San Diego Housing Bubble News and Analysis

According to the SEC, your rich if you have a $5M Net Worth (not including personal residence). At that level you are considered a "Qualified Purchaser" and can legally invest in Venture Capital funds.

Alex,I've heard "rich" defined as not having to work for your money but being in the position of your money working for you.

Sounds good to me.

Personally, rich = financially independent = retirement. That doesn't mean that they don't work, it just mean they can quit anytime and still be able to live their current life style. It also means when your $ is working for you and not you're working for your $. I think someone who have a monthly expensive of $2k, a modest job and $1M in the bank, which is more than enough for them to just live off the interest, is richer than someone who have $10k/month expense making $200k/year but not much in saving.

If you have to ask how much something costs, you aren't rich.

Rich is having children I adore as well as the time and freedom to enjoy them. The rest is just window dressing to me.

I've heard "rich" defined as not having to work for your money but being in the position of your money working for you.

I'll go along with that too. However, for me, the process of making my money work for me (investing and managing my business) is fun. I'd like to see it one day go from 50 hours a week to 20, though.

As for worldly goods, where you draw the line between rich and not rich depends on the person. I have no desire to own a casino or 200-foot yacht, but 3,000 sq ft on a half acre with an ocean view and a GT2 in the garage would be nice.

I don't know but I am pretty much a believer that as a primary value, it is the wrong one, if the definition is mostly connected to currency or saleable items.

I like sdr's definition. I think or feel I am rich for those reasons and because, with my upbringing, I should probably not be in a position to have my life be a good as it is by several measures. In otherwords it is about attitude.

I'd be willing to wager that the definition of "rich" vary greatly among different age groups. When you're starting out in your career and don't have much, you tend to clamor on material goods, but once you're older and have enough, you tend to see the finer things in life.

Shopping at Whole Foods?

I'll go with that definition. If you can afford to buy all your food at Whole Foods, then you are rich.

If you can fill up your RV without getting pissed off at any of the following: the gas pump, Big Oil, Big liberal dems who won't allow drilling in Anwar, anyone in the middle east or anyone in Congress - then you are rich....Especially if you can do it while reitred and living off your passive invesments..

rich only has meaning in relation to the other people around you. we are all kinda rich nowadays and hereabouts, considering the amount of energy we have at our disposal, the good booze and food we can generally easily buy, indoor plumbing and mechanical marvels of all types, relative to the relative poverty of even the wealthiest in prior generations. On the other hand, a lot of us are also kinda poor, in a lotta ways, in terms of anxiety and purpose and family bonds and even just plain old positive net worth. so I would say, if you have to ask what rich means, it's not you. but i'd also say that people who go around saying i've got a "rich' attitude so I'm rich? umm, they're not rich either. Since I tend to go with the "rich is defiend by relation to others and is only the top of the heap", and it's local not global, it can only by definition be a small slice of the population who can commands extraordinary amounts of energy and resources with however they happen to be holding their wealth. So we're all rich and all dirt poor, depending on how you wanna spin it.

Drink Heavily.

Being rich means your name is Richard and you want to shorten it without being a dick.

My observation:
When you travel with family, you buy first class plane tickets (not upgrade or use frequent flyer miles.)

Simple definition for me:

Rich= A family's net worth (after taxes, depreciation,outstanding obligations) = $20million+ in present day dollars. Of course, this number goes up as the dollar weakens.

$20million after tax assets earning a piddly 5% interest rate each year would be about $1million in pretax income, half of which would end up going to uncle sam, which by my book would be enough F.U. money to support a family without having to work full time for someone(s) that you normally would not want to do.

I don't equate one's salary to "rich". First off, it's more about how much one keeps than earns. Two, salaries come and go. Three, several CEO's have a $1 salary, but are sitting on a pile of equity (which by the way probably means they don't end up having to pay social security taxes, SDI,etc, because that comes from W-2's.)

One of these days, my company will be bought by google or the like and perhaps I can relate (yeah right).

selfportrait

----- Sour grapes for everyone!

When you travel with family, you buy first class plane tickets (not upgrade or use frequent flyer miles.)
How about, when you have your own private jet when you travel so you don't have to even sit in first class :-D.

From a monetary standpoint, I'd echo the $5MM net worth figure mentioned as a minimum for being considered "rich."

Many, especially in Shallowfornia, (I've named it this, and I'm a native) like to give the "appearance of wealth," but if you knew their net worth, you'd fall on the floor laughing.

For me, net worth is about being able to live the life I want to live--enjoying a great home, a great career, a loving family, friends, and life itself--without worrying about finances.

I think many people in this thread are defining "happiness", while the original poster's question was really about monetary wealth.

I am rich in peanuts.

AA,

There is one thing I think is evident. You can't judge how "rich" a person is based on the appearances alone. I'll add the flip side of the coin.

My old manager bought his CV home about 8 years ago for a few hundred thousand and now the house is worth over a million. I wouldn't consider him rich since he makes about $80k a year and his wife stays at home.

The fact that your old manager can live in CV on an $80k single person family salary to my mind means that obviously he's must be doing something right :)

selfportrait

----- Sour grapes for everyone!

This question shows up on this board about every 6 months or so, and so far CBad has the best answer I've seen :-)

"Being rich means your name is Richard and you want to shorten it without being a dick." - CBad

Being a multi millionaire with 2 or more million liquid (less property) is rich in my book.

"I think many people in this thread are defining "happiness", while the original poster's question was really about monetary wealth."

My post might have influenced this view. I think I was talking about "rich" in the only way I believe it exists while thinking that people with various sized wallets and collections or stuff could have it.Actually I thought this is what the OP was asking? Darn bias.
If the OP's question was "what do you think is a really big collection of money and stuff?" I would say "500 million bucks, mansions on both coasts and 13 fine cars of all vintages".

riches

In the book "The Millionaire Next Door", there is a metric for determining how well you are doing financially.

Age x Gross annual income / 10

If your net worth is twice this number, you are a PAW (prodigious accumulator of wealth) and can be considered rich.

If your number is half or less you are an UAW (underaccumulator of wealth).

Those who are PAW's are generally rich, but do not necessarily look like they are rich. But their financial position is basically what most piggs here are aspiring to be.

The UAWs are the ones we piggs are generally disdainful of, those who look rich, but actually are in a financial hole.

I highly recommend reading the book.

Love the Rich/Dick response. My favorite is the one about family and children. Financially, I prefer to think of a person who is financially independent and does not need a job to support a comfortable lifestyle.

If you want to limit it to just $$, then here is a cut-and-paste of my response to a previous thread started by somebody else titled "I think this just kind of belongs here."

_____________________________

My answer is $20M. As I have said before, "rich" to me means complete financial independence to support a societally lavish lifestyle. Rich in the media is the lavish lifestyle. Rich is not "comfortable" or "well off." Rich has special meaning to me and connotes something far more than making gobs of money. That is simply someone well off.

That is not to say if you make $2M/yr you are not increadibly well off and lucky. You are. But you can also consider yourself lucky to make $30k/yr if you compare your financial life to somebody more poor than you, or less "rich" than you. Everything is a comparison, whether to people with hundreds of millions of dollars or people making 10 cents a day in a third world country. Without comparison, the concept of "rich" or "wealth" or "poverty" would have no meaning. So "rich" is indeed a relative term and, to me, it has a very high water mark to be used properly.

I would say IMHO a U.S. stratification as a rough starting point for an "individual" not a "household" is

billionairs (>$1 billion liquid net worth)

uberrich (>$100M liquid net worth)

rich, (>$20M liquid net worth)

wealthy (AKA "Working Rich"), (>$5M liquid net worth)

upper class, (>$1M liquid net worth)(Millionairs)

well off, (>$500k liquid net worth)(top 1% mark)

upper middle class, (>$100k liquid net worth and >$150k/yr)(top 5% mark)

middle-middle class, ($50k-$150k/yr)

lower middle class, (under $50k/yr)

upper lower class, (under $30k/yr)

lower class, (under $20k/yr)(bottom 20% mark)

poor/impoverished, (under $10k/yr)

third world stratifications.

For a household of 2, multiply levels 3-13 by 1.5, for a household of 4, multiply levels 10-13 by 2.

For the first six, you measure by net worth only. For the next one, a combination of income and net worth. For the rest, by income only. That is because 95% of Americans have a negative liquid net worth. The first 6 classes above represent the top 1%.

Of course, take what I say here with a grain of salt. This is just my particular view today off the top of my head as a point of dialogue. Any apparent precision is an illusion. Note that lots of income in the "lower class" include students working at McDonalds etc, or top 3 B-school students putting themselves through HBS, GSB, or Wharton.

More importantly is that most sought after mongram "financially independent" which can be had IMHO by anyone in levels 1-8, which I have said before, is a different and arguably much better type of "rich."

I dont believe I am confusing happiness with monetary wealth. I believe where you stand depends upon where you sit.

I grew up in a very upper middle class area back East. It was at least as wealthy as Carmel Valley if not more so. When my wife and I were in grad school we rented a home in a lesser area. One of her friends commented that we lived in a "white trash area". My response to her friend (besides being appaled she would use such language) was that most of my friends considered her to be white trash based upon where she grew up.

My best friend then married someone from the upper class area. She wouldnt live in his hometown because she considered it a lesser area. Being rich is all relative and depends upon your expectations. If you have enough money to enjoy your life on your own terms, you are rich in my book. The rest is all window dressing.

Rich is a relative term: the scale isn't in dollars, it's measured by how many people are below you. And If you're richer than 19 out of 20 households, you're just plain rich.

If you feel your top 5% income (minimum of around $166K) leaves you in the middle class:
a. you're doing it wrong. (I couldn't find a good statistic for the cutoff for the top 5% household net worth). If you want to feel rich: don't have kids, don't get sick, and don't get divorced.
b. Lower your expectations. You're just rich, not ultra-rich. Sorry.
c. Think about how you would be getting by on an actual middle class income, say the median ($48K) or double the median ($96K) income. I know it's shocking and unpleasant to imagine, but somehow people do it.

If any of you have ever traveled to developing countries, you will soon realize that most of the people in the U.S. are 'rich' to some degree.

When you get up close and personal with dire, horrible poverty, it hits you between the eyes. Or it should.

Seeing see sick people who cant afford simple medical procedures, or food to keep their families alive, made me realize that decisions like "BMW or Mercedes" or "Gucci vs. Chanel" are, in the grand scheme of things, ridiculous.

For example, in many parts of the world a simple cataract surgery would cost about $200 - but many people die everyday because they dont have access to this kind of treatment and cannot provide for their families.

In 50 years, will it matter if you lived in Derby Hill or RSF or La Jolla? Probably not. Will it matter if you restored eye sight or provided vaccinations to 50 people? Absolutely.

I dont mean to be on a soap box, but I think people are as rich as they want to be. I know many people who have millions of dollars and are not "rich" at all. They are actually miserable and unhappy people. I've met families in developing countries who have very little but are genuinely, insanely happy because they have loving families and food in their bellies.

So, now that I've spouted off my opinion(s), if I had to define "rich" I would say it would be having enough money to provide for my family AND have enough to make an impact on the world - to make a difference.

Then again, I'm a bleeding heart liberal (although my husband thinks I'm a socialist).

dharmagirl, good point. I often complain about the US and there are certainly things that need to be changed, but when you consider other countries, it's a nice place to live.

My definition of being Rich is - having the foresight and guts to put up a web-site that puts the reality in real estate! ;)

I thought of a question once - if you had a trillion dollars, and woke up one day and realized you for whatever reason that last person left on earth, so really you had all the money in the world. Would you have any problem giving up that 1 trillion for a friend?

I'll dispense with any rich vs. happy comments and focus on the question - what is the definition of rich?

To me, being rich is all about having the freedom and control over your life to do the things you want to do, no matter what that is.

I don't think about being rich in terms of what you own or posess. It is what you can DO that counts.

Can you surf all day every day and eat lobster for dinner whenever you want? Then you are rich.

Can you fly anywhere in the world at a moment's notice? Then you are rich.

I'm not saying those specific things make you rich, but can you do whatever you want whenever you want? That's the question.

Possessing nice things doesn't make you rich, but it can be an indicator that you might be rich. But, people with nice things that don't have freedom and control over their lives to do what they want to do are not rich at all. Either they are in debt and will eventually have to pay it back, or they have to spend time working to keep up with their lifestyle.

Of course, cash helps in this regard. If you have lots of cash and you can survive off the interest, that is the first step towards being rich because it frees you from doing things that you have to do to earn money in order to eat.

That is the first step, and from there it is just a matter of degrees - what you eat, how physically comfortable you are, how relaxed you are, how expensive are the activities you do, etc.

If I could spend all day in my shop building stupid shit every day, I would consider myself as rich as I ever wanted to be, as long as I could hop on a plane whenever I wanted to see friends in other cities.

Several people said that being rich is relative. I think that is because they think of being rich in terms of money and posessions, not freedom and control.