How Much Money Do You Need to be Considered Rich?

Although I’m back home, you’ll have to bear with me while I get back into the swing of things. I haven’t had a lot of motivation to blog lately.

According to this week’s Barron’s (UPDATE: here’s a free version of the article), it now takes a net worth of at least $25 million to be considered “Beer & Pretzels rich,” which is what Barron’s considers entry-level rich.

Think about that for a minute. A net worth of $25,000,000 should easily be able to kick off an income of $750,000 per year at 3%.

I think “rich” is a frame of mind. Personally, I would be happy with a net worth of $5 million (not including home equity). Sure, I could make it on a lot less, but $5,000,000 would give my wife and me enough income to be able to enjoy the things we like.

What about you? How much would you need for you to consider yourself “rich?”

Oh, and in case you’re interested, here’s how Barron’s breaks down the rich:

48 thoughts on “How Much Money Do You Need to be Considered Rich?”

  1. Being rich is a state of mind. And good grief, $1 million @ 4% is $40,000… after tax, what, $30k? If I had $30k and didn’t have to work for it, I would consider myself rich.

    Talk about keeping up with the Joneses!

  2. I hope to have over $5mm when I retire, and would considder that fairly rich. I’d say that is more the type of beer and pretzels rich. $10 mm would definately be righ to me. $25mm to me would be considerred LOADED.

    Living in a moderate size city in the midwest, a $750k house is pretty much the top of the line.

    Now, I’f I lived in new york city where you have to spend millions for a nice place, then maybe $25mm IS the right number.

  3. Does anyone know how to read the barron’s article with out a subscription. When I click on the link it’s asking for a subscription.

  4. I agree, rich is purely a state of mind. Having enough money to do whatever you want to do. You can either want a lot and earn a lot, or want a little and earn less. If your idea of doing what you want is living in a cabin in the sticks and fishing all day, you can do it for a lot less that if your trying to live the high life in Manhattan.

  5. I love the notion that “get serious about philanthropy” only happens at the plus-50 million range! We’re doomed!

    I think JRich is on the right track– it’s all about context. I live in Tennessee, and it would take me far less than $10 mm to retire for good (but I live pretty cheaply anyway). I can’t imagine living in Manhattan, where I’d feel like a poor boy with that in my pocket!

  6. I am shooting for 2.5 million to retire with. I was surprised to find out that for it to actually last thgroughout 35 years of expected retirement, it will grow to about 4 million, and then deplete as the years go by. So even 4 million wouldn’t really be “rich”, just would let us live comfortable without worries in retirement. Wow. So now I guess I’d have to say anything over 5 million would increase our lifestyle of generosity, so that would be rich in my book.

  7. A decade ago, I would have said $3 million, but now I would say $9 million is my target figure. $25 million seems a bit much to me, but then, I don’t have expensive habits of choice. As long as legitimate medical care is hard to find at any price, and not provided to every citizen by default, one needs quite a bit of money.

  8. $5M sounds right to me – certainly enough for two homes, one in an expensive area, and one in a resort area, and enough that my wealth would continue to grow without effort. Of course if you have to live in Beverly Hills and Malibu, that wouldn’t begin to do it, but that isn’t really about living but about impressing others, though to many, that is what rich is all about.

  9. Homer Simpson:
    Gee Mr Burns, you’re the richest man in the world! You own everything!

    Mr Burns:
    Yes, that’s true, but I’d give it all away to have just a little bit more.

    How much? Just a little bit more! 🙂

  10. Right now I’d feel rich simply to have my student loan paid off and 2 years living expenses in the bank. Why? So I’d feel free to take a chance going entrepreneurial.

    Otherwise, I’d feel rich having enough in stable investments that allowed me to meet expenses off the interest.

  11. Good grief, people!
    On the world scale: if you have a roof over your head, access to clean water and medical care, and know where your next meal is coming from – You *are* rich. $25 million is far, far more than anyone needs.

  12. As a 20-something young entrepreneur, I was personally disgusted by Barron’s comments on philanthropy. “Serious philanthropy” is an approach to life and is not so dependent on the amount. It should be a foundation for any business or individual, whether just starting out or considerably further along.

    As for being rich, I heard economist Robert Reich once say that being rich was being able to buy whatever you really wanted, whenever you really wanted it. This seems like a workable and flexible definition. (Incidentally, he was talking about the absurdity of the current economic stimulus package giving $600 to people who are already rich, saying it won’t exactly encourage them to spend…)

  13. Moneymonk posted a quote recently that sums it up “There are two ways to be rich: one is to have great wealth, the other is to have few wants.”

    I could live easy breezy with all my needs and wants satisfied on $2.5M, or $100,000 before taxes, ESPECIALLY if I had my mortgage paid off. And that’s in Dallas – if I wanted to live happily in Mexico or rural AL (where I’m from) I’d certianly need less than $1MM.

    My personal goal (mainly because I’m so young) is $250,000 of passive income a year in today’s dollars (this assumes I have a family to support). I plan to reach it by the time I’m 50 or so. $10MM net worth (including home equity) is my goal mainly because by the time I reach it $10MM will be worth a lot less than it is today.

  14. Since I’m so young I haven’t really thought about an amount of money I want to save. I’m mostly trying to pay down debt and save a little for a house. I never thought $25 million would be considered poor rich. I guess I need to get moving if I want my giant yacht.

  15. Since I’m already in the 7-figures (in my 40’s), I recognize that my view is going to be quite skewed. Believe it or not, I don’t feel “rich”. Most of my assets are not very liquid, so I cannot live off of them yet. I still need to work to maintain an upper-middle-class lifestyle. I also live in a high-cost city (though offset by the availability of well-paying employment).

    Rich to me equates to not ever needing a job again in order to maintain a relatively luxurious lifestyle. By luxurious, I mean owning at least a couple of nice homes, being able to afford a car w/driver, and flying private. Also means having a crew of domestic help and a house manager/personal assistant to handle them. And means sitting on some swanky charitable boards – the kind that have a $50K annual give or get policy.

    At my level, I can have and do some of those things, some of the time, but not all of those things all of the time, and certainly not without the benefit of a well-paying job.

    I know people up and down the spectrum, on up to about $1Bn and I think the kind of wealth that gets you there, starts at around $15mm – $25mm, depending on where you live.

    Don’t get me wrong, personally, I don’t need all that to be happy. I’m already pretty happy. My goal is to reach at least $10mm, more for the financial security, and the ability to use the money to make a difference, than for the lifestyle. Other than having to get up and go to work everyday, I like my present lifestyle just fine (only 1 home, no car, no chauffers, no domestic help, no private jet). And I even like my work – a lot – I just would prefer if I could set my own schedule and run my own show. And someday I probably will.

  16. It’s all relative, and it will also probably change over time as Yana observed. As others have also commented, lifestyle and geography will obviously be factors. Many of my colleagues, at least those willing to talk, have not really focused on a number, to qualify them as being rich, or really to be able to retire comfortably. It’s certainly one thing to be able to maintain a certain lifestyle while a large income exists – being able to maintain a similar lifestyle without that earned income (not from your investments) is what requires life planning to improve your net worth over time. Actually, if you are living just a comfortable lifestyle on $250,000 to $300,000 per year, then you will probably need at least $5m to throw that off in earnings, and you’ll need a great market to keep your investments on track, and that is not rich in my estimation.

  17. Being Rich is the ability to live the lifestyle that is comfortable to you without ever having to work again if you dont wish to.

    The list shown above in the post… 25 million is “poor” rich? I think this Barron’s dude believes that you have to be able to buy expensive junk that you dont need, and most likely will impulse on and lose interest in after a while, just to impress people you don’t really like. If that is what it takes to be rich, i’ll pass.

  18. I feel that $25 mm is far more than beer and pretzels rich. I would say that in the 2-5 mm would be beer and pretzels rich. I believe that to be considered rich you have to be able to retire at an age less than 60 and not half to worry a day past that. With this in mind I feel that if you have a steady income of around 200-300 thousand a year with out working I would put you in the Beer and Pretzels rich catagory…..

  19. Rich to me is being able to quit working if I really wanted to. Also I’d like to able to eat out a few times a week. My pastimes are few and mostly amount to video games, movies, and internet. I’m trying to save up $1mil and then quit working.

  20. my opinion 1million dollars is not alot of money. I say Barron is right. He knows what he is talking about. My objective is to be a multi billionare but im about a quarter way. I guess i need to cut my spending. Invest wisely and you will be a millionare. I started with a 163 dollars and now i am making around 1,200,000 a year. My opinion to all of starting out is to invest wisely. these are tough times now. so watch your spending.

  21. I really love post 9. I am still lol. That 25 million remindes me of F. Scott when in 1924 he wrote a book entitled “How to get by on 36,000. a year”. That is like almost half a million now. Yeah better start clipping coupons. I think we are being made fun of. Rich to me is not having to worry about money. But once your investemnts get up high enough then you have the added worry of losing alot or not gaining enough off them to keep up with inflaion. $25 million seems like alot of money the way 500,000 a year seems like alot. The rich know this. Never spend principal darling.

  22. Rich, not on the $27,000 a year this poor ole redneck earns, and to think, my neighbors think I’m doing well! Rich is a joke for most of the world anyway.

  23. So why do Buffet, Soros, Gates and that crowd seem to always be for increased income taxes? Because they’ve got theirs and it would be virtually impossible to spend or lose it – they will be rich forever. So, why not a tax on assets? I think a conservative estimate of the amount of revenue this would generate might be enough to pay off the national debt and give the poor people a little spending money. ( I can hear Buffet, et. al. squealing now – that’s communism, we want socialism.)

  24. Most people are too materialistic. No amount is enough. Even they are blessed, they still complain. That is human nature … unfortunately.

    For me, I am rich if I have a roof over my head, warm meals, clothes to wear, healthy and have peace of mind. The most important thing is to be giving …. not always wanting more and more. How much are you giving to help those in need is what is more important than being greedy. When we die, we can’t take the millions along with us. Who knows, we might be fighting against death because we have too much material things and money left behind?

    Ask those people who have won lotteries? Read about their testimonies. Most of them said they were happier before winning the lottery. Money is the roots of all evils. So having lots of money will attract alot of evils. The cost is to forgo peace of mind.

  25. to be hollywood rich you need at least $30 million. That's the three homes, top private schools, parties, fashion sprees at gucci and prada, and cars.
    to be rich by the elite standards you need over $200 million. And that doesn't get to much attention.
    How is this possible?
    I lived in manhattan, nyc (one of the richest places in the world) so I saw wealth. But where is all this money coming from?
    In NYC, and even in wall street, most people including the ivyies could never dream of making over $900,000 a year. Investment bankers at wall street makes $250,000-$600,000. A corporate lawyers makes $160,000-$700,000. Top neurosurgens makes on average $500,000 (the highest paid doctors).
    These individuals all went to the best colleges and they are the best of the best. They are at the top of the income pyramid.
    Still they can't afford most of the condos and co-ops in the Upper East Side or SoHo (in manhattan). Prices there start at $1.5-$20 million. Someone with those incomes can't afford that. Take into account taxes and maintainese. In co-ops you have to pay an extra fees.
    So where do all those millionaires and billionaires come from. They can't all be CEOs or Chief Executives. There isn't enough them to fill all those new upper class high-rises in manhattan.
    It is not only in Manhattan. Go to areas in Long Island they are filled with mansions like the hamptons. Including New Jersey and Upstate New York.
    The same is true in London, Hong Kong, Monaco, Milan, Aspen, Tokyo, Los Angles. They own vacation homes in the Hamptons, Caribbean islands, Brazil, and Europe. They are all located in villas with prices starting at $1 million. Unbelievably, there is not enough supply even at those prices for those second homes.
    There is just about 200,000 super rich individuals in the world. They can't all possibly be buying and renting all those ultra-expensive mansions and penthouse (over $10 million) all over the world. Even if most of them own more than one house.
    They can't all be CEOs, Executives, or the children of the ultra-rich. Most of the money is self made. So where is all this money coming from?

  26. Before I even read the article my number was around 30 million! I figure at that point I can pursue any hobbies that I want and travel the world all while maintaning a few beatutiful homes and some nice cars. I have about 1.5 right now in investments and real estate, but I still work an entry level 9 to 5 (basically because the health care package is amazing… sad isnt it?!) I am only 22 so I have a while to reach my goal, but I am fully aware that working for someone else is NEVER EVER going to get me to that number. So I will have to branch out on my own at some point in the very near future! Wish me luck!

  27. What? Are these posts for real? What planet or distorted thinking/world do you all live in? This article points out the less than 1/2 of 1 percent of the population. Not everyone, or even 2-3 percent of the people can get there. If they could all the numbers would again rise. Ben and the boys would do some more QE and pretty soon we all would have to be multi-mills just in order to maintain the plebian life we are purported to have; according to that elitist article.

  28. In late 1999 or ealy 2000 Barrons had a similar article. The beer and peanuts was 2 miliion, limo rich was 5 million, airplane rich was 10 million.

    Forward to now…. beer and peanuts is 25 million?
    It’s a sad joke if people really think this….if so, then we are in for a much bigger financial collapse as folks (like some of the commentors) try to claw and step over others, climbing their way excessive materialism. This greed is why we have this current collapse.

    Rich is knowing that you are contributing to making the world a better place and having the ability to do so. Those who are stuck in the feeling of never having enough (basic animal program) will not have enough with 25 million. The houses, cars, airplanes, etc. will make them feel empty if their actions are not of some use to others.
    May you never thirst.

  29. 1975: “If I ever have $1,000,000 in the bank I’ll be living on easy street.”

    2010: “Hey, who moved the street?”

  30. One thing all should factor into any long term planning is catastrophic loss. If you retire at, say, 60 and plan on living 40 more years then it is quite likely that you will live through a period of catastrophic loss that could cut your investments in half. For this reason, your magic number is higher than you think it is. I’m *not* saying that number must be $10 MM or some ridiculously high number (w/o significant inflation), but whatever your number is you may need to double it to be sure you’ll have $ til the end.

  31. If you have good health and no one else in control of your life, your rich now. Rich is not feeling poor, because feeling poor is not desirable. We can always want for more. But not having to want is a comfort and a bessing. Having an nest egg is like an insurance policy on not becoming needy. Being able to have all you need and then being able to give to others that are in need makes us feel rich inside in a special way. And it help us to have a happy life. Everyone has to decide what is need in their life to make the feel rich, because thats what it is. If you don’t rich you need to find what would you make you feel rich. And if you have millions and still aren’t happy. You may need something that money won’t buy. Because money won’t buy happiness. Find your passion and seek it and work for enoug money to get you there. And you will be filthy rich for the rest of your life.

  32. Money is the measure we use to quantify being rich but being rich can have meaning that goes beyond money. Having good health is priceless and if you have lost your good health your fortune will follow.

  33. Rubbish! 300,000 in savings that generate 18K from .06% interest plus 24K annual SS income makes about $45K income. I can do quite nicely on that living in a paid off home. Where is may math bad?

  34. I guess I need a job, lol. How much do I have to make to get to be Beer and Peanuts rich? And, by the way, the S and P is flat from 2000. Now I dont know if thats the high side from early 2000 or the low side from the end of 2000 after the crash but somehow it seems you shouldnt expect to get rich from the stock market either. So, no job, no stock or real estate investment and no savings bank account is going to get you rich? I guess I’m with the other guy who asked where all these rich people are coming from. Hedge funds? Is gambling the only way to get rich? Particularly with OPM, lol. Or perhaps politics and lobbying, celebrity and punditry are the way to go. Help me out people. How do I get rich? I dont think social security is going to help.

  35. I agree with Ferdie Fussbidget.300.000 to 1 mil.and a paid off home is all you need.As long as you don’t get stupid !

  36. Don’t believe everything you read. Do you really think that anyone making “real money” is posting to this blog?

  37. Rich is a moving target perpetuated by those in the financial industry whose self interests they are truely meant to satisfy. The bar keeps being raised so that those approaching their target net worth or financial goals are made to feel financially inadequate. People are made to feel they need to continue to save & invest or risk running out of money in old age or not being able to provide for their families.

    If the majority of investors were successful in reaching their financial goals then there would be a significantly reduced need for the services of those pedaling this non sense. You have to keep in mind the source of the information being pedalled. I feel the question that needs to be asked is, Who benefits by the pedalling of this non sense? Whose better interests are really being served?

    I would place more credence regarding this topic, if the source of information was coming from a cross section of current retirees. These are the ones that can advise the rest of us based on personal experience as to what actually translates into rich! There is very little information eminating from a source like this. Ever wonder why?

    It is obscene to think that in order to be classified as “beer and pretzel” rich you need a minimum of 25 mil. These unrealistic levels of wealth and expectations are meant to keep us working, saving, investing to satisfy the motives of those disseminating this information. In whose interest does this serve? I say, Those in the financial industry pedalling this non sense. They have an interest in keeping us on a financial treadmill, like gerbals on a running wheel, never able to attain or reach our goals or the end as the target or goal is continually moving.



  39. I live in Canada and I think that when I retire at around the age of 50 2 million would be enough. Seriously what are you going to do with 25mil. If I had 25 mil i would donate 20mil and keep the 5. You should think about how people live in poor countries. Some of them make under $1000 a year and all the child labor that’s going on. We should be more considerate and help other people out instead of wanting to buy million dollar houses and have servants that cook and clean for you. I also read another comment how the person wanted to have a private jet..?? common are you kidding me. Is that even necessary. Your not gunna die just because your on a plane with a couple of hundred people.

  40. i agree with Bart. People have to stop trying to catch up with their neighbours by buying 52inch tvs and all the crap they don’t need. Just live your life, enjoy it, and help some people out along the way because when you get old you start thinking about all the things you could of done when you were younger. And when you die, your not guna take all the money with you so donate some and help the people in need.

    *GoD Is WatchinG YoU!*

  41. Being rich is entirely a state of mind…no amount of money can be said to be enough..its human nature to like more and all melts down to values and what you think is important in your life! I know happy people living their lives happily though they dont have the figures quoted above….

  42. I am 45, still work on a US salary but have luxury of moving from exepensive city in US to living in Mexico. I live in a 5 bed villa, taxes are $300 per yr, and expenses about a 1/3 of US at a very high level. You can retire on a million,maybe 1.5 but need to think differently such as moving, cutting expenses, etc.. 10-15 mil is laughable and unrealistic.

  43. when i was 18 i went to university for 3 years then got my degree and started working at bank getting paid 25k a year. each year i would put 15k in the saving account and when my saving account reached 100k i quit my job and went back to universy to get a phd. it took 4 years and then i got a better job getting paid 30k. but in 1 year i started climbing the ranks in my hob and got a position for 75k a year + bonuses. when i reached 1m dollars while still working i started flipping stocks (short term investments). that was almost 10 years and i kept investing untill today.
    7 years i had enough money to quit my job.
    as of right now i have 325 million USD in my bank account, though i keep investing daiòy (takes 5 minutes a day), i have wife and 6 kids and i enjoy life very well
    if you want a tip, just be patient and save all your money

  44. Well, i’ve read most of the comments, i live in the Middle East a country called Lebanon, Beirut and we are a third world country with a minimum wage labor of 400$ per month, i’m in a top university in the middle east majoring Int.buisness, when i graduate working in lebanon means getting payed at most 1,800$ and you don’t reach far unless you were “Already living the life” or “Dealing” that is amazing, however to live the rich life means getting payed at least 5mm per year. So, its kind of the same concept but the other part of the world finishing your degree means getting payed 30k/year minumum from start. Sweet! And still you excpect more if you work hard not like here you work ur ass off to get a salary of 25k/year and that is at least till you reach 30-33,adding that u have a debt of 300k for5 years to live the easy life. Well we want the same thing but unfortunately as much as i love my country and trust me if we have your opportunites never, if you have ever been here u’ll know, the only thing destroying our living is because the huge control of other “countries” on our living starting by the U.S. going to Russia even Iran adding France should i continue, its a 10452km common we are considered a city in the U.S. Thank you for your time i’ll be seeing you soon i got a 3.5gpa goin there for masters anybody who wishes to hire me im ready i got experience.

  45. The definition of Rich is, some who has enough money to live an infinite number of years without working. So that leaves it as a broad definition. While one person may be happy with 30,000 dollars a year of residual income from their nest egg another may feel more content with that amount a month, or week. It depends on ones chosen lifestyle and needs. Someone can have a lot of money but not be Rich, if not invested properly and your lifestyle exceeds your residual income, then you’re a person with money going broke.

  46. I have a wife of thirty years and two grown daughters who love me. We all have shelter from the weather, food when we need it, good friends, and the health to work and earn a living. I have a place in my home to go to in those moments when I need to be alone and pray. I think I’m rich by the standards of the world, but maybe not so much in the eyes of those who read “Barron’s.” (which, personally, I only read when I’m in the mood for some fantasy literature. This always happens when I find myself in my doctor’s waiting room.)

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