Sunday, June 12, 2011

Anyone here "wealthy"?

The Wall Street Journal reported on a survey recently that measures how the wealthy define being wealthy.  Called "Top Five Signs That You're Wealthy" (does anyone else find that title ridiculous?) the article covers the five indicators that people investible assets over $3 million called out to define someone as "wealthy".  Those five signs boiled down to a certain amount in the bank or enough money to buy whatever I want and do whatever I want, to make $1.6 million seem like not a lot of money, or to have minions. 

I certainly aspire to having enough money to pursue my passions or retire, one of their definitions, and I would say that I already have enough money to buy most of what I want on a daily basis.  I don't imagine that even if I had huge amounts of money I would buy a lot more than I do now, though I do imagine I'd spend more to get exactly the right item and buy for really good quality. I hope I never think that a salary of $1.6 million a year is "not a lot of money" unless there is hyper inflation since that is a ridiculous salary.  As for the "magic number" in the bank since we're only talking about investible assets I'd probably say around $2 million in the bank would make me feel quite wealthy and would accomplish the buying and pursuing a passion metrics.

The survey also indicated that most of these people considered their money to be an important or somewhat important measure of their self worth which I found a bit sad.  However, it does make sense since those who consider money to be important to them are more likely to acquire it.  So in a sense the survey group self-selected for the trait of measuring their own value through their bank balances.  Around 70% of all respondents said their family, friends and children were most important to them, though that sentiment isn't reflected in their definition of wealth.

So I'm going to pass along the Wall Street Journal's question to you.  "Can you finish the sentence 'You know you’re wealthy when…'?"

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  1. No, I agree, the title is ridiculous...could you imagine someone being like "I had NO idea I was wealthy!" I think that only works the other way around...when you have no idea how far behind you actually are!

    Well, I don't think it's sad though that the people surveyed associated their net worth with their self worth- if you've worked for it, it can be a measure of your success and efforts, but I hope it's not their ONLY measure since the intangibles like friendships and family relationships are better indicators of worth in my opinion!

    It's great to find another grad student blogger out there! :)

  2. I agree with Shannyn, I don't think it's necessarily negative to find money as an important or somewhat important measure of self-worth. Compensation is often tied to performance or value added, and you want to feel you are being appropriately compensated for your work and the results you deliver.

    To complete the wealth question: 'You know you’re wealthy when… you're free to make impulsive decisions without affecting your financial situation."

    I love traveling, so for me that would mean being able to plan a last minute trip, without having to put a big dent on my savings or emergency fund.

  3. I like #3 - freedom to pursue your passion. That would be my definition as well. Actually, pursue your passion while living a pretty comfortable life. ;)

  4. Interesting article. Guess I'm not wealthy according to the survey. However, my definition of wealthy is having a positive state of mind, living every moment like it's your last with no regrets, and having enough money to do what you want to do.

  5. Everyone has their own definition of wealth. It's how contented you are that matters.

  6. You know you are wealthy when ( like I am now) you are reading this post on a personal ipad wth your work laptop next to you, your smart phone in your bag and the ipod touch in the carpark outside.

  7. You know you’re wealthy when your average monthly passive income is higher than your average monthly expenses.