‘Experts’ Say Consider Yourself Rich if You Have $5 Million

In light of our discussion last week on the definitions of “rich” and “fair,” I thought I’d share this article by Bard Hem and L.M. Sixel that I read over the weekend in the Houston Chronicle:

For some it might be $100,000. Others might say it’s $1 million, $5 million or even $100 million.

Or maybe it’s simply having a happy family.

Never mind the back-and-forth squabbling between presidential candidates John McCain and Barack Obama over who owns what and how much, there doesn’t seem to be a magic number that universally defines “rich.”

I really like this quote (emphasis mine):

“It’s really in the eye of the beholder,” said Mike Kreach, chief investment officer at Houston-based Amegy Bank. “Basically, the less money you have, the less money you think you need to become rich. The more money you have, the more money you think you need.

That is so true. I remember when I was a kid, I felt ‘rich’ when I had a $10 bill in my pocket. Granted, I was a kid and didn’t know any better. I remember when my wife and I first got married, ‘rich’ to me meant a lot less money than it does now. Bottom line: wealth is relative.

Finally, think about this: An income $47,500 in the U.S. puts you in the top 1% globally.

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: