People have always aspired to be "rich." Some may argue that truly being rich goes far beyond anything material. However, strictly speaking, financially, do you know what it takes to be considered rich in 2024? It mixes income, net worth, and where you live. The definition of wealth varies, but here's a look at what it generally takes to be seen as wealthy today, using some benchmark standards.
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Income Thresholds: What You Need to Earn
The top 20% of earners are typically classified as "upper class." To make it into the top 20% of earners in the U.S., you generally need to pull in around $130,545 a year. But this number isn’t the same everywhere. For instance, if you live in New Jersey, you'd need about $180,558 to hit that mark. Meanwhile, in Mississippi, it's lower, at roughly $101,447.
If you aim to be in the top 5%, the bar is much higher. In Connecticut, for example, you'd need to earn over $600,000 annually. And if you want to be in the top 1%, you're looking at an income of around $819,324 a year – or about $68,277 a month.
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Net Worth: What You Need to Have
Regarding net worth, having $1 million in liquid assets often puts you in the ‘high net worth' category. But if you want to be considered very high net worth, you might need anywhere from $5 million to $10 million. For those aiming even higher, ultrahigh net worth status could mean having $30 million or more.
Interestingly, the perception of what makes someone wealthy has shifted. According to Schwab's Modern Wealth Survey, Americans now believe you need a net worth of about $2.2 million to be considered rich. This number dropped slightly from 2020, when people thought $2.6 million was the magic number.
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Location Matters: Cost of Living
Where you live plays a huge role in what it takes to be rich. In pricey places like New York or California, the income needed to be in the top 20% is way higher than in states with a lower cost of living. Wealth isn't just about money, though – it's also about what that money can buy, and that changes depending on your location.
Wealth Distribution: Who's Got What
Wealth in the U.S. is not spread evenly. The top 10% of households control a big chunk of the country's total wealth, with an average of around $6.7 million per household. On the other hand, the bottom 50% have an average wealth of just $50,000, according to the Federal Reserve Bank of St. Louis. This gap shows how varied wealth can be depending on where you fall in the economic spectrum.
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Mindset and Lifestyle: It's Not Just About Money
Being rich isn't just about the numbers – it's also about how you think and live. Wealthy people often focus on long-term goals, invest wisely, and build strong networks. They also tend to value experiences and relationships over just collecting more stuff. Many prioritize work-life balance and staying healthy, which they see as part of being truly wealthy.
The Bottom Line
In 2024, being considered rich isn't just about hitting a certain income or net worth – it's also about having the right mindset and living in the right place. Whether you're earning a high salary, accumulating assets, or focusing on personal growth, the definition of wealth today is broader than ever. But no matter how you slice it, reaching that "rich" status involves a mix of financial success and a lifestyle that supports it.
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This article Exactly How Much Money Do You Need To Be Rich? Here's A Look At The Numbers originally appeared on Benzinga.com
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