How much money in liquid net worth is considered rich?
- Anonymous1 decade agoFavorite Answer
Rich or better yet, wealthy is all solely dependent on the person.
One person can have $100k in bank and they are rich beyond their wildest dreams while someone else may have millions.
The same is true in regards to net worth. Here are some examples:
You have a guy who owns a Janitorial supply company where he makes $85,000/yr. He lives in a modest 2000 sq ft home valued around $285,000. He drives a 7 year old truck and wear jeans and a timex everyday. His home and car are paid for and he has $95,000 in the bank and a $375,000 retirement account along with a business valued at $650,000 with no loans.
To the average person, he would not appear to be rich but in fact he is. Why? He has no bills allowing him to save all of his money. He does not buy a new car every year and obviously does not waste money on fancy homes or jewelry.
The next guy is a surgeon who makes $425,000 per year. He has $70,000 in the bank and $400,000 in retirement. He has a $1.2 million home which he owes $800,000 on which cost him $4,200 per month. He drives a Mercedes S550 which he put $30,000 down on and pays $900/month on.
To the public, this guy would appear rich when in fact, he is in debt and even if he cashed in all his assets, he would not be out of debt. The Janitor is set and coasting through life with no worries about money or his status. He can do more with his life than the Surgeon ever could. The Janitor has Financial Freedom!!!
So, your question is very scenario based depending on the person in question.
- 1 decade ago
Generally, rich is enough to live without support over a lifetime while investing in low risk securities. That's probably somewhere in the $5-10 million range for most professionals Which would produce a large city professional income ~$150-$300/yr while invested in government securities. That's probably a good starting point.
- Anonymous1 decade ago
I don't think its a liquid net worth makes you rich. You could have $100,000 in the bank, but be in $400,000 in debt, that's VERY far from rich. I'd say "Rich" would be $0 debt, over $100,000 liquid play money, some investment accounts, retirements accounts and you would have to make over $200,000 a year after taxes. That's just me.
Add: Ok maybe not $200,000, but It would be nice. =)
- ?Lv 45 years ago
i'd say for someone to be considered rich he shoud have over a million dollars of spending money. the key word is 'spending" because most middle class family has saved up over a million dollars for bills, food etc.
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- Anonymous1 decade ago
By people who work with money for a living? $1 million.
By people who work with a lot of money for a living? $5 million
What is the "dream client" of people who work with a lot of money for a living? $25 million (The "Super Rich")
- 6 years ago
no debt,$1,000.00 per day free cash flow per day w/o touching principal