Friday, June 15, 2007

What's wealthy?

For that matter, what's wealth?

Those definitions surely depend on who's being asked, and how much money/property they have. I'd say wealthy starts pretty low: Maybe $100,000 a year if you live in a town such as mine, maybe $200,000 in a snazzier place, like Santa Monica. But you'd need assets, too, to meet my definition. I'm a little fuzzy on that; I guess if your expenses aren't high and you make $100,000 a year, you can get some assets pretty quickly.

How about $100k a year plus $250k-$500k in property/investments/gold bars under the mattress? Sounds good to me.

The Associated Press and I do not see eye to eye: An Anne D'Innocenzio story about spending on luxury items pegs wealthy at $350,000 and above. I think that's overkill. According to the comprehensive wikipedia entry on household income in the United States, about 1.5 percent of households have annual incomes above $250,000, and just under 16 percent are over $100,000.

Maybe the "real" number is somewhere in the middle.

Or maybe it's better to concoct a non-monetary definition of wealth, or one that combines dough with quality of life. And maybe *that* is just a strategy people who don't have a lot of cash use to keep up with the Joneses.


Johnny Yen said...

My household income, my wife's job and child support from her ex, and my two jobs are about $100,000 and we barely get by. We rent, rather than own, send our kids to public schools, and both drive used cars. And Chicago is not nearly the most expensive American city. I really don't know how people are making it on $10 an hour jobs here.

Holly said...

I think it's all a matter of reference point. By worldwide standards we are incredibly wealthy.

lulu said...

Certainly we are wealthy by worldwide standards. I have more shoes under my best right now than some people have in their entire lives, but by US standards, 100,000 seems really low. Location is huge. Like Johnny said, in Chicago $100,000 is not wealthy, at least not with a family. You certainly couldn't afford to buy property here on that kind of income, not without help anyway.

Alasdair said...

Sure, but that's why I included $250k to $500k in assets. And I did suggest that $200,000 would be appropriate in a "snazzier place."

Our property prices aren't low here, but Chicago is definitely snazzier than Walla Walla.

Here, $250k-$500k would mean you could own a nice home, free and clear. No house payment would leave a lot of money over for frivolous stuff.

Something I did completely neglect is to say *when* that amount of money would make a person wealthy.

I'm 35 and am currently the lone income in our household. If I made double my paychecks (I, too, have a second job) and had the aforementioned pile of cash, even the lower figure, I'd be able to think about retirement in my early to mid-50s. To me, that's wealthy.

Now rich, that's another matter. :)