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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I think you shouldn't have stated that you hate the huffington post because you gave away your whole agenda.


I wll put the area one lives into consideration, but only up to a point.

College loans only partly get put into consideration as you are also looking at a lifetime earning potential vs short term(relative) pay off time.

Children I do not put into the equation

House only in that if you are in a 4000sqft home and trying to compare with people in 1500sqft homes or even the person in the 600sqft loft, you don't get to play as your mortgage at that price was your choice based on your income.

$300 a month to pay for student loans when bringing in $109k is NOTHING


So yes, to a point there are relative things to look at, but for the majority of the things, it is just as easy to look at raw numbers.

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.

Student loans are how you got to where you are, so they don't count. Houses, boats, cars, phones, toys, bikes, etc. are what you do with where you are so they don't count either.

I will say that my wife and I are in the top 10% of earners (together that is) but we sure don't feel like it. We don't live in a lavish house or drive Mercedes or BMWs as a matter of fact I don't even have a car; I gave my car to my son when he got his license. We don't own a boat, I mow my lawn with an eight year old walk-behind, and I do home maintenance myself. Even my golf clubs were bought used.
So, what is wealthy? Back when I was in the Navy making less than $20k a year I thought I would be in high-clover if I made even $35k and $50k was just a pipe dream. But I did have some fun then.

(not adjusted for inflation, of course) ;)

Of course.  I was using the Huffington Post's numbers.  We paid over $25k in taxes and still had to pay $1500 more.  It's crazy.

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.


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