What is the financial benchmark to be considered rich in America? $100,000? $200,000? The proverbial "One million dollars?"
What is the financial benchmark for one to be considered rich in America? $100,000? $200,000? The proversbial "One million dollars?"
For that matter, how do people define “rich” (monetarily speaking; not in the It’s a Wonderful Life sense of having friends, family, health or job satisfaction). The Mirriam-Webster dictionary defines the word as “having abundant possessions and especially material wealth.” What would you call “abundant?” Wall Street Journal reporter Robert Frank, in his book Richistan, wrote that "people's definition of rich is subjective and is usually twice their current net worth.”
We asked more than 1,200 investors what they considered to be the minimum annual household income it would take for them to consider themselves rich. The highest percentage (38 percent) said at least $450,000. The second-highest percentage (19 percent) said $250,000.
The fiscal cliff deal reached at the beginning of January may have established $450,000 as the new definition of wealthy. The compromise bill raised tax rates for families earning more than this amount ($400,000 for individuals). The median U.S. household income in 2011 was $50,054, according to Census Bureau figures.
When asked which best describes the minimum wealth level to be considered rich, the highest percentage (27 percent) of our surveyed investors said the proverbial “1 million dollars.” Eighteen percent said $2 million, while 16 percent said $5 million.
As Frank, noted, personal definitions of rich and wealthy are subjective, especially across age levels. Surveyed investors under 40 were significantly more likely than their older counterparts to consider $1 million to be the minimum wealth level to be considered rich. Forty-five percent cited this figure, compared with 22 percent of investors older than 60.
Conversely, a higher percentage of oldest investors considers $5 million as the minimum benchmark to be considered wealthy vs. 11 percent of investors under 40.
The youngest investors would also be more likely to consider themselves rich with an annual household income of at least between $100,000 and $200,000.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.