Personal Finance Friday - What is Wealthy?
What does it mean to be wealthy? That is a hard question to answer because it’s such a subjective thing. Many people would feel wealthy if they had $100,000 in their bank account, others that I know personally won't feel that way until they have $10,000,000 (you know who you are :) ). So what is wealthy? Can we actually define it? My personal definition of wealthy has always been the freedom not to have to work any more, the point that you are not fearful of losing your job but doing a job because you enjoy it or get some purpose out of it. That in and of itself is kind of a subjective answer because it depends on your lifestyle and risk you’re willing to take. If you live very frugally and take a little bit of risk you could probably get away with only needing $800,000 to $1 million. I personally think I'd need $3 to 3.5 million to feel like I was "wealthy" by my own definition.
But what happens when you ask a bunch of people that question? Hopefully you get a wisdom of the crowd type answer... below is a link to a survey that asks just that question. Do you know what the answer was?
$2,270,000... see the link to the survey below.
That's an interesting answer because if you take into account the lower cost of living in other parts of the country, that $2.3 million is probably pretty close to my equivalent $3.5 million here in Southern California. So it seems, most people agree in the end that being wealthy is being free from the need to work. With $2.3 million you could have a pretty sustainable income of about $85,000 a year, certainly enough to live on.
Is that your goal? Or is it to just to get by in life? I'd like to suggest you aim a little higher than just getting by, maybe you should aim for being "wealthy"! Sure you might not reach it in the end, but think how much better off you'd be by making the attempt. Ya it involves hard work, sacrifice, planning, but honestly all of those things are good unto themselves, you will literally, most likely, will become a better person in the attempt (unless you go the Scrooge McDuck path).
Below is a link to a podcast that inspired this post. This a good podcast for those looking for a little extra content in this area.