I've been talking with some friends about the economy and things of that nature. It struck me as weird we were at odds about who/what is wealthy. I see people that read the articles, like I posted below, and assume that the "top earners" are actually taking home all that money every year. But what about Cost of living, loans, and things of that nature? 

So I asked you all, how do you define wealthy?? Here are some questions I've come up with as well

1) Would you consider a single person making 109k, wealthy?

1a) what if they lived in Manhattan, or LA and paid nearly $2500 a month for their studio apartment, so they didnt have to sit in traffic for hours each day. They also didnt own a car.

1b) what if they had student loans they pay? say $300 a month?

2) What about a family making 400k?

2a) What if they were both doctors with nearly half their yearly income in loans?

2b) What if they had a house and children?

2c) What if they lived in an expensive area like, Boston, LA, DC, etc?

I ask these questions based off of this article


I honestly hate the Huffington post, but these were the most complete and current numbers I could find.

So what do you think?

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There was a study a few years ago that household income after $75,000 year does not correlate to increased happiness. Of course, that study was averaged across geography and household size, but as someone making only 2/3 that, to support 2 adults, while living in the second most expensive part of the country, it's my next goal.

While cost of living here in the San Francisco Bay Area is high, wages are higher than the national average, too. They're not so high as to make up for the cost of living - look at any review of housing costs nationally to confirm that. But a couple things make it not quite so uneven as people in fly over country might think.

First, our higher wages go farther for small consumer purchases, like food and gadgets. We spend roughly the same raw amount on food, and certainly on iPhones, as people in fly over country, making them a smaller percentage of our income. We might actually spend less, in terms of raw amounts, on vacations because of easy access to 3 international airports.

[Same goes for student loans. The same loan amount will result in the same loan payment. But graduates who go to larger markets with higher pay have loan payments as a smaller percentage of income.]

Second, state taxes are deductible from federal income taxes. We have both a high state income tax rate, in terms of the percentage, and our higher wages put us into higher federal brackets. Being able to deduct state income taxes from federal income taxes takes a lot of the bit out of our otherwise much higher tax burden.

(not adjusted for inflation, of course) ;)

1. Wealthy? Probably not, but doing well - Yes. 

1a. Move to Brooklyn if the rent is too high and you still don't want a car. Lifestyle choice doesn't change your economic status any more than buying too big a house does.

1b. Yes. 

2. Again - wealthy is a tricky word... but probably, Yes. 

2a. If they are paying 60-100K a year in student loans they are doing it wrong. Also, won't have them for long. So yes. 

2b. Yes.

2c. Yes.

For a point of comparison, I have a wife, child, loans, car and condo in Chicago (high cost of living, and lots of related expenses). 400K is more than 4x my income. If they are struggling along with that, they are doing something wrong. 

My Grandfather explained it this way and it still fits. He said "Wealthy exists only in the heart's mind and exactly halfway between greed and envy".

To me none of your above parameters count as "wealthy". My job careers mostly to the rich, so I get to see the varying degrees of it.

When money and opportunity become entrenched and self-propagating as part of your background, that is when you are wealthy. Your older generation went to the right schools, so you get to go to them too. You make career choices based upon this background, and because of your family connections get access to opportunities other people, no matter how hard working, get access to. You live in the "right" neighborhoods, marry more or less the right people, and hang with the right people at the clubs you all belong to, and even vacation in the same spots together. Most of the time you simply don't know any other way to live, no matter how hard working or a slacker you are. You are part of something bigger; the moneyed set.

That's wealth to me.

Hit it on the head...

Agreed!  And I would make a distinction between wealthy and rich.  Wealthy denotes a lifestyle, rich denotes lots of money.

From my perspective, every example you give sounds like wealth. At first blush, it astounds me that anyone could think otherwise. But after considering that I've lived my entire life in poverty, I realize my definition of the term is skewed by my experience. Thus, I'll conclude that the meaning of "wealthy" is relative to the user.

Still, I don't suppose the squishness of the term when used colloquially demands that that the term cannot be defined on the macro scale. This would be to commit the fallacy of composition. It does not follow that since you and I have no agreed upon absolute definition, that we cannot approximate a reasonable and workable definiton, insofar as it serves some benificial purpose for which a definiton must obtain(i.e. tax codes, welfare distrubtion, etc.). In other words, it seems perfectly feasible that one could take a bird's eye view of the whole and discern the necessary and sufficient conditions of "wealth" so that one could do whatever one wishes to do with it.

I wouldn't hazard a guess about by whatever specific method this would be done. I am not an economist, though I imagine it would consist of averages, means, etc.

But, I think it would be a mistake to attempt to reduce a reasonable definiton of wealth to disposable income (or even to income), something I take to be implicit in your questions. But this is not to say that it is merely beside the point. It would just be one of the necessary conditions.

I would say wealth must also include earning potential, and therefore educational attainment and existential opportunity. Also, we might say wealth should include property.

No to 1 and 2, and consequently to the follow-up questions as well.  But, as other answers have already illustrated, it depends on one's perspective.  I reserve a term like wealthy for the very rich, and have a broad category that I would characterize instead as upper-middle class or affluent.

I would attempt to characterize the distinction this way: the affluent have nicer homes, cars, clothing and vacations than those right at the middle of the income bell curve, but they still have to save and watch their spending.  The wealthy, in contrast, have multiple nice homes, can buy any car they want without considering the cost, travel wherever they want whenever they have the time, can buy any clothing they want, etc...

The middle-class family goes to Disneyland or the Grand Canyon on vacation, the affluent go to London or Rome, the wealthy can jet to London to see their tailor whenever they want.

A person's definition of wealthy says more about them than it does the 'wealthy'.


The upper class thinks the way-upper-class is wealthy.  The upper-middle class thinks the upper class is 'wealthy'.  The middle class thinks the upper-middle class is 'wealthy'.  The American poor think the middle class is 'wealthy'.  The third-world poor think the American poor are wealthy.  There's always a bigger fish.


Everybody thinks the next-step-up is the big one.


To me, all of your examples are people who work for their money.  They're not wealthy, they're successful.  The truly 'wealthy' have their money work for them.



I don't remember where I read this so sorry about not being able to cite it properly.

What is "enough"?

You have "enough" financially when your PASSIVE investments are earning enough interest to cover all your EXPENSES.

As I read this, and as I believe since I read this, "You are wealthy when you do not HAVE to work for a living but choose to work because working is valuable in its own sake."

Since you asked for my opinion, I would say that, to be 'rich' would be freedom from want:  The ability to meet your financial obligations, to create a comfortable life for yourself and your family, to assist your children in obtaining a good education, and to retire at a reasonable age with the ability to live your life to your desired standard.  These are all subjective qualities that really cannot be quantified on anything other than a personal level  (As an aside-- because this whole concept hinges on personal opinion, a national discussion on 'tax the rich' is ridiculous).

If I was forced to put a number on 'rich', I would say, here in California, an annual income of 400K would eventually get you there.  I have been there, once upon a time, and at that point one is finally able to break free of the routine costs, taxes, etc. that suck up most of the average income and allow substantial investment in land and/or stocks, which, in turn, will start to build into true riches.

Hope that helps!


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