Lately I’ve been thinking about what my definition is of “rich.” According to this study, rich is an annual gross income of $160,000+ and $3.2 million in net liquid assets. I think we can all agree that that is rich, but specifically, what does it mean to be rich to you?
Rich is a subjective term – just like a lot of things in life. Think about these questions:
- How many kids is “a lot?”
- What temperature is “too hot?”
- What’s “too cold?”
- How many square feet in your ideal house?
- What’s your ideal weight?
- How many hours a week should you work?
etc, etc, etc. So many things in life are subjective. Most likely, no two people will answer all of those questions the same. To me, rich is a very subjective term. What’s rich to me could be poor to someone else. Of course, we can probably all agree that once you cross a certain threshold, you’re rich (like the study I mentioned above), but for the average person the term can vary greatly.
The Business Insider posted an article on “How to know if you’re rich” and proposed 12 “tests” that determine whether or not you’ve made it. I agree with most of them and also am adding some of my own.
My definition of rich
I would no longer need to work
This, to me, is the absolute definition of rich. If I no longer needed to work to support my lifestyle of choice, I’d be rich. I don’t care if I’m living in a tiny farmhouse or a mansion, if I could wake up every day and not have to work but still support whatever life I want — awesome. Now to decide what type of life I want… 😉
My kids would be provided for
Now that I have kids, life is no longer about me. Even if I were to be happy living in a shack, I still need to take care of and provide for my kids. This includes helping them with college and their weddings, and leaving them a good chunk of change once my husband and I pass. Again, I may not need a lot of money to survive, but I want to leave money to my kids.
I could travel
Confession: John and I would love to be able to travel more now, but truth be told our priorities aren’t there right now. As much as I would love to go on weekend trips and fun vacations with my family, it’s just not going to happen right now. Can we afford it? Actually, yes. We’re good at budgeting and could make it happen, but right now we’re focused on saving for a down payment for a house and growing our retirement accounts. The fact that are girls are still so young makes it easy to put off traveling, too. But…I want to see the world. I’ve mentioned before about traveling across the country in an RV. Whether or not that happens next year or 20 years from now, it’s going to happen. I’m happiest when I’m on the open road with my husband seeing new places and experiencing new things.
I would be debt-free
This one is pretty self-explanatory, but there is no way I would consider myself rich if I had debt. That includes mortgages. We hope to own our own home as soon as possible in addition to a few rental properties.
I would buy what I wanted
Regardless of my income for the month, I tend to live the same. My “luxuries” include Starbucks a few times a month, my favorite cookies from our local Fresh Market, candles from Bath and Body Works a few times a year and home decor every now and then. Over the years, I’ve cut out a lot of luxuries I always thought made me happy — things like paying to get my hair colored, going to the nail salon, going to Starbucks every day and eating out frequently. I’m much happier when my money is saved. If I were rich, I would be able to buy all those luxuries I no longer do (but most likely I still wouldn’t, haha).
The bottom line: I will feel “rich” when I can wake up and completely do as I please. If I want to work, I will work. If I feel like traveling, off I’ll go. If I want to spend the day reading while sipping a Starbucks coffee and eating a fresh-baked almond pillow cookie, that’s what I’ll do. For now, I’ll continue getting up every day and working. I’ll continue learning to live off of less so I can achieve my long-term goals. I’ll continue working towards financial freedom day in and day out, as I know one day I’ll get there. But you know what? Life right now is good. Really good. Learning to live off of less and create a life that you enjoy gives you so much satisfaction. This is a different post for a different day, but John and I have created an awesome life for ourselves and our girls. We’re by no means rich, but we both work for ourselves and wake up doing what we love every day. Together we dream about our future while being incredibly thankful and appreciative of our present. We feel rich even though we don’t have a multi-million dollar bank account, and you know what – that’s OK.
How would you define “rich?”
photo credit: Flickr via Barbara
I feel rich now but in non-financial ways. When it comes to money, I think my criteria is much like your’s. I don’t need to *own* a multi-million dollar yacht but I’d like to be able go for a cruise on one if I chose to.
I guess, rich to me is having enough to live the life I choose. In truth, that wouldn’t take a whole lot of money to achieve, which means I have no excuses for not achieving it! 🙂
It’s a good question though, and an important one to decide for yourself or you get caught up in the marketer’s version which is more like ‘Lifestyles of the Rich and Famous’ and mostly unattainable.
Yup, I’m like you – I don’t need that much to be happy! That’s the beauty of learning to live on less. I do want to leave money for my kids, though, which is what is motivating me to save, save, save 🙂
Love this post!
I would agree that my definition of “rich” is pretty similar to yours. To sum mine up quickly: debt-free, wouldn’t necessarily need to work (but still would), ability to travel around the world, and knowing that I could afford any college my kids wanted to go to or pay for the wedding of their dreams without even blinking.
Yup!! Love this! We’ll get there one day 🙂
What a fun post! In my eyes rich is debt free, being able to put money in all the categories you so desire, taking time to vacation, not worrying about coupons, and having the hubby home instead of working so many hours!
We often have the conversation with the kids ‘What is Popular’? Is a group of kids really popular because they started an Instagram named ‘Popular Students at _______ Middle School?’ Lol!
Lol!! And I agree – I would love to have hubby home with us more!!!
My definition of being rich is totally similar to yours. When I can wake up and say “I’m not going to work today” and feel no financial consequences whatsoever, then I’ll know I’m there.
Totally agree!! I can’t wait for that day – but in the meantime I’ll enjoy the “now” haha 🙂
Very though provoking Sarah, rich similar to you is where I choose to work or work on what I choose to rather than working out of obligation to earn an income!
I consider being rich as more financial independence however financial independence looks like about 150K per year, costs of living are a bit higher here in Sydney. While I could comfortably live on half of that and still travel, I would want to give the option to a partner to not have to work either, although would be more than happy for them to work as well..
I’d then love to start giving back a lot more, forming a charity with like minded people and dedicate some of my “working” hours to growing the charity 🙂
Indeed, rich means different things for different people. For me, it would be ridding myself of all debt (student loans, auto loans, mortgage) and being able to give freely to other people, without worrying about how it will affect my bottom line. One day I hope to give to the younger generation in my family the way my grandparents gave to theirs.
Since I know lots of people who are way beyond the threshold of what I would have called rich and they STILL worry about money, I have decided that wealth is not a state attainable by the accumulation of money.
1) Any amount of kids is a lot
2) Am I at the beach with a cold drink? Or in a trailer with broken AC?
3) I agree with the Swedes- there is no such thing as bad weather, just bad clothing. When we moved to NC after a lifetime in FL and southern CA, I was cold all winter till I figured out about layering.
4) Depends on the layout. And how many people live there. But probably anywhere from 1000-1500sq ft.
5) Your ideal weight is the one that you don’t have to work to maintain.
6) As little as possible at a job you hate. Ideally I would not work more than 20 hours a week, but this is due to my husband working 60 hour weeks and also being a mom.
I think once I’m “debt free” I’ll feel rich. I think “rich” and “freedom” go hand in hand and having the freedom to do whatever I want with my money (instead of always having to give it to debt payoff) will certainly make me feel rich.
I think once I’m “debt free” I’ll feel rich. I think “rich” and “freedom” go hand in hand and having the freedom to do whatever I want with my money, instead of always having to give it to debt repayment, would certainly make me feel rich.
Totally agree!! I definitely don’t think you can be rich while having debt.