Yesterday I read an article on CNBC’s website that spelled out exactly how much money it takes to be rich. Before I share how much money they think it takes to be rich, take a minute and think about what it would take to make you feel rich.
For my kids, it would probably be a $5 bill in their pocket. For teenagers, maybe a couple hundred dollars would do. For young professionals, I’m guessing getting out of college debt and hitting your first $1,000 in savings might feel pretty good.
However, as you acquire more wealth, get closer to retirement, and get older, the amount that makes you feel rich really starts to skyrocket. The more you get used to having money, the less it feels like you have.
For me, feeling rich would mean having enough money to never have to work again, and to be able to afford the lifestyle I want for the rest of my life. For me, I couldn’t put a number on this, but I could surely be flexible as to the lifestyle I would choose.
Part of the issue with getting rich, and meeting retirement goals for that matter, is that most people go through life matching their spending to their earnings. This means that your spending will rise at the same rate as your income. This is a big part of why many people never feel like they have enough money to retire. In reality, if you could live on half your income from an early age, you could reach this goal in your late thirties or early forties.
Okay, enough babbling about what I think being rich means, let’s hear what the CNBC poll says:
But a new survey from UBS shows that most investors say “wealthy” means $5 million—with at least $1 million of that in cold, hard cash.
The UBS Investor Watch asked 4,450 investors if they consider themselves wealthy. Fully 60 percent of those worth $5 million or more said they’re wealthy, while only 28 percent of those worth $1 million to $5 million said they were wealthy (those were the only two categories given).
You can read the original CNBC article here: What is Wealthy?
And there you have it. The magic number of how much money it takes to be rich is now $5 million, and $1 million in cash.
So what do you think? Is that in line with the number you were thinking of? Leave us a comment below with your thoughts.