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The amount of money you need in order to be considered well off or rich varies heavily throughout the country. You could have $200K in the bank living in Oklahoma and your spending power is infinitely higher than having $200K in the bank living in San Francisco where you can’t even buy a 1-bedroom condo for a million bucks these days.
The Modern Wealth Index from Charles Schwab essentially defines wealth as ‘having lots of money’. Last year, in order to be considered ‘financially comfortable’ in America you needed to have $1.2 million in the bank. 64% of millennials believe they’ll become wealthy at some point in their lifetime but the amount of money they need to actually be considered wealthy varies year by year, and this year it’s up a lot from last year according to Bloomberg. The definition of wealthy also varies across generations with older generations thinking you need A LOT more money in order to be considered wealthy.
To be financially comfortable in America today requires an average of $1.4 million, up from $1.2 million a year ago, according to the survey. The net worth needed to be “wealthy”? That’s an average $2.4 million, the same as last year in the online survey of 1,000 Americans between age 21 and 75. (via)
Here’s how the numbers break down….
How much money you need in order to be ‘financially comfortable’ in 2018:
Millennials – $1.3 million
Gen X – $1.4 million
Boomers – $1.6 million
All – $1.4 million
How much money you need in order to be ‘wealthy’ in 2018:
Millennials – $2 million
Gen X – $2.6 million
Boomers – $2.7 million
All – $2.4 million
That’s $2 million to be considered ‘wealthy’ if you’re a millennial and $1.3 million just to be considered ‘financially comfortable’….Holy shit.
There’s a lot of variance in how we define ‘wealthy’. What you considered wealthy might be vastly different from what your neighbor considers wealth. Furthermore, we all have varying ideas on how a rich person lives his/her life. You can read up on this study here on Bloomberg to learn more.