i would net $650 k after taxes if I sold my business tomorrow.

    If i was single i could retire but my girlfriend who lives an a big house in Long island has different ideas about how to live.

    I do not feel wealthy. I would say i am comfortable but i still have to work.

    • Maybe when you hit the $5 million mark? 🙂 Good luck! Sounds like it’s going to be tough with your girlfriend because she has high expectation.

  42. I love these type of discussions. I have done fairly well in savings in my life despite basically starting from scratch after divorce 16 years back at age 35. As a high income earner as well as an aggresive saver and investor. I have managed to save to about 12 Mill (house 800K the rest in investments and cash) . My kids are done university and are self sufficient.I am not rich. I am well off, and could retire comfortably. However a huge downturn in the stock market couldknock me down abit. However at 51 I am too young to retire I am a physician specialist. However in a few years will likely retire, to volunteer, and travel the world. I feel I would have more than $450K a year after tax indexed to inflation without touching capital for ever. Since I currently live on less than $150K a year this is way more than I would need.

  43. First post here. It seems that most of the posts here seem to coalesce on the basic math that, for those in their late 30s, 40s, and early 50s, $3M is a magic number that allows you to earn a decent “salary” without working of $50-$100k/year (a wide range, I know) depending on how conservative your investments are. Under the 3% rule, or by owning real estate or similar investments, that $50-100K/year should be inflation adjusted. And most of us, it seems, are counting on SS as “gravy” if and when we get it.

    On that basis, it seems that $3M does not feel wealthy, but would be quite comfortable as it produces an upper middle class income. It is hard to think of oneself as being wealthy with those numbers and an early retirement goal. On a superficial level, the wife and I know we are wealthy since we are maybe 3 years from that goal and are in our mid 40s ($2.7m including primary residence, no kids except one 20+ yo son out of the house). But since we’ve worked all our lives for this, have never spoiled ourselves, and don’t come from wealth, it is hard to think of that money as wealth as opposed to our retirement nest egg (no pension for us, possibly no SS if not solvent by then).

    If we get to a potential goal of $4M by age 51-52 and then retire, I may feel wealthy. I don’t now because, as mentioned, I don’t see the $2.7M as disposable. I do think that if we had $3M at age 70, we’d feel wealthy for sure. So there are a lot of variables.

    I also agree with a lot of posters, that, at some dollar amount and whatever age you are, there is a shift toward feeling wealthy. For me, I do think that having $5M now, even with an early retirement goal of 50-52, would definitely do it. Perhaps not Paris Hilton wealthy, but still wealthy when one crunches all the numbers.

    I find this a fascinating question, not only for the math, but for the psychology of what feeling wealthy means. If I get to $3M at age 50 and then retire, it’s not like I’m going to get the presidential suite in a 5 star hotel, buy that ski chalet in Telluride, or Gstad, or even travel without a pretty tight budget. Unless we greatly exceed our retirement goals, I don’t think a lot of us will ever truly know what being wealthy really means. In that regard, it is probably more worthwhile focusing on getting to a point where we can enjoy the things we like to do, and thus feel “wealthy” in a more existential sense.

    • Update. After some ups and downs, we are 3.3m NW. My “number” is now $4m. This is a high COL area, though, where houses in nice areas are $800k to $2.5M. Ours is about 900k. So investable assets of about $3M is our target, with $10k/month as a goal until SS kicks in, then $12k/mo. Pre-tax. For not going into the office every day, $120k/year seems pretty good.

      Anyone else find that $10k/m pre tax (75% in real estate and 25% in equities) in a reasonably high COLA (midatlantic, not NY or NJ) is enough for a couple? It helps to know if $10k/m is a realistic spend. Thanks.

  44. Live in Florida in house worth $2m and have $3.5m in investments making about $100k per year. No debt but two teenagers at school. Earn about $100k investment income after taxes. Mid 40’s and have 2-3 international vacations/cruises per year. Do I feel rich, NO but comfortable. I agree that you feel you need to have double your net worth

  45. I am almost 39 years olg. My net worth is about 3 million but I am by no means wealthy. I own a house worth 750k in a suburb wherein the average house price is about 1.3 mil. I own an office worth about 250k in which I work. I have about 2 mil in liquid assets: cash, shares, bonds, etc.

    However, I consider that I am not wealthy because I still need to work. The 2 million at a three percent yield gives 60k a year, hardly enough to live on. I think I need at least 3 mil in income producing assets before I can leave work and hence feel wealthy.

    • So I feel we will make it in retirement. I am 64, we have $1M in an IRA, $250k in savings, and a home worth about $250k. We owe very little debt, and have a recent Corolla and Escape. We have cut down on our spending in the last few years, and after being laid off 2 years ago am still making about half of what I was making. We can easily live off it. SS payments will be $2500/month at my age 66 and the spousal benefit will be $1250 at m age 68. We can almost live off of that. We are thinking of buying a small $200k vacation home (no condos ever again). I will never feel rich while the Country is run by the types of Morons we have had in the last 20 years.

  46. Wow your question really is relative to the individual.
    I could be FI in about 5 years but does this mean im wealthy?

    By definition I could be retired by 33 so one would expect so.
    But the truth is my low salary(extremly low by american standards) and an 80-85% savings rate would mean a retirement life of equally financial discipline to which im not ready to commit at that point.

    So while im FI by year 5 ,I want to accumulate enough wealth to go on at least 13 years after that to build up a work pension which together with social security is meant to combat inflation.

    This also means I would have more flexibility to choose to travel some and spend on stuff that matters to me.

    While financial independence can be reached at lightening speed by an 85% savings rate I doubt most low income earners would wish to do so to Retire Early by itself.

  47. Real inflation = 4%
    High risk corporate bonds = 6%
    Real rate of return = 2%

    $1,000,000 = $20,000 / year dividend income
    $3,000,000 = $60,000 /year
    $5,000,000 = $100,000 / year
    $10,000,000 = $200,000 / year

    You need $10M to actually be wealthy enough that your income is higher than wage earners.

    For typical middle class to retire securely (don’t cut into principal and keep up with inflation)
    $1,500,000 net worth is the minimum….
    $500,000 in stocks (4% real return)
    $500,000 in bonds (2% real return)
    AND have the house paid off. ($500,000 for a decent house in safe neighborhood near a city)

    Most people forget that you need $100,000 set aside for house repairs, real estate taxes, etc. For most people social security will pay for real estate taxes, medicare premiums, and taxes on interest/dividend. That’s it!

    • I think this is a pretty good analysis, except for a few things. First, I don’t think we are experiencing 4% real inflation. Some goods are going up more, some are going up less, but I think we are closer to 2%-3%, with instances of declines, much due to technology.

      I also think with just a bit of work, you can do much better on your equities. I know personally investing in things like MLP’s (or better, GP’s, like WMB), other strong dividend growers has been yielding far better returns, well north of 8% real annualised. Maybe it won’t always be this way, but there is some fantastic organic growth to invest in out there, don’t let the media fool you. (Bad news sells papers, good news, not so much).

      With respect to wealth and when is it ‘rich’, I agree with many posters that it is when you no longer have to think about money in the context of allocating consumption decisions, within reason. I passed $10M in liquid assets on the odometer a few years back and basically the main difference is that while my budget has gone up a bit, for the mostpart, I am now a perpetual saver, the interest/appreciation on investments is starting to compound. To me, this is when you start feeling wealthy. I also believe past about $5-$6M of liquid investible assets, you really start seeing a marginal utility to monetary wealth. Expenses for the next level of service or good start going logarithmic. Private jets for example, even at $10M-$15M of liquid assets, it’s really not enough, you would feel uncomfortable. But you do move to business class 100% of the time, which oddly, is not that expensive in relative terms (or particularly for how much better the experience is, especially on long-haul flights). And by now, most people know that a larger-than-needed home has negative utility–more upkeep, feels and looks lonely, very high carrying cost in taxes, etc and more illiquid. Kind of a fools errand, high end property.

      The best ‘change’ is simply the removal of any pressure from working that comes from ‘having’ to be there. You really feel different about your career, free to make even riskier, more enjoyable or fulfilling choices. A year off for charity work doesn’t look crazy.

      In a way, the money can create a bit of additional stress…’am I getting the most out of it’? ‘is it truly safe in different scenarios’? You will also find that it becomes harder to be ‘normal’, again, not a ‘problem’ just oddly a tiny bit isolating.

  48. Most people want to be average…basically middle class which takes about $70 pretax income for a family of 4
    $20k income taxes (federal, state, social security, medicare, sales)
    $20k house + related expenses (utilities)
    $7k food
    $10k healthcare
    $5k car for 2 + related expenses
    $1k vacation
    $7k kid related expenses until they are 18 (daycare, extracurriculars, college savings, etc.)

    $70k pretax given today’s ZIRP environment would take $3,500,000 in all in high risk non-investment grade bonds with 6% annual return.
    Real inflation is 4%, so real return is 2%.

    So folks, you need 3.5 million dollars in HIGH RISK investments to keep up with a very average middle class living standard.

    1 million in the bank gives you ….$20,000 / year in real returns.

    Factor in inflation, taxes, and risk, those who think million dollar is a lot are delusional. Even in third world countries, million isn’t much because real estate in big cities are sky rocketing. Yes, America…you are poor. Russia has more millionares than Europe, China has more millionares than USA.

  49. Ha reading some of these comments is ridiculous. I think most of those people in the US, would be content with just 1 million. It all depends how it’s invested, what it’s generating on an annual basis and how smart you are about frugality. If it’s all tied in real estate and not really providing income then yes they will not feel rich, but if it is in high yielding bonds and dividend stocks, earning 50-75K annually, then that is a good way to feel rich. Maybe I’m being modest, but for me rich is 1 million and wealthy is anything over 2.5 million.

      • This income level may work for people already in their 60s, but I don’t know about this for people still working and want to retire early.

        When you’re talking about early retirement, sure 75k seems doable today. But, let’s fast-forward 25 years and take into account even a modest inflation number. 75k per year may just barely keep food on the table, the car running, and the house heated. Oh, and now you’re in your 60s so health care costs rear their ugly head. What’s that you say? You’re country has health care? But, that was 25 years ago, practically ancient history when the government could afford these programs. Even the co-pays may be enormously expensive in 25 years.

        The more I think about it, the more I feel that any early retiree needs to have a way of growing their passive income even after pulling the plug. If your current income does not allow you to invest significantly, it seems likely you’ll end up in trouble and when you are least able to deal with it.

        I still stand by my 10k / month passive income. But, of course more is better. 🙂

  50. I would say $5 million would be a decent amount. Not super-rich but one could comfortably afford a decent lifestyle on that buck. It could be a good amount if you are looking to at least be semi-independent and have money left over for whatever else you wanted to do.

  51. Couple of things help equate to wealthy from my perspective.
    1. Finally reaching 55 to take an early retirement pension. At 2K per month, not huge, but it’s 2K per month forever starting now. Combined with $1.5 million savings and whatever ss at 62, we’ll have a tidy monthly income.
    2. We have absolutely no debt and I have a spouse that supports a great plan of spending wisely to afford more travel. Newer cars and a no-mortgage home in fantastic mechanical and cosmetic shape help round out a great financial situation.
    3. Great health, happiness and a joy of life. Do we need $5 million? I’d take it, but am not striving for it. But our savings continue to grow, so may reach $2 million.

    • Congratulation! I hope we’ll be where you are at 55. That’s a great achievement.
      Mrs. RB40 will be eligible for a pension if she sticks with her job that long, but I’m not sure if she will.

  52. Based on that definition I also feel wealthy. I don’t feel constrained in spending at all, but I also know that I will have to continue to work… so for me, being wealthy or feeling wealthy is if I never have to work again. Ever. Even with all my spending.

  53. Based on the definition, I feel very wealthy. Normally rich and wealthy is not terms I would apply to myself. I still feel it is someone else. I expect the first obstacle will be switching from a lifelong saver to a spender. I just do not know if that is possible.

    • Going to be difficult to go to a spender from a saver. We have saved almost 5 million dollars and I will turn fifty next year. I believe if I see my net worth grow even 10,000.00 per year after I quit working it may ease the pain of spending, just a thought

  54. I have modest desires. I only want 1.5 times my current household net worth before I’ll feel rich. Enough to retire early, indefinitely, and no more.

  55. I would not say I feel ‘wealthy,’ though statistically in comparison the rest of the world’s population we likely are doing very well.

    I’m intrigued by the statement “No financial constraints on activities.” I’d point out that there are at least two ways to achieve this status. 1) Have a very high net worth, or 2) understand that a happy, satisfying life is largely independent of owning costly stuff and doing costly stuff.

    I have on my wall a motto a sister-in-law did for me in needlepoint. It reads “He who lives content with little possesses everything.” And to quote from my favorite financial adviser, Henry David Thoreau: “Our life is frittered away by detail. Simplify, simplify, simplify! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumb-nail.”

  56. I don’t think a dollar value is the right way to look at this. I think it’s more of how many dollars you need per month to pay your expenses and make your time your own to do anything you want. (compared to working wage)

    For example if you get enough in dividends + rental properties etc. per month to give you say $4000.00 a month, maybe that’s your goal? As an example -Your portfolio value may fluctuate between $800,000 to $1.2 mil. – who cares if you get your $4000.00 a month steady and your happy?

      • I think Paul N is right, my definition of wealth is not in dollars but in time, namely the number of years of net living expenses one’s liquid net worth adds up to. Once you hit 33x you’re financially independent because you no longer require wage income to support yourself for the rest of your life. You can get there by saving and investing a rising income, or by reducing expenses, or both. As for “rich” well that all depends on the situation of everyone around you. I live and work in silicon valley, and in the better school districts around here that means nine figures because a significant chunk of all that IPO and stock options money is going into houses.

    • Hi Paul

      I was just about to say the same thing. A bulk net-worth number is largely meaningless, it’s actually the monthly income that it generates that’s important. How you invest is a lot more important than what’s invested.

      As for me, I’d feel very comfortable and unconstrained financially at around 10k per month. What that translates to in actual net worth depends on the quality of investment. If you’re super-conservative and get 1% in a CD, that’s $12M. If you have a higher risk tolerance or find a very good investment, that’s $600k to $1.2M (assuming 10-20% return)

  57. I think the survey would be better if it had an age group. If I had $1 million in my 20s I would feel wealthy, but not if I’m in my 60s. Definitely agree that not having financial restraints upon my activities would make me feel wealthy. I don’t have expensive tastes so it won’t cost a lot, though I do live in a high cost of living area.

  58. Rich people take too much for granted. Give a poor person $500k and they’d feel rich. Ask a mult-millionaire if they feel rich and they say they aren’t. A million dollars “isn’t what it used to be” but its still rich as far as I’m concerned. $1M would put you at the top 0.5% of the world. 2/3 of the world doesn’t even have $10k to their name.

    • That’s true about rich people. I don’t know about giving a poor person $500k though. Most people probably ends up spending it all in a few years…

  59. I seem to remember a quote from Ram Dass, spiritual teacher of the 60’s, “You have to be a somebody before you can be a nobody.” I had it all, and gave it up at age 65. Wealth is an illusion. Now I am a nobody and I’ve never felt more free.

  60. We have a net worth > $3M, and feel a long ways from “wealthy”.

    I think for the personal perception of wealth, liquid net worth is more important than total net worth, since owning a million dollar house doesn’t help one live comfortably. In fact quite the opposite — some assets like expensive houses cost money while not generating any.

    I can agree with the $5M number, with the caveat that the $5M must be liquid (and a large portion of it must be outside of retirement accounts).

  61. Totally wealthy, have my health, loving wife, healthy 2 year old..
    Financially, not so much. Why is my son’s daycare costing more than my tuition was!?

    Anyways, I would classify wealth more in terms of cash flow. If the cash flow is going to where I want it to go (makes me happy), then I’m wealthy (as opposed to where I need the cash flow to go, which does not necessarily make me happy or unhappy). The amount of assets just helps create or increase that cash flow.

    • That’s great! I’m really happy with my life too, but I don’t feel financially wealthy at this point. It’s no big deal though.

    • “If the cash flow is going to where I want it to go (makes me happy), then I’m wealthy”

      I love this, I think it captures the mental shift that I haven’t been able to describe. I realized at the end of summer that we are wealthy, something my husband had known for quite a while. It wasn’t that I was unaware of the numbers, but I finally realized that we had that independence.

      We’re not financially independent, but we like our jobs and they’re pretty secure and they pay very well. We live on about 2/3 of our income, we are wealthy because we do this by choice, and it is by no means a sacrifice. There’s also a bit of comparative wealth – many of our friends make much less, and are saddled with student loans and other debt. We have about a million in investments, and our monthly expenses are about double Joe’s. We are comfortable. We are wealthy.

  62. My wife and I have thought we are wealthy for a while now, and try to use that as a means to get a good perspective on things. We don’t need to feel crazy stress from work: we are wealthy and could handle a job transition, if it comes to that. We don’t need to feel bad about giving or taking a vacation: we are wealthy and can afford those things without too much impact. Mostly we would like our current level of wealth, whatever it really qualifies for, to release us from some anxieties surrounding money.

    Really interesting topic, Joe. I heard once that the trick might be having more money than the people around you. I think the reason so many Americans feel broke is that we often try to reach for the next rung on the ladder in terms of neighborhood, friends, colleagues, etc. Surrounding ourselves with people who earn or have more might have good results from a bottom line perspective, but we might feel poor in the process.

    • That’s a great perspective to have. It’s always going to be difficult if we keep comparing ourselves to the people on TV. Mrs. RB40 reads Travel & Leisure and a few other magazines. Those lifestyles are way out of reach for the average American.

  63. Relative to other people my age that I know, I feel quite wealthy. Not because I have a ton in my bank accounts, but because I’m on the right track to reach my financial goals in the time I want to meet them. However, when I look at the net worth of some of my fellow PF bloggers – I feel downright poor! To be fair, I am very young and haven’t been in the full-time, out-of-college workforce for too long, and that’s what I try to remember. All things considered, I’m happy with where I’m at financially, and will feel truly wealthy when I’m able to quit my 9 to 5 job in exchange for working abroad making a little less – (in other words, when I’m capable of being able to take the financial loss in the form of a smaller income without it affecting my retirement plans).

  64. I consider 3M = secure, 5M = comfortable, 10M = rich

    I am resigned to the fact that any ss/medicare payments in my retirement will be means tested going forward on each of these financial levels. My concern is when the government starts taxing net worth to fund all of the baby boomers retiring with $100,000 or less in their retirement accounts.

    • That’s interesting. My number is just about half of yours. It would suck if the government starts taxing net worth. I don’t think that kind of law would pass though. There will be a ton of opposition. It’s downright un-American.

      • That “kind of law” will pass. Consider 10 thousand boomers retiring every day and look at the average balances in their savings. Do you think that the middle class is shrinking because their moving up or down. Check the political platform of the recently elected mayor of NYC for further perspective.
        I agree that there will be a “ton of opposition” to taxing net worth but recognize that there is 3 tons of support on the other side.

    • John: the government is not ” funding ” my retirement. I did !!!!!

      In addition to what I earned and saved the government is going to give me back a small fraction of MY MONEY that I lent them over the last 40 years.

      Knock it off with the attitude that somehow baby boomers are the reason you will have it tough when you retire. Quit paying for premium channels, drive your beamer until the wheels fall off, and don’t buy so many lattes each week.

      THAT is the problem with a lot of people not having enough to enjoy retirement.

      • I think you took John’s comment the wrong way. He is simply stating a fact. That fact is that because of the unusual volume of baby boomers who will retire at roughly the same time, combined with the fact that far too many of those baby boomers do not have enough money saved for that retirement, there will be a strain on the government’s retirement systems. To alleviate that strain something will have to be done. He is absolutely correct.

        First, as unfair and ridiculous it will be, SS will be means tested in the near future. Second, they will tax our net worth. He, and all of us, who will have our hard earned money taken from us to pay for those who chose not to save have every right to an “attitude” about it. In fact, if someone didn’t have an “attitude” about money they’ve earned being stolen from them then that person is rather odd if you ask me.

        This is the reason, as well as quite a few more reasons, why I vote conservative.

      • Wpw, thought I was doing well until I read these comments!

        I’m 43 and we have $2 million invested in a real estate portfolio. I find it strange that so many in this comment section invest so heavily in the market. Our returns with rentals provide “dividends” that easily beat most scenarios described here. The other thing is that with rentals you have a built in hedge against inflation. Rents will naturally continue to go up and so will the value of the properties.

        At a net worth of $2 million we don’t feel wealthy at all. Not even close. For me, I’d need a net worth of $7.5 million, most of that invested in real estate and producing a net (after tax income) of around $400,000 annually which should be fairly easy to attain. If, on the other hand, you’re invested in low risk market assets, you can cut that figure in half. I did not include the value of my business in my net worth calculation. That is because I have numerous partners and I’m not sure how I’ll be able to cash out. I do plan on cashing out and that should push me into the $5 to $8 million net worth range, but I’m not counting that until it actually happens. Until then, I will continue to save and try and reach my mark without the business equity.

        I say $400,000 because in my view being wealthy or rich means more than just living without worry. It means living without worry while also being able to afford multiple annual (very nice) vacations. Owning luxury automobiles and living in a luxury home. Being able to dine in fine restaurants as often as we want. Basically, living a luxurious lifestyle while not working and not having to worry about it.

        I’d also add that whenever I think of retirement scenarios and how much net worth we would need to achieve whatever amount of annual income, I always figure it so as not to touch the principal. I can’t stand the thought of draining my net worth to fund my retirement and hoping that I have enough to make it until I die. I don’t know how people do that.

  65. I’d be interested to see what $5 million conservatively invested (say, mostly in bonds) would generate after you pay tax on the income. I know it isn’t 5x the income from a $1 million portfolio mostly invested in stocks (that pay mostly qualified dividends that are tax free in the 10-15% brackets). Maybe 2-3x?

    My point is that comparing a top line wealth number like a million or $5 million can be difficult. How you invest it can be a large variable. The after tax “take home pay” is what would make me feel wealthy. I’m not sure that $90,000-100,000 per year would make me feel significantly wealthier than $40k/yr.

    I’ll still be flying on the same plane (perhaps in business class, but probably not first class). I’ll cruise on the same mass market cruise liners (perhaps with a balcony). I’ll see the same thing on overseas vacations, with a slightly different view from my 3 star hotel balcony instead of a 4-5 star hotel balcony. I could drive a fancier car, but I still couldn’t afford to hire a chauffeur.

    In other words, I couldn’t afford to fly on a private jet, or own my own private yacht, or my own island vacation home. Things would be pretty much the same with $100k/yr as they would with $40k.

    I don’t feel wealthy with my very low seven figure investment portfolio. But I’m comfortable and content (perhaps living in a relatively low cost part of the SE USA helps). I think I would need $10 million or more to feel “wealthy” (that would probably yield $200-250k/yr after taxes).

  66. Though the Warrior Family sets our goals with dollars figures, the end goal is that we are able to live life without worrying about paying the bills and enjoy life a little bit. In other words, the number doesn’t matter as much as what the money can do for me.

    I say this with caution because the financial numbers matter. They are the key and what we have to work with. My only argument is figure out what kind of life you want to afford THEN figure out what the numbers need to be to make that a reality.

    The Warrior

  67. To me the $5 million sounds reasonable as your money can be invested in a way that provides more than enough income for you to live on without worry, while being able to account for rising healthcare costs, inflation, and any other expenditures. I would more than likely alter my asset allocation significantly as I’d look to protect that ‘nut’ while still keeping ahead of inflation.

  68. I agree with the other comments that location plays a large part in the amount. It would take much, much less to feel wealthy in my area of the Midwest than it would in many other parts of the country. And also lifestyle expectations. With 2 million, I could live a much more lavish lifestyle than I currently live. Using the 4% rule, I’d be financially independent at 1 million. Of course, it evens out a bit more when you account for lower earnings in areas with lower cost of living.

  69. €2m would be more than enough, anything above we would probably donate it to family or charity. But with our current income that’s an impossible target 🙁
    So either we have to earn much more, or spend less 🙂

  70. RB40,
    Given our simple habits and needs, I believe 2 or 3 million would be enough, in todays dollars. It also doesn’t hurt that I live in Florida where things (except insurance) are cheap. I could see why someone in New York or London would need 3 times as much to feel the same way. In a third world country, the money we’ve already invested would be more than enough. It’s all relative, right?

  71. I don’t feel wealthy at all, unfortunately. 🙂 I had one month so far when I earned a bit over $10,000, and then I really felt wealthy, but I wouldn’t actually need that much. I thought about it in the past and with me living in Romania where the cost of living is low, I would only need a minimum of $70,000 per year to really feel wealthy.

  72. I think ‘wealthy’ will also be dictated to some extent on the geographic location; e.g. having $1 million in Bay area is very different than having $1M in Portland or Seattle, with the house price being the real differentiator. For me, if I have $3M when I plan to retire around mid-50’s, I would consider myself well beyond wealthy. Even though I currently live in Bay area, I won’t plan to live in such an expensive place, while I am not working (my preferred choice will be somewhere in Pacific Northwest). Considering my current cost of living (leaving aside the rental cost) and also including my travel expenses (traveling 6 months a year, until my health permits), I should be able to live comfortably for the remainder of my life with that money. Health insurance & medical expenses can throw up some unpleasant surprises, but one should probably plan keeping a decent emergency buffer for health costs.

    • You’re absolutely correct. With more wealth, there are more choices. The houses in the Bay Area are ridiculously expensive. I wouldn’t want to have that much of my net worth tied up.

      • It all depends on what you want. I get annoyed sometimes by how everyone says the bay area is so expensive, granted it’s definitely not cheap. But there are places that are affordable here like anywhere else. Granted median rentals in sf are over $3,000/month but you can also rent a room in a house or apartment for $400/month. By the same token while there are multi-million dollar homes as well as homes under $100,000. If you are willing to live a bit away from the most popular metro zones you can make it work.

  73. I enjoyed reading the UBS study when it came out this summer. The main dilemma that came out from readers is the “no financial restraints on activities.” When you put those words, a lot of people argue why of course only 60% think they are wealthy with $5 million.

    5 million sounds about right. It will allow you to live in a nice place and not have to worry too much so long as the principle isn’t assaulted.

    • Yeah, when you say no financial restraints, then that can mean anything. $5 million sounds good to me too, but I’d be happy with $3 million. 🙂

    • If I had $1,000,000 it would put me in the top 1% Of my country so I think that would mean I am wealthy. If I didn’t “feel” it then I think that would be my problem to deal with. Get ready with those tiny violins yea?! 😉

      5 mill just seems overkill, I honestly wouldn’t know what to do with the interest it produced apart from give some away to charity, which would obviously be cool.

      • That’s great! Are in the UK? Must be another country.
        I feel like $1 million is nothing in the US. Everything is so expensive.

      • My wife and I have 4.8 million as of today. With our 240k house, and our Camry paid for we spend about 45k a year of which 12k is health insurance. We also pay 50 to 60k a year in fed taxes and Oregon taxes increase that by 50%, so figure 75 to 90k a year in taxes.
        So if we make 3% on our 4.5 million 135k per year so we get 45k and taxes would get the rest in the years we pay 90k in taxes. Additionally inflation at 2% erodes our purchasing power by another 90k per year. So actually taking purchasing power into account we are going in the hole by 75 to 90k per year. I DO NOT FEEL RICH.

        • That’s crazy! 4.8 million and you don’t feel rich. I graduated from college over five yrs ago and I can’t find a job. The last job I applied for was given to a guy that just retired from working at coke cola for 26 yrs. I bet he has millions stockpiled too… Why do people that retire eventually take jobs away from younger generations, well I’m sure it’s got a lot to do with over spending or living beyond their means. I’m working hard labor in construction and can barely make it week to week. I bought the only house I could afford(12,000). I have $22.00 in my pocket right now. . Dave, don’t be such a …. By the time I get your age, there will be no Medicare or Medicaid… There will be no retirement for this younger generations. Over 18 trillion dollars in debt.. I don’t see it getting much better.. I hope and pray that I’m wrong tho.


        • Dave, you didn’t mention your age. That would be an important factor. If you and your wife are in your mid-60s or 70s, for example, and you withdrew 2% if your principal a year ($96K) for fun money (travel, shop, eat out, and basically “feel rich”), you’d never run out of money. Of course, when you’re in your mid-80s through 90s you’re not really going to be traveling and shopping, so you won’t realistically need this fun money the the whole time, just for the next 10 years, maximum.

          Also, you did not factor Social Security into your equation. That should be another $30K or $40K a year for you and your wife combined, assuming you both earned a good living pre-retirement. Also, your health insurance premiums sounds really expensive. If you get a higher deductible plan, your premiums would be half of what you quoted.

          I think you’re being unnecessarily worried. You should sleep very well every night with that nest egg invested in a conservative portfolio. Congratulations!

        • If you did make 135k, which I highly doubt, the max tax you’re looking at is slightly less than 50k, and it should in fact be much lower because investments are taxed at a lower rate. The only way your story is true is if your “wealth” is in fact a business which u assume it is worth 4.8 mil based on gross income, in which case it is very plausible that you’re paying 90k if you’re adding the sales tax, but that means your networth is significantly lower than 4.8 mil, about 1 mil tops, and depending on how labour intensive the business is, you may not get much when you sell it if the pay is proportionate to effort(which sounds like what this is) probably only a few hundred k if all it does is generate 45k after tax.

      • As we age our medical expenses get higher. Anyone who thinks they can ‘live’ on $120k per year in their 60’s and 70’s is smoking crack. And 3% interest? My children (12, 11 & 10) are earning 5.6% on AT&T–/their picks, not mine.


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