A great deal of wrath these days seems to target the wealthy although that generally means billionaires or close to it. However, being wealthy is very relative. I suspect many HD readers are looked upon as wealthy by their peers while perhaps not feeling so themselves. I admittedly fall in that trap.
Many comments on HD by those retired indicate to me being relatively wealthy or pretty close to it.
So, look at the data as estimated as it may be, and see for yourself. Would your friends, neighbors and relatives be justified in viewing you as wealthy – with a touch of envy?
For reference, latest data indicate:
Median household income:
$80.6k overall:
peaks near $95k (45–64)
and drops to $57k (65+).
Median net worth:
$39k (<35)
$409k (65–74)
$336k (75+).
Average net worth:
$183k (<35)
$1.79M (65–74)
down to $1.62M (75+).
Overall median net worth: $192.7k; average is $1.06M.
I’d say having a net worth in the 90th percentile makes a person wealthy in most people’s view.
Approximate 90th percentile net worth by age:
Age 45-54 $1.4 million
Age 55-64 $2.2 million
Age 65-74 $2.5 million
Age 75 + $2.00 million
These figures are estimates based on Federal Reserve and Census data, adjusted to 2024 dollars
Recent surveys suggest that a net worth of $2.2 million to $2.5 million is often cited as the threshold for being considered wealthy by the general public. However, this can vary significantly by location and by generation. I say it also depends on what is included In the numbers. If it is mostly one’s home, that makes a difference in my opinion.
There is a difference between income and net worth of course. Someone can have a high income but not be truly wealthy if they spend it all or have significant debt. Conversely, someone with a modest income but significant assets may be considered wealthy.
Wealth is not financial health. Just as having more doesn’t necessarily make one happier.
Everything is relative. According to the World Inequality Database I am certainly “rich”. Here in the U.S., where one lives makes a difference, too. Housing has distorted wealth calculations, so it might be best to remove the value of a home asset because it isn’t liquid. On the other hand, if one’s home is paid off (no mortgage) and real estate taxes are low (<$5,000) then it may be reasonable to include the home in any calculations. However, after seeing how easy it is for this asset to go up in smoke (California) or float away (hurricanes and floods) it seems that including the house in certain calculations is questionable.
Income is a factor as is net worth, but there are certain areas of the country in which money simply doesn’t go as far. I use net worth, annual income and expense numbers for determining my financial “Health”. If I am financially healthy I do feel better and that is what really matters to me, and always did. I don’t care about any comparison to the situation of others.
Furthermore certain U.S. politicians would say I am not only rich, but very greedy because “I don’t pay my fair share.” I’m not alone as just about everyone in the top 10% in the U.S. is put in this basket by greedy politicians (yes, greed is relative too!).
https://wid.world/income-comparator/
Good morning! I’m Kenn and I live in Richmond, VA. I’m a long timer reader, first time posting.
In his book The Psychology of Money, Morgan Housel draws a crucial distinction between being rich and being wealthy. He argues that understanding this difference is key to making better financial decisions and achieving true financial well-being.
Here’s a summary of his points:
Being Rich:
Being Wealthy:
In essence, while being rich is about income and visible consumption, being wealthy is about accumulated assets and the freedom and control over your time that those assets provide. It’s a psychological state of security and optionality, rather than a display of material possessions.
Having lurked around this site for the last 5 years, it is my impression that most Humble Dollar participants are more focused on the benefits of wealth which provide freedom and control over their own destiny rather than shiny riches.
Just my thoughts.
Kenn
Based on the two definitions I guess I am wealthy, definitely not rich.
BTW there was an old TV show called Lifestyles of the Rich and Famous. I never got the concept of why someone would want to watch someone show off their wealth. I just don’t care