Comments on: What Does “Wealthy” Mean to You?

By: MAPping Company Success

MAPping Company Success — Mon, 16 Jun 2008 10:20:45 +0000

[...] post on Yielding Wealth asking readers how they defined ‘wealthy’ reminded me of a post I wrote year ago about [...]

By: miranda

miranda — Tue, 10 Jun 2008 00:57:22 +0000

I agree that, depending on where you live, wealth has different meanings. And it should probably be taken into account with the different plans out there — which of course results in more bureaucratic red tape. At any rate, we are just seeing the horrific effects of an economy based on debt and the delusion that growth must always be significant and sustainable at hight rates.

I agree with Ren that having your assets work for you is a hallmark of wealth.

By: Ren Garcia

Ren Garcia — Mon, 09 Jun 2008 23:55:15 +0000

Wealthy to me is having earning assets that provide an income stream that:

can meet all your obligations
pay for some luxury
has leftover surplus to increase earning assets

i.e., your assets working for you rather than you working to earn income.

By: James Burns, Esq.

James Burns, Esq. — Mon, 09 Jun 2008 23:09:39 +0000

The marginal rates will rise and affect the wealthy by 15% and the social stratum climber by 50% just watch. I disagree that $250,000 to $350,000 is wealthy if you live in many parts of California it is just getting a leg up after your expenses to finally start putting something away for a child’s education and retirement. The perfect storm is coming and if Liberalism has its way, it will take 8 or more years to purge the horrific effects of it.

By: miranda

miranda — Mon, 09 Jun 2008 21:29:07 +0000

You make a good point. Sometimes, how long you have had your income can make a big difference — as well as where you live. $250,000 doesn’t really go that far in California, but it can go extremely far in the Mountain West.

I think, with personal finances, the goal should be to live within your means and work on building wealth.

By: thebaglady

thebaglady — Mon, 09 Jun 2008 21:19:45 +0000

I wrote about the same article recently. I don’t think it’s easy to say that $250k a year in income is wealthy. It does depend on where people live. Here in the Silicon Valley wealthy is really really wealthy. Most people are just middle class. My parents made over $300k last year, but half of that was taken by taxes. Are they wealthy? Not really because they are immigrants that just started working here 10 years ago. Compared to people who made $60k a year for 40 years and saved all that money, my parents aren’t wealthy because their high income is fairly recent. So I think Obama should really split the difference between wealth and income.

By: Vered

Vered — Mon, 09 Jun 2008 20:35:42 +0000

I basically agree with you, that you are wealthy if you are able to allocate a chunk of your income into savings or investments, rather than living paycheck to paycheck.

By: Miranda

Miranda — Mon, 09 Jun 2008 19:37:14 +0000

Thanks you two, for chiming in!

Jean is ably demonstrating the difference between a budget mentality and a net worth mentality. The net worth mentality is more likely to result in wealth.

I agree that there are different definitions. I do like the idea of looking at the stats. Someone who only makes $48,000 a year is going to take a bigger hit from 4% inflation than someone who makes $250,000.

Gas is a good example. If it costs $800 more per year to fill up your gas tank, it costs that much for everyone. For the $48,000 a year income, thought, that is 1.76% of one’s yearly income. For the person who makes $250,000, it’s only 0.32% of the yearly income. If you make more, you are better able to absorb the costs.

By: Jean

Jean — Mon, 09 Jun 2008 18:25:19 +0000

I would add that the definition of wealthy includes the ability not tothink about the cost of things you want/need. Someone once said, “If you have to ask the cost of that yacht, you can’t afford it.”

Wealth is an accumulation, not a monthly/annual income. think of it as a pond, into which the stream of income goes. The bigger the pond, the more wealth. So to be wealthy means that the pond would never get drained, no matter how long you lived.

jean

By: Miki

Miki — Mon, 09 Jun 2008 16:48:18 +0000

Although the idea of wealth is relative I agree that the stats should define it.
I find that there are two distinct definitions of wealthy—
1. Can I supply my needs and indulge most of my wants?
2. How do I compare/surpass my neighbor /colleague/sibling?

Rarely do people who depend on their paycheck consider themselves wealthy.