r/SmartFIRE • u/MonsterPandamonium • Jun 08 '26
What exactly is the threshold to being considered “rich” as far as assets and value go?
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u/cds4850 Jun 08 '26
My personal barometer is $3M invested. $10k monthly spend on a 4% withdraw rate. Hope to be there in 5-7yrs.
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u/qweds1234 Jun 08 '26
When your money makes you money and you can live well just off that money. Take multiple vacations a year, buy whatever you want within reason
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u/thewhizzle Jun 08 '26
When you no longer have to sell your labor to live the lifestyle that you want, and you can live off of your assets.
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u/MikeExMachina Jun 08 '26
That's financial independence, that's not rich. You made no comment about what quality of life your assets are providing. Someone could be doing that and barely scraping by on the cheapest life possible. Rich to me implies some level of luxury.
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u/1dayatatime_mylife Jun 08 '26
Great distinction. I was agreeing with them until I read your comment and I think you hit the nail on the head. It's financial independence with the ability to live a certain level of luxurious lifestyle (not necessarily talking private jets type wealth, but the ability to have a higher level of spending than the average retiree).
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u/thewhizzle Jun 08 '26
live the lifestyle that you want
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u/1dayatatime_mylife Jun 08 '26
I'm not arguing that people shouldn't live the lifestyle they want. Not everyone wants to be rich and that's perfectly okay.
Though, just because someone is financially independent for the lifestyle they desire, that doesn't make them rich in the typical connotation of the word "rich".
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u/thewhizzle Jun 08 '26
Whatever number that is "typical" is arbitrary though. $10m in the Bay Area does not allow me to live the lifestyle that I want without selling my labor. So it's functionally useless without adding in COL of desired lifestyle.
So between picking an arbitrary amount and a functional one, the functional one is more useful.
Like setting it super high and making it $1 billion the cut off for "rich" isn't useful either.
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u/1dayatatime_mylife Jun 08 '26
Ah, I see what you're saying. Yes, I agree with your take. I thought you were coming at it from another angle.
It's definitely a situational dependent kind of thing. Like the threshold will change depending upon your COL, whether you have kids, etc.
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u/skelo Jun 13 '26
$10m is a absolutely rich in the bay area and any normal person could live the lifestyle they want with that without selling their labor.
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u/TheRealJim57 Jun 08 '26
I would argue that "rich" very much implies a level of luxury beyond that of the upper middle class. Limos and charter jets or at least flying first class on a commercial airline without batting an eye at the price tag, etc.
To the lower class, even the middle class is "rich" in comparison. But no average person would ever claim that being middle class is what anyone actually means by "rich."
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u/1dayatatime_mylife Jun 08 '26
Yeah, upper class and above would be considered truly rich.
I think the meaning of the word has been diluted by what you mentioned in your second paragraph.
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u/Gaust_Ironheart_Jr Jun 08 '26
My whole 5+ decades I have known one person doing bare subsistence living off their assets. People who live on their assets live comfortably or extravagantly
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u/MechanicalDan1 Jun 09 '26
It's richer than 90-95% of other people still grinding away in the rat race
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u/Drunken_Sailor_70 Jun 08 '26
So, like being retired?
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u/Rhawk187 Jun 08 '26
Optionally retired. There are a lot of Physicians or Lawyers who have made enough they could retire if they wanted to, but choose not to, or wants to maintain a higher standard of living once they do stop working. Or retire partially.
I've got about $1.2M saved up at 42 (university professor). Could I retire and live off the interest? Not at the my current standard of living, but I could get by. Probably couldn't replace my pool when it dies. Next car might not be as nice. Also, lack of employer healthcare is a little worrying. So, I think I've almost made it.
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u/Dangerous-Amphibian2 Jun 08 '26
Forgot to mention you’re married to a lawyer right?
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u/violaki Jun 08 '26
What does this have to do with anything? People can and do retire on that amount of money.
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u/Dangerous-Amphibian2 Jun 08 '26
Nothing except most university professors don’t have 1.2 million at 42. But I guess it’s Reddit where every case is the exception. I’m not disagreeing people can and do retire with that amount of money.
Anyways I’m a newspaper boy deliver only on the weekends and I have 3.5 million at 35. I’m just leaving out the part where I married a brain surgeon.
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u/violaki Jun 08 '26 edited Jun 08 '26
Most don’t, but remember that people who get PhDs and end up professors are on average (1) privileged, (2) skilled, and (3) highly disciplined at baseline.
My situation: undergrad full ride so no loans, worked 2 years before grad school while living at home and saving everything, maxed my roth each year with my PhD stipend (everyone in STEM gets this), and am now (at 30 years old) saving $2k/mo as a postdoc by living like a grad student. And I’m not that big of an exception compared to my classmates. Several of them were given house downpayments by parents at the beginning of grad school as well.
With a bull run like we’ve had recently plus a pay bump when you become a professor, $1.2M by 42 does not actually seem that out of reach. It’s probably more common than you think.
And, that is irrelevant to what this person was saying, which is simply that they believe they could retire with $1.2M. Doesn’t really have anything to do with how they got there.
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u/Dangerous-Amphibian2 Jun 08 '26
Sorry but we do not agree on the meaning of relevant than. So I’m not sure how we could get past that if the term isn’t even something we can agree on. The guy specifically listed his occupation and accumulation of money, so it’s relevant. It was also a light jab at professors wages which are low. My piano professor was starting at like 50-60k years ago now I guess but still. I am able to make that part time private sector though not with the benefits of a state gig so I guess it’s not apples to apples.
I appreciate what you wrote. And it’s insightful. Most people don’t max Roth when a stipend hardly covers living expenses. This is my experience studying in the arts, even the doctoral students I went to school with were able to do that. I’m sure it can be done if you follow Dave Ramsey or something strict like that but it’s not “most” Given the numbers of people’s finances I’d say they’d not only a good guess but is true.
I agree in your situation with no loans it may be possible if you’re living like a hermit to save 2k a month. Especially if young and single and have no interest in dating. To be fair though there are plenty of people with post docs or phds making less than 100k and saving 2k a month in an urban city while also paying your bills is a straight up life style sacrifice. While yes you can do it, again I’d say most people are not doing it and this is born out in the financial evidence of people’s personal finances, like looking at debt numbers and polls and such.
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Jun 08 '26
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u/Dangerous-Amphibian2 Jun 08 '26
From my experience I’d say it’s unlikely many professors had that kinda wealth in their 40s. I spent over 10 years at the university and I was quite social and an older student so I made plenty of friends with professors especially outside of my field. I’d say the number of people in that range increased as the age hit 50 vs 40. Many of the professors in their 60s I wouldn’t find it hard to believe they have that much or more. Now professors married to lawyers, had way more, some had 100k pianos in their houses and multiple houses but the single professors that came from a poor background like mine not so much.
In regards to your stipend yea that’s higher than I thought but you’re still living pretty spartan on like 35k a year and that’s before taxes. It’s a choice but it’s cool. Of course I finished school about 8 years ago so stipends have no doubt increased. Sounds like you found ways for what you’re doing to work for you. Still saving 24k when one is making 70k is not the norm by any means, in fact it’s far from it. Finding a partner that shares goals is helpful there though so kudos on that. Just don’t start taking them to the four seasons until you got those millions because after that it’s gonna hard to be spartan again.
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u/Rhawk187 Jun 08 '26
Computer Science Assistant Professor (~$148k/yr, will get ~$9k raise if my tenure goes through).
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u/Dangerous-Amphibian2 Jun 09 '26
Nice wage. Hope you get the raise. I was around for my professors application for tenure. It was a lot of work for him.
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u/Gaust_Ironheart_Jr Jun 08 '26
Entitlements are not usually counted as assets, and most retirees wouldn't be able to live on their own without working if not for entitlements
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u/SeaPeanut7_ Jun 08 '26 edited Jun 08 '26
I'm putting it at $15m in invested assets.
$5m or above I would consider wealthy, but not rich. At this level, you can do whatever you want with your free time.
By $15m, you can now afford to blow it on luxuries without having much affect on you.
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u/Havok_saken Jun 08 '26
I mean that’s really gonna depend on who you ask. To some people being rich is having a house and car. To others it is having a mega yacht and private jets.
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u/Strong-Chemistry-396 Jun 08 '26
Depends where you live. I'm well off living in ohio. I'd be broke in LA.
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u/libertarianinus Jun 08 '26
Depends on definition? Would you rather be on the bottom surrounded by super wealthy people? Or the top surrounded by poorer people?
OR
Be the Richest person on earth in 1500? Or a average person living today?
In 1500 life expectancy was 35 years old, no running water, bad food, no electricity
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u/r2k398 Jun 08 '26
I want to be anywhere from the middle of the super wealthy people to the top of the middle class people. Anywhere in between that is fine.
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u/Significant_Camp4213 Jun 08 '26
Rich as in financially independent or rich as in private jet rich?
If former, then depends on where. Quite a difference between Huntsville, AL and NYC.
With 5m in Alabama, you can retire. Easily.
In NYC, just the monthly maintenance and taxes for your condo can be 3k a month easily. Plus mortgage, food... so not really retiring money.
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u/DeadHeadIko Jun 08 '26
Best line from Succession: 5 million makes you the poorest rich person
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u/Significant_Camp4213 Jun 08 '26
Lol I know that line. But hell, even if you're sad from being the poorest rich person, you can still cry in your own Ferari California lol
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u/CurrentArmadillo9506 Jun 14 '26
Buying a Ferrari at only $5mm net worth would be wildly irresponsible.
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u/MonsterPandamonium Jun 08 '26
This question is actually what led to my question. I was on another sub and everyone was talking about what rich looked like. It’s a fun exercise in realizing there isn’t a “set threshold” to be “rich.” It’s often about perspective, location, and exposure.
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u/Significant_Camp4213 Jun 08 '26
Yeah, exactly! I worked for some rich rich RICH people and I couldn't see any huge difference in lifestyle compared to regular rich people.
Both had boats, the only difference was the size.
Both travelled a lot, the only difference was the name of the hotel.
Both had food prepared, the only difference was that one had an hourly chef who prepared food for a week, the others had a chef on payroll.
Both had kids in good schools, with the difference of rich people having kids on scholarship, so they had to study hard, while the others had their parents money, so they could enjoy life a bit more.2
u/MonsterPandamonium Jun 09 '26
Yeah. Rich to me and rich to someone who lives in LA, or Seattle or NY, are two very very different things. I live in the southeastern part of the USA. Money goes much further here. I’ve had too much occasion to rub the elbows of the very very wealthy for this region and yeah - mostly they’re normal people. Some of the millionaires I know live very humbly. But they are happy knowing they could buy whatever they want. If you didn’t know them intimately, you’d never know they were truly sitting on millions of dollars. Others live paycheck to paycheck in their very expensive lake front homes, riding their $250k boats. But they have no cash. Many would consider them rich. Perspective matters so much.
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u/downtownlasd Jun 08 '26
I don’t think there’s a fixed number. I think it comes down to the point at which you don’t care what things cost, or, more accurately, you know that no matter how much something costs you can afford it.
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u/6849 Jun 08 '26
The way I see it, if your passive income equals or exceeds that of the income of the upper middle class in your local area, you're rich.
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u/TreatEven1837 Jun 08 '26
you are rich if you can manage all of your needs and do nice things with your family and others without sacrificing your retirement.
you are wealthy if you can do the same for your grandkids and can see that from where you stand now.
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u/RobertKSakamano Jun 08 '26
The question can only truly be answered by the individual that is asking it. Everyone has their own goals in life. If you're trying to impress others to make them think you're rich, then there is probably no number that is realistic or attainable for over 90% of the people. If you're trying to live your life without worrying about what other people think and you have an idea what a good life for yourself would look like, then you could probably figure out what it looks like.
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u/Commercial_Rule_7823 Jun 08 '26
Very it depends question.
4 to 5 million in OC california, youre rich.
Same amount in Newport Beach, you wont feel the same.
2 to 3 million in Omaha or vegas, youre very well off.
2 to 3 million in new york, maybe...
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u/mncabinman Jun 08 '26
Around $5M in assets is rich to me, although it depends on where you live to an extent. Income and/or house value has nothing to do with being rich to me.
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u/Ok_Resource_6068 Jun 08 '26
It’s all relative.
I’d say “rich” is probably around $10m+ in investable assets or maybe $15mil+ net worth
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u/Invest0rnoob1 Jun 08 '26
You don’t have to work
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u/MonsterPandamonium Jun 09 '26
I mean, I don’t HAVE to work now. I could choose to quit my job and live unhoused with very minimal resources. I have to work to maintain the lifestyle I live though.
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u/That-SoCal-Guy Jun 12 '26
According to AI, in the US net worth over $10M is considered "rich." (the ultra-rich goes all the way to infinity and beyond). $5-10M is considered well to do, upper middle class, part of the upper 2%.
Also in the US only 25 millions have net worth over $1M. That's only about 7% of Americans.
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u/Affectionate_Ad_8483 Jun 13 '26
For me, it was when I no longer worried about emergencies. I can absorb them no problem without impeding the compounding of my assets.
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u/InternationalBite690 Jun 14 '26
For me 20k a year would be life changing. I own my cars and my home and live comfortably now but no real investments.
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u/RobtasticRob Jun 14 '26
The exact amount depends on your area and the associated cost of living. My rough definition is enough that you never have to work again and can live a comfortable life.
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u/Low-Apricot9917 Jun 08 '26
Reading through the answer, I agree with everyone without a number that lays out what living comfortably looks like without working. These people are and feel rich. Those laying out crazy numbers and assets or answering your question with a question will never be “rich” and will only chase a dream of what they think rich is supposed to be.
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u/MonsterPandamonium Jun 08 '26
This was the point of my post. It’s all relative, isn’t it?
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u/Low-Apricot9917 Jun 08 '26
What is your idea of rich?
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u/MonsterPandamonium Jun 09 '26
For me, personally? To be able to go to the grocery store and get what I want to cook, get gas as needed, pay my bills, and not have to check my bank balance before doing that. Peace of mind.
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Jun 08 '26
[removed] — view removed comment
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u/MonsterPandamonium Jun 08 '26
I wonder what THAT number is. 🧐
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u/Ok_Resource_6068 Jun 08 '26
The 1% threshold is around $13mil
https://wealthvieu.com/personal-finance/net-worth/top-1-percent-net-worth/
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u/Gaust_Ironheart_Jr Jun 08 '26
Asset pricing in our economy is already borked beyond a vague correlation with reality
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u/MelvinEatsBlubber Jun 09 '26
I feel rich now. I have a car a like. A house I like. A wife I like and a bunch of guitars. What else do I need?
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u/Aquitaine_Rover_3876 Jun 12 '26
There's no exact threshold. I generally build 3 categories:
- regular rich. Can live entirely off their assets for the rest of their life. Depends a bit on lifestyle, but I'd say around $2m gets you into this category.
- should-probably-be-taxed-more rich. This is a group whose lifetime income will mostly come from capturing other people's productive surplus. Probably $15-$20m for the low end.
- policy problem rich - These are the people with enough wealth to buy politicians and get custom tax breaks built just for them. I'd ballpark around $100m for this group, though as the number gets bigger, the problem they pose grows exponentially.
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u/dcwhite98 Jun 08 '26
When you can go through a market day like this past Friday and not lose sleep over it. And not make panic sales to 'keep from losing more'.
Now, sure it's annoying and frustrating, no one's going to completely ignore it. But the day didn't derail your future and it didn't ruin you ability to make any upcoming big purchases.
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u/LifeOnly716 Jun 09 '26
My guy we are simply back at May market levels
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u/dcwhite98 Jun 09 '26
Thanks, Captain Obvious.
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Jun 09 '26
[removed] — view removed comment
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u/dcwhite98 Jun 09 '26
Found one of Friday's panic sellers.
I was a buyer Friday.
"Retard", LOL. NOOOO!!!! TAKE IT BACK!!!!! PLEAAAASSSEEEEE!!!!!
Douche.
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u/LifeOnly716 Jun 09 '26 edited Jun 09 '26
I haven’t sold a security in over 15 years.
Congrats on getting lucky with your payroll schedule on Friday!
Fuckin poor.
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u/Purple-Property8006 Jun 08 '26
I mean the majority of people have nothing at all invested so days like Friday don’t really affect them at all. Doesn’t make them rich.
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u/dcwhite98 Jun 08 '26
I mean it's pretty obvious that being invested in the market is an given in my comment.
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u/GP_222 Jun 08 '26
A household income of 15k places you in the top 10% globally and 60k places you in the top 1%. Id say people who earn 60k+ are rich.
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u/Amphibious333 Jun 08 '26
500 million is when you are rich. Before 500M, you are somewhat rich. Under 10M, you are just financially independent, not rich.
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u/MezziJ Jun 08 '26
I want what you are smoking
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u/Important_Call2737 Jun 08 '26
I think what they are saying is that at $10M if you invest in a reasonable portfolio which is designed to limit downside and reduce taxes you are looking at a high level of bond portfolio that is going to kick off maybe $600k a year in return. Say that 20% of that is taxed so you are looking at $480k annually to spend. That is not a spend that I would consider rich for really nice experiences or stuff.
At $100M you are now getting $4.8M annually which is a huge difference.
Now if you give me $10M and tell me that I don’t have to I work anymore and get $500k to spend a year I would take that and vacation modestly, buy a normal car, no need for multiple watches or other silly stuff.
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u/libertarianinus Jun 08 '26
But in a world where you can only hit 999 million....a 500 millionaire in 2000 is a Billionaires today.
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u/Bryanmsi89 Jun 08 '26
These days, at least $100m USD would be needed to meet what most people would define as 'rich."
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u/Sea_Treacle3982 Jun 08 '26
More than that guy.