Rich people aren’t always rich

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This post is inspired by an article I read recently on the CNN Money site. It is about how there is no exact number that would make you rich in everyone’s mind. It says experts say that the number is likely somewhere between $2-$12 million in savings. However, that changes a lot depending where you decide to live as some places are more expensive than others.

That is very interesting and makes sense. Some people that are rich by most peoples’ standards do not consider themselves to be rich. We often hear alternatives to “rich” like well to do, have money, comfortable, well off, etc… People that are rich are less likely to say that they’re rich than those that are not rich and are talking about those rich people. This is partially to not stand out because no one wants to be labeled or targeted. However, it is also because things look very different from the other side of the fence.

If you earn $500,000 a year (after tax), this can make you a millionaire if it continues for some number of years. This is not always the case though. If you buy a mansion in a big city, have nice cars, expensive hobbies and like to travel in style then your expenses can end up being more than $500,000 a year. This would leave you in debt. So would you consider the owner of a mansion, 2 BMW’s, $50,000 season tickets to the local team and monthly trips in first class the life of a rich person even if that person is in debt because of it? Some people still would, but others would say that person is not rich and also not living within their means.

In fact, if that person were to live with annual expenses of about $100,000 which isn’t a terrible life for about 5-7 years, then the money saved would be enough to give you a couple million dollars in the bank. After that time, the level of expenses can grow gradually and as long as they are below the amount earned, the net worth would always increase. This would actually make a person rich. It would also allow that person to develop a more affluent lifestyle over time that would be looked upon as rich and still be sustainable.

Basically, this means that being rich involves more than just a large amount of money that is earned. It requires being financially smart and not pretending to be a billionaire when you’re really only a millionaire. It also means that being rich can mean different things to different people. Many people believe that to be rich you have to earn at least $1 million every year, while others think you need to have $1 million in the bank that is just sitting there with no expense to cover. Both of these definitions can either be right or wrong depending on many factors like age, annual expenses, and annual income.

Being rich is something that is easier to point to in someone else than it is to feel or believe in one’s self. Perhaps being rich has nothing to do with money at all…