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What does it take to be “rich?” Answering that question is nearly impossible. There are as many answers as Google sites, but after trying, I have settled on being in the top 10% of income and net worth at around $200,000 per year and $2,000,000. Most people think that’s rich.
Keep in mind you can meet the net worth goal even falling short on income.
What got me thinking about this was reading various social media sites where individuals were complaining about their inability to be wealthy and displayed strong envy over those who were. You can’t be wealthy as an employee was a common theme. The deck is stacked against you popped up. It’s different these days, blah, blah, blah.
Time to use one of my favorite words, balderdash.
Getting rich is nearly always possible as there are many routes to take.
Start a business, be an entrepreneur. That doesn’t mean you have to be a Bezos or Gates, you could be a plumber or even franchisee.
Invest. Plain and simple save and invest every day of your working life. Save unexpected income – a small lottery winning, a bonus. I save the pennies I find on the ground. Get to the point where money works for you. Over the last year my investments grew more than an amount equal to a years salary when I last worked in 2010 – and I didn’t lift a finger to earn it.
Don’t be dumb with your money. Spend prudently and wisely. Live within your means. Failing in this may be the biggest obstacle to wealth for most people.
Don’t be afraid to work two jobs at times to meet your goals. Work available overtime if necessary. Create income with a hobby. Hold a garage sale. When I was twelve I attempted to start a business raising tropical fish and selling them. It didn’t go well when the fish ate their young and my profits, but the idea was there.
Make yourself more valuable on the job, enhance your income through job growth. Never use the words “that’s not my job.” You can be wealthy working for someone. It may take longer, but it works. As you do so, avoid lifestyle creep.
Caution: I am not suggesting the accumulation of wealth should consume your life. There must be a balance – family first.
Unless you hit the jackpot and your new company issues a IPO, you won’t be rich overnight. It likely will be a long journey. You may not be rich at 40, but at retirement it comes in handy.
Make a plan, set goals, put them into action. All my life I had goals. The important ones had nothing to do with money, but I did set milestones for investments. I only achieved the latest one six months ago after 62 years of saving and investing only to see it fall short and then rise again – for now.
As that well known Nike slogan says, “Just do it”
Excellent points on what it takes to accumulate wealth.
For me after thinking for quite a bit about what rich means, I’ve come to define it as being able to live a meaningfully and comfortably without having to work for money and not fear running out of money. The dollar amount depends on alot of things – lifestyle, definition of meaning and comfort and age.
Also, instead of net worth as a measure – I use investments. Specifically, I don’t include the value of my house, cars etc. I actually view an expensive house as a problem in retirement as taxes and upkeep costs are higher and those costs will have to come out of the income from your other investments.
Great post as usual, Dick. It took me a long time to realize that the spending part is key. Of course, income is important but controlling my spending and really analyzing needs v. wants has helped pump up the savings over time. A valuable lesson to learn but it probably took longer for me than it should have. Rich is so hard to define especially since it’s dependent on where you live and where you intend to retire. Rich for me is being able to sleep well at night and not worry about paying for an unexpected expense, i.e. the washer breaking. What’s that saying – it’s all relative…
Yes it is relative. The idea of millionaire is misunderstood as well. When you use real net worth there are a lot of millionaires, but not necessarily with the ability to spend as many people may perceive.
I wouldn’t say that I’m rich based on my net worth. I do feel pretty well off based on the fact that at ages 71 and 69 our total monthly spending is only about 60% off our monthly income.
A lot of good advice, as usual. I’d put your numbers in the “well off” category, and suggest “rich” is north of at least 5 million, if not more.
Two million puts you in the top 2-3% of Americans so I guess it’s a judgement call.
I’m thinking that when those in the 2-3% group rub shoulders with the 1%, they would hesitate to consider themselves in the same category.
I’m sure you are right. It’s all relative.
Dick, where did you get that statistic? Check out this: https://dqydj.com/net-worth-percentile-calculator/
$2 million net worth is only at the 90th percentile…top 10%. I think one is wealthy at that level. And one out of 20 has over $4 million. Lotsa rich folks out there.
That’s why I opened with I settled on Ken. I looked in many places and found many answers.
Ok, that made sense. That’s why your 2-3% comment made me scratch my head. Top 2-3% is actually the $7 million to $10 million range, not $2 million. Regardless, a lot of people in this country have what I consider to be massive wealth.