How much do you have to make a year to be Considered Rich in America?

Question

I was talking to my cousin(who is an architecture student) who told me that, making 80-100grand is luxury. Any thoughts and opinions?

Answer 1

Your cousin is confusing income and wealth. Someone could be making $1 million a year, but if he has $2 million in debt then he is not rich. Conversely, a person making $1 million could be socking away $600K a year in savings, paying $350K a year in taxes, and living frugally on only $50K per year.

Such a person will certainly become rich in a relatively short time.

The best answer that I ever heard to this question was on "The Cosby Show". The son was asking Cliff if they were rich. Cliff responded that "You're rich when your money works for you instead of you working for your money."

Answer 2

It really depends on the cost of living where you live.

I live in the San Francisco Bay area. A household income of 80 to 100k is OK, but not enough to buy much of a home, other than maybe a smaller condo.

In many other parts of the country though, 80 - 100k is a good living and would put you at the upper middle class. I don't know about luxury, but you'd be decently well off.

Answer 3

It really depends on what part of the country you live in. Cost of living and purchasing power parity can vary greatly. It can cost a lot more to live in New York vs. Omaha, Nebraska.

An objective resource you can use is to look up demographic data. The US Census Bureau compiles data for the country and you can get the median income for an area and determine what can be considered wealthy or not.

Sorry that I couldn't be more specific and provide a number.

Answer 4

I disagree with your cousin. If you make $80,000 - $100,000 per year, you can live in a nice suburban four-bedroom house--but not near New York, Boston, Los Angeles, Washington D.C., or other expensive cities.

Assuming that eventually you've got a family of four and that's your sole income, you'll live well enough, but you certainly won't be rich. You'll have two cars, but they won't both be luxury vehicles and one won't be new. You'll vacation in the US, not Europe or other distant destinations. You won't have to shop at Penney's and Sears, but you'll use the coupons for Macy's and save Lord & Taylor for very special purchases. You'll need to save up for major purchases like getting the house painted or replacing the roof, and paying for your kids' college will mean taking out loans like everybody else.

Answer 5

the Democrats agree with your cousin and want to increase taxes on him.

Imho though, rich means having enough invested assets that you need never work for anyone else again. 10 million net assets throwing off 1.5 million in income is enough.



GL

Answer 6

Probably twice the poverty rate would be considered rich, as you're way above average/