WHEN SHOULD WE consider ourselves rich? Sure, income and wealth are important. But don’t focus just on dollar signs. Instead, think about money in terms of how it makes you feel, what it allows you to do and what your lifestyle costs. Here are eight possible definitions of rich:
1. You almost never worry about money. This is a good one—but it probably has more to do with you than with the sum involved. Some folks would get a tremendous sense of security from $50,000 in the bank, while others warily watch the world from behind their $5 million cash mountain.
2. You’re satisfied with what you have and you’re never envious of others. This may not make you rich in the eyes of other folks. But it’s an admirable quality—especially when we consider the next definition.
3. You have more than your neighbors. Research suggests that we care less about our absolute level of wealth or income, and more about how we compare to others. This is unfortunate: Unless you’re the world’s richest person, there will always be somebody who is better off, so maybe you’ll never be satisfied with your lot in life.
4. “Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness,” opines the character Wilkins Micawber in Charles Dickens’s David Copperfield. “Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” In other words, if you have enough to cover your living costs, you’ll be happier—and, presumably, you should consider yourself well off.
5. The Dickens quote packs a punch, but it begs the question: What are you spending your money on? It’s important to distinguish between needs and wants. That brings us to an alternative definition of rich: You can pay for what you need—and you aren’t consumed by what you want but can’t afford.
6. You don’t have to work. This is a good litmus test, though it raises a crucial issue: If you aren’t working for a living, what are you doing with your time—and are these other things making for a happier life?
7. You need a paycheck, but you have a job you love. This is closely related to definition No. 6: If pretty much every day is a pleasure, you have a rich life, even if you don’t currently have enough to retire and even if others wouldn’t consider you wealthy.
8. You have enough to lead the life you want. This is our preferred definition of rich, and it encompasses many of the definitions above: If you have the financial wherewithal to spend most days engaged in activities you enjoy and find fulfilling, you should consider yourself rich, no matter what your net worth.