Discussion in 'The VIP Lounj' started by pillatier, Jul 21, 2020.
Are You Rich? How the Wealthy Are Defined
Me: Wealthy? Nah.
Super tough question. I would think we have a very wide range of net worths in this group. And an equally wide range of how a person feels about their wealth, and the two are probably not correlated. I also think age needs to be factored in.
Are you wealthy? We asked a bunch of people and a bunch of experts. We don't know either.
My goal "not my term" is "financial independence or findependence". Meaning I don't have to work anymore. That's why I think age needs to factor in. Then the life style I want to have needs to factor in.
Me too on lifestyle. I like spending money. I would be an outstanding billionaire.
The only thing accurate in that article: "Wealth is in the eye of the beholder," says Tiffany Welka
The more interesting question would be a more sociological question about wealth and our views of wealth. Why do people seem to simultaneously worship and hate the wealthy? Is it a particular $$$ amount or more about how that wealth was acquired?
I don't know who said - There is a difference between rich and wealthy. Rich are those who are happy, have loving families, friends, neighbors and are admired for their good deeds even though they are poor. Wealth alone does not make one rich.
IMO it is the perception of Ill gotten vs Well gotten wealth and what they do the wealth. The Robber barons are good examples. Although some of them redeemed themselves later in life donating to or building well regarded institutions of today.
I'm retired and financially independent. Living the good life. A bit concerned with the covid world and the impact on my investments, but all in all, pretty well off.
Don't need to move, house is paid, don't need to worry about exposure at work. Don't have a lot of worries.
I am high middle class. We are comfortable.
This thread bears out my previous statement on This issue that you are not wealthy unless you have three million in assets after you pay off any loans/ mortgages
Sounds like you are in a good spot!!!
Kinda similar to Mike B. But carry a tiny mortgage balance. Lucky enough to have worked for a company which still had a defined pension plan. Pension alone nearly covers my living expenses the SS covers all the rest. Carefree single, with good friends and close neighbors.
Pensions are the thing.....
For some people to define their wealth you need to put a dollar amount on that pension income. To me this isn't that difficult, but that is just how I do it. Others may put a different value on the pension. Then there is the difference in value of the pension versus an investment account or say real estate upon death. It is pretty tough really. I don't have a significant pension so it does not factor into my math for myself.
Pension? My pension is what I built for myself.
Dave we are the same (still building).
But let's say I get $75000 a year from a defined benefit plan of some sort. Using the 4% rule that income is basically a 2M dollar nest egg.
So do you count the 2M? Not really, but for us to have that income we need that 2M.......
Once a certain Threshold is met & a person(family) doesn't have any security or
fiscal anxiety....then most studies seem to indicate you're "comfortably rich".
Not to overlook the obvious,Good health, Place to live, clean food & Water, secure in
your personal safety.....etc.,
Regrettably, those conditions aren't always met. For a variety of reasons.
I was told that no matter what you expect (hope) your investment will realize as income in the future, your net worth includes the real value of the investment today.
Again I agree.
The pension person versus the non pension person could have the same income and a 2m difference in net worth. And that is really a key point. When you (not pensioned) pass away you could pass money on or donate it. The pension person with the same income does not have this "worth" to pass on. This could easily go way off topic here discussing the value of pensions. It is interesting stuff, with wildly differing opinions.