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You’ll need to have some serious coin in the bank in order to be considered ‘rich’ by the person sitting next to you. A recent study found that millennials think that someone needs $1.3 million in the bank in order to be considered ‘financially comfortable’ and they need $2+ million in order to be considered ‘wealthy’. But that’s peer-to-peer, and those numbers are higher for Baby Boomers.
When it comes to the viewpoint of private banking, you’ll need a fuck ton more investable wealth than $1.3 million in order to be considered ‘rich’ according to recent findings from Bloomberg. How much? You’ll need *at least* $25 million in investable wealth in order to be considered ‘rich’ by private bankers, but that’s economy-class rich. First-Class Rich is $200 million and Private-Jet Rich is $1 billion investable wealth:
The measure of what makes someone rich has changed dramatically in the past two decades. In 1994, when Peter Charrington, global head of Citi Private Bank, first joined the firm, “Three million was largely considered ultra-high net worth across the industry,” he recalled. “Fast-forward almost 25 years, and $25 million is how we define ultra-high net worth.”
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That’s not to say $25 million opens all doors. Abbot Downing, Wells Fargo’s operation for ultra-high-net-worth families, works with clients who have at least $50 million in investable assets or $100 million in net worth. Ascent Private Capital Management of U.S. Bank sets what Martim de Arantes Oliveira, regional managing director for its San Francisco office, calls a “stake in the sand” at $75 million in net worth for multigenerational wealth. There will always be exceptions—for the family friend or a promising entrepreneur. (via)
That sort of capital opens up investment opportunities that don’t exist for most people such as IPO’s and private offerings. Getting access to this kind of investment doesn’t run cheap, but the fees also vary widely across private investment firms. Bloomberg says that someone with less than $100 million might pay between 50 to 100 basis points. One basis point is equal to 0.01%, so that certainly adds up when you’re talking 50-100 on $100 million.
…But we’re off topic…The answer is $25 million, that’s what you need in investable wealth in order to be considered ‘rich’ by private bankers. That, or you need to have a very bright future as an entrepreneur and have them banking on you getting really, really, ridiculously rich in the future.