How Far Are You From Being Rich?
Many wealth seekers say $1 million is no longer enough to be considered wealthy. Is $5 million really the new $1 million?
Everyone has own definition of “rich.” Let’s think about this, “rich” is a relative term, it means having more money than a defined group of people - our neighbors, co-workers, friends, etc. Ultimately, it really depends on who we are comparing ourselves to.
Although salary is one way or the other correlated to wealthiness, it’s not a good indicator because “Getting wealthy isn’t about how much you make, it’s about how much you save.” To obtain a quantitative answer, we can try to break the national distribution of net worth down by percentiles for different age groups. We can figure that being in the top 1% or 5% nationwide is “rich.”
The following figures show the median net worth (assets less debts) of households in each group. Since the figure is the median - half have more, half have less - for each group, it is not a “threshold” figure. Actual net worth can be less to be in each group:
| The Distribution of Net Worth, By Age Group | |||||
|---|---|---|---|---|---|
| Age Group | Top 1% | Top 5% | Top 10% | Top 25% | Median |
| 80+ | $2,322K | $1,166K | $763K | $346K | $143K |
| 70-79 | $7,038K | $1,866K | $1,077K | $487K | $174K |
| 60-69 | $9,723K | $2,861K | $1,409K | $463K | $168K |
| 50-59 | $9,054K | $2,435K | $1,155K | $456K | $179K |
| 40-49 | $4,162K | $1,207K | $678K | $325K | $107K |
| 30-39 | $1,833K | $533K | $352K | $148K | $39K |
| 20-29 | $886K | $163K | $95K | $38K | $8K |
Reference: The VIP Forum, Corp. Exec. Board, 2001 data - AssetBuilder
With my net worth of around $170K today, I think I’m doing fine for my age (high 20s) but I’ll have to compound my money in my 30s in order to stay this way.
So, how rich are you?
June 16th, 2008 at 2:41 am
In this past few months I think because of simultaneously increasing of prices of gas crued etc. most people are no longer on the lane to get rich.