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How much money do you need to be considered rich?

Updated: Mar 6

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Rich people get all the service
Rich people get all the service

If I told you I had a big house, fancy car, and nice clothes, would you consider me rich? If I had a modest house and car, with no debt would you consider me rich? If I lived in a small house in the mountains and only cared about being around nature would you consider me rich?

When it comes to defining what it means to be "rich," there is no one-size-fits-all answer. Everyone has their own definition of what constitutes wealth and financial success. Some people may consider themselves rich with a six-figure income, while others may only feel financially secure with a net worth of several million dollars. In this article, we'll explore the concept of being "rich" and what it takes to achieve that status.

The reality is, any one of you could answer yes to all of the questions above. The concept of being rich is extremely relative. For the sake of this article, we will break down being rich, or wealthy, in terms of dollars made vs a few different groups. What many would call "The American" definition of rich. In order to draw clear guidelines for this conversation let's break down what the US government considers rich.

If you want to skip all the fuss and read about how I'm planning to make myself "rich", then click here. And if you want to keep up with all the ways I'm making money follow this link and subscribe.

What is Considered Rich?

The idea of being rich is subjective and can vary greatly depending on a person's income, lifestyle, and geographical location. However, there are some general guidelines that can be used to define what is considered rich in the United States. According to a 2021 survey by Charles Schwab, the following income and net worth figures are commonly associated with being "rich" in the U.S.:

  • Income: $500,000 or more per year

  • Net worth: $2.5 million or more

It's important to note that these figures are not set in stone and can vary based on factors such as family size, cost of living, and individual circumstances. Additionally, some people may feel financially secure with less money, while others may require more to feel comfortable.

Factors That Determine Wealth

There are several factors that determine a person's wealth, including:


Income is often one of the most significant factors in determining wealth. The more money a person earns, the more they can save and invest, which can lead to a higher net worth over time.

Net Worth

Net worth is the total value of a person's assets minus their liabilities. This includes assets such as cash, investments, real estate, and personal property, as well as liabilities such as mortgages, loans, and credit card debt. A high net worth indicates that a person has a significant amount of wealth and financial security.

Cost of Living

The cost of living can vary greatly depending on a person's geographical location. For example, living in a major city with a high cost of living can require a higher income and net worth to feel financially secure compared to living in a rural area with a lower cost of living.


Lifestyle choices can also impact a person's wealth. For example, a person who lives frugally and saves a significant portion of their income may be able to achieve a high net worth faster than someone who spends extravagantly and doesn't save.

Achieving Financial Success

Achieving financial success and becoming "rich" requires a combination of factors, including:

Education and Career

Obtaining a quality education and pursuing a lucrative career can provide a solid foundation for financial success. Higher education and specialized skills can lead to higher-paying job opportunities and increased earning potential.

Saving and Investing

Saving and investing a portion of one's income is crucial to achieving financial success. Consistent saving and smart investment choices can lead to significant wealth accumulation over time.

Real Estate

Real estate can be a valuable asset for building wealth. Owning property can provide a source of passive income through rental properties and can appreciate in value over time.


Starting a successful business or investing in entrepreneurial ventures can provide a significant source of income and wealth accumulation.

Since the Joe Biden era began there has been a lot of talk about taxing the wealthy. According to Joe Biden's tax plan, wealth is defined as a household making $400k a year or more. Some of you may be thinking WHOA that's a lot of money! Others may be thinking the opposite. In New York, making $400k might get you a decent place, but in a place like Nebraska, $400k will buy you the home of your dreams. What's more, depending on whether you are a baby boomer, Gen Z, or Millenial, you define wealth differently as well.

Generational Differences in Wealth
Generational Differences in Wealth

What's crazy about household income, less than 2% of households make more than $400k, but that accounts for 25% of income earned in this country. Talk about the poor distribution of wealth! This is why President Joe Biden is looking to redistribute a portion of that wealth through changes to our nation's tax policy.

So, from a pure dollars earned per year perspective, $400,000 is a number that America is using as a line in the sand. If you focus your attention on net worth and what American's feel makes you "wealthy" things change slightly. According to Schwab's 2021 Modern Wealth Survey, the average American considers "wealthy" as $1.9M in net worth. That is down from previous years:

Wealth's Definition is Changing
Wealth's Definition is Changing

Source: Schwab Modern Wealthy Survey

If you think about earning $400k/year and how long it takes to get to a $1.9M net worth if you make that much money, it wouldn't be very long. So long as you don't spend most of your earnings each year. In fact, if you saved 20% of your household income of $400k it would only take 20 years (without any interest applied) to have a net worth of $1.9M. That is only half of a standard career. If you are earning 6% interest on that money you will have $2M within 15-16 years (that shows you the power of interest).

What I'm trying to say is, making $400k/year is a lot of money, and in a very short period of time would catapult the individuals surveyed in Schwab's study into "wealthy" status.

What we have yet to consider in our attempt to answer "How much money do you need to be considered rich?" is an individual's geographic location. As I mentioned above, making $400k in New York is a lot different than making that same amount in Nebraska.

To answer or identify what makes you rich in NY vs NE I typically utilize a cost of living calculator. How does a cost of living calculator work? Its pretty simple, you pick the city you live in, inssert how much you make annually, then identify a city you would like to live in, and the system will tell you what comparable pay for your "new" city would be.

Following our example of NY vs NE you can see below that the cost of living in NE is significantly lower than that of NY. Therefore, a person making $200k in NE might "feel rich" while someone making twice as much in NY might not feel as rich.


In conclusion, the definition of being "rich" is subjective and can vary greatly depending on individual circumstances. Factors such as income, net worth, cost of living, and lifestyle choices all play a role in determining a person's financial success. Achieving financial success requires a combination of education, career choices, saving and investing, real estate, and entrepreneurship. Ultimately, becoming "rich" is a personal goal that requires hard work, dedication, and smart financial choices.

Being considered rich or wealthy depends on a few factors and many people have their own definition. Place it upon yourself to determine if you are considered wealthy. If you want expensive houses and nice cars, then find an income and net worth that allow you to do so. Ultimately, be happy being you and all else will work itself out.

If you want a side hustle that can help you make more money and feel rich, check these out!

In short, that depends on you!

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