Tuesday, March 20, 2012

How Much Money Would You Need to Feel Rich?

Exactly what would you need to feel rich?

When Justin and I were first married, we were discussing how much we thought one of our professors made. He was a department head and lived comfortably. We decided he made about $16 a hour.

Oh, how naive we were.

Even though I now know professors make more than $16 an hour, I still look at their average salaries and think I would feel rich making that much money.

The FiscalTimes.com posted an interesting article with result from a poll saying how much money people would need to feel rich. Here is an excerpt from that article.

Some 18 percent of people would need less than $60,000 per year of income; 12 percent said between $60,000 and $99,999; 23 percent said between $100,000 and $150,000; 18 percent said between $150,001 and $299,999; 11 percent said $1 million; and 4 percent said more than $1 million. 

I think this article is missing a big chunk of information. Feeling wealthy and financially free isn't tied to a specific income or dollar amount. After all, plenty of millionaire celebrities are in financial hot water (see a slideshow from Starpulse.com here).

If you compared what I make now to what I made back in my college days, I definitely could be called rich. But our expenses have grown with our income. Thanks to things like this:

buying our house in 2006

And this:

Becoming a family of three, 2009

It doesn't matter if you make twenty grand or five million. If you spend more than you earn, you will feel tight. You'll never feel "rich." So you can't label "rich" with a dollar figure.

That said, here are some things I think I will need to consider myself wealthy.

  • A year's salary in the bank
  • No debt whatsoever
  • No need to ever finance anything again
  • A desire to finance purchases because it makes more financial sense to get hit with lender's interest rates than to lose out on interest income on my investments
  • Nothing broken in my home! You know how you always neglect replacing the leaky faucet because it is just so low on your list of money priorities? None of that. Everything in perfect, working order!
  • Nice vacations at least twice a year
  • Some kind of cabin, vacation property, time share, second home to enjoy--completely paid off of course. 

What are some things on your "when I'm wealthy" list?


Becca said...

We've talked about being 'rich' before and its a lot of the same the no debt, ability to just go buy something like a car without having to worry about a loan. The dollar amount coming in doesn't seem to matter anymore when that ugly word DEBT is gone.

Jewls said...

Fund a private adoption with ease (you know the expensive ones with small wait lists?).

kelley said...

That's a pretty good list. I've always said that instead of winning the lottery, I want to have $2k in the bank at all times. Pay bills, go to the store, buy some cool shoes. And it magically still says $2k. That way you never go nuts buying things you don't need but you have enough for the things you do.
In a non-magical world, for me being rich would be being able to buy plane tickets for the family without breaking a sweat.
Or going on stress-free vacations.
And never having to charge anything, ever.
And having a personal trainer.

Karen Klasi said...

I call my husband Dave Ramsey's BFF, so I totally get the desire to be debt-free. Beyond that, two things crossed my mind.

1. I know myself well enough to know that I will always want something I don't have. Ridiculous, but true.

2. I read an article that took a survey of millionaires, and across the board, they said they didn't feel they were wealthy until they had SEVEN MILLION DOLLARS in the bank...which makes me think that no matter how rich people are, they will always feel the need to be richer.


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