Actual Net Worth To Be Considered Wealthy
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- čas přidán 9. 12. 2023
- The Actual Net Worth To Be Considered Wealthy
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If you can pay your bills and have someone that loves you and have good health then you are wealthy.
You get it! Most don't.
bingo
add to it you wake up each day and not have to go to work then its complete wealthy,,
Too beautiful yet too careless
I think that's a great attitude. But I would also like the security of knowing I will be able to pay my bills tomorrow, too - even if I am unable to work. Wealth = freedom AND security. IMO
When I was younger being wealthy used to means:
- Owning mansions in Beverly Hills or Pebble Beach
- Driving nice cars
- Taking women out on fancy dates
- Going out on fancy vacations flying first class and staying at luxury hotel suites
Now being wealthy to me means:
- Not having to worry about losing my job or having to work into retirement years
- Being able to cover unexpected emergency expenses
- Being healthy and in no pain
- Having time to spend with my family on vacations
I live in Malibu California. Here being wealthy really is what you used to think except they fly on their own planes.
You were a child and you grew up and learned.
That's all that happened. Nothing changed. Being wealthy was always primarily about security and wellbeing.
@@markmedley6849no, it isn’t. What he showed is growing up and learning what he really wants.
There are a lot more people who are wealthy using your definition.
The first 4 are you playing geee I wish I was that guy. The next four are you coming down to earth and being honest with your self.
Fantastic video. Really goes to show how society thinks it takes $2.3 million but with $560,000 “I’m doing ok”. Years ago I backpacked the world. I got to see serious poverty. I knew right then and there I was wealthy. Just being able to travel made me wealthy. People in this country REALLY need a reality check!!!
I couldn't have said it better. There are problems with poverty here too of course. But most of us live like kings, even though we may think we're not doing very well at all. Had a friend that lived overseas working with an organization helping people improve their lives. A piece of tinfoil that we may use to wrap a sandwich would be a luxury to many people there. It would be carefully saved and reused until it crumbled. I think of that every time I'm feeling bad because I can't afford some shiny new thing that I don't need.
@@xlerb2286 at the time of my travels, most of India didn’t have toilet paper
Well said. A good friend of mine from the country Laos who immigrated with her Parents to Australia in Asia said if people are unemployed the government does have a social security system like the unemployment benefit - have to rely on family to help them.
I had a minor career setback a little over a year ago. I was naturally a little depressed and pissed but I was still working and making good money anyway that day I had an assignment that had me cover a winter coat giveaway and I had a realization, ok so I lost a nice side hustle but I have never had to stand in line for over 2 hours so that my sons would have winter coats this year. It was eye opening.
@@editorcj that’s precisely what the majority of Americans need to experience.
Real estate investors losing money is music to my ears. They are a major reason why the real estate market is the way that it is now.
Every month when I've paid my bills I have hundreds of dollars left over. That state of conditions seems likely to continue every month until I die.
THAT is wealth. All the wealth I need.
We paid off our mortgage…best recommendation for everyone.
We have enough to live comfortably for many years… we’re not rich but working class retired and we just did everything we could to lower the overhead.
We live a simple lifestyle and are over the big purchases.
But I do consider myself wealthy because I don’t have to answer to anyone’s bullshit.. ever again ! Mission accomplished 👍
no answer to anyone' bs is the biggest luxury in life
@@kathleenwang It really is.
I've easily have surpassed $2.2 mill net worth and I never consider myself wealthy. I live very easily and I enjoy a good life. Living debt free and below your means will make life much more enjoyable.
You're still wealthy!
Same. Have about 7 more years to work, but am already beyond the $2.2 mil mark. I don't even think about it. I live comfortably, but not extravagantly. It's exactly how I like it (and how my kids should learn to appreciate life, not wealth). When I retire one day maybe I'll see it differently (drop the saving mentality). But for now, my family is happy.
I call myself “financially secure” you two are same
When I say the people assume I am wealthy and self made
Reading books has really skyrocket the way I think about investing. Indeed, no one has ever got rich by saving money. If you want to become financially free, You need to Invest.
I've come to realize that the key to amassing wealth lies in making sound investments.
Yeah, You're Right! According to a book writer; 'What everyone needs is to work with a financial advisor, who can help you get in and out of any investment at any time and you'd sure be in profit.
I'm trying to get onto the investing ladder at 40. I wish at 55 I will be testifying to huge success!!
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I couldn't care less about what people think makes me wealthy. What makes me wealthy is I can cover all of my needs and my family's needs even if we faced job loss and unexpected expenses. What makes me wealthy is I have a great wife that is also my friend, kids that are doing well in life and friend groups I see generally at least twice a week.
Agree. I'd rather have $10K per month of income coming in for the rest of my life and zero bills and no house payment....over $2.2 million. Reality is, if you have good family and friends and have enough to make ends meet and enough for a few luxuries and live comfortably....that's wealthy. Wealth is happiness and a few extra dollars to have fun, not a specific dollar amount.
People who think that $560k net worth is 'wealthy' are kidding themselves. Not in this country.
Net worth is an excellent metric to evaluate readiness to retire but not perfect. I worked for a guy who had incredible net worth as well as income but was constantly stressed out about his situation. He was a “keep up with the Jones” type of guy and while he owned a very expensive second home in a high end ski resort that was worth more than what he paid, the cost of owning it was more than he could afford. The result was a healthy net worth but negative cash flow. Ultimately, living within your means is the best measure of wealth.
No amount is enough for that sort of guy, there is always somebody with a flashier watch or a bigger house or a longer yacht or a prettier wife.
Great comment. I live in a place (Marin County, near San Francisco) where everyone seems to constantly be doing the Jones's thing. 1.2 million mortgages, literally bragging about their new Rolex, always the newest e-bikes and e-cars, all that. I drive a 17 y/o prius that I spray painted with rainbows for my girls, we have ridiculous net worth by the standards in this video. While all my neighbors rent tahoe mansions for the winter, we walk downtown, get coffee and treats with the kids, and hit the library. We also go up the coast three times a year, and hit europe once a year, but we don't tell anyone, because why? Sad weird stuff out there in the world. Doing stuff for other people, strange.
True wealth is measure of several things, not just Net Worth. Think Health. Or Monthly (or annual) Cash Flow to support a desired, comfortable lifestyle, How about Spiritual Comfort? Or Amount of True Friends (and Family)?
$2.2 million in small town America is a big difference than $2.2 million in NY city or SF!
If you can’t retire with 2.2million whether in N.Y or SF then you doing something wrong and living waay above your means especially if you have your house
Paid off. Don’t care where you live, at 2.2million u can live anywhere in the U.S
It really comes down to cash flow, how much $ is your NW generating for you to live on?
After retiring I believe I am very wealthy by not having to set my alarm each morning, waking up by the person I love, knowing I have no mortgage or other loans to pay off, knowing I have enough income to pay my gas, electric, water and tax bills and still have change to play with when needed, I don’t have millions but I have my health and so I believe I am very very wealthy. I am also very fortunate but I found out early on in life that the harder I worked the more lucky I got.
Health is wealth!
Beat me to it!!
Plus having necessary life skills to generate income whenever you might need it.
With world markets tumbling, inflation soaring, the Fed imposing large interest rate hikes, the treasury yields rising rapidly, markets manipulations, and many other factors makes me wonder if people still make profits investing.
I don't fully agree with you... With the right steps & predictions, one can make so much profit from the market in a day, do your own research.... Believe me or not as an inexperienced person who knows next to nothing, my net-profit is about +65% just in a couple of months... I'm retired and I am using this extra funds to help pay for odds and ends that I want.
Hi Randolph, your profit margin is quite inspiring and stunning for a starter; do you make use of spreadsheet, what is your biggest holding
@ waynejacobs....Spreadsheets have always seemed incredibly time-consuming, stressful, and of no relevance to me. I mirror Kelly Marie Matwick's positions in real-time and I prefer it because it's very very transparent and everything is automated I don't have to be actively involved...You can give it a try.
it's pretty easy when you understand the market pattern. Buy the dip of good companies. lol.
Turn off the T.V.
Yes, people make profits investing.
I don't feel wealthy, I feel blessed. The blessings have come from consistent work and saving, and paying off my home. Not everyone can do this, that's why I feel blessed.
Retired/age 65. No where near 2.2 million dollars in net worth. Good health, great family, no debt. Savings account (invested) plus pension and social security benefits in future. Contentment!!
Your wealthy!
Pension! That is a luxury most people do not have.
These types of numbers confuse the hell out of me considering that I routinely read that over 60% of Americans can't afford to pay cash for a small emergency.
I would say these are Schwab customers who are participating and are regularly investing, not the man on the street.
@@leisure057blank3exactly. You can’t provide your net worth if you’ve never even calculated it before.
Where you live has a lot to do with how far your money goes and your true net worth. I live on the Alabama Gulf Coast in a newer home worth about $500,000. This same home would cost nearly $1.5 to $2 million in the San Francisco area. My annual property taxes are $1400. I live in a very desirable but smaller city that is easy to get around, so I don't spend much on cars and gasoline. A retired couple with a paid off home can live very well here on an annual income of $70,000 and enjoy membership in a health club and dining at decent restaurants a couple of times weekly, plus attending the symphony, little theater and various other social activities.
Sounds like the wife and I. We have winter home near Gulf Shores, AL, a main residence near Gatlinburg, TN and a Clinch River cabin in Hancock Co., TN.
Jordan Peterson talks about a study that says something like this. Once you get to a point where you can pay all of your bills, anything more than that does not significantly increase happiness.
I love the fact you added text in your videos! Thank you.
A low crime house in Seattle is $2M. A low crime house in a Montana small town is $200k.
In coastal California I’d say $2.5m with the house paid off is good but $5m is the low end of wealthy
$2.5M in coastal CA without a mortgage = wealthy! You live where people vacation. I understand what you're saying though. The wealth here can get extreme (that's why we look at median).
Wow! I didn’t know being an engineer in South America could lead me to be in the 25% top of USA! Thanks Azul, I’ll continue saving and investing for my retirement. Cheers from Chile 🇨🇱
And I would assume you can make that wealth go a lot further in your part of the world. I suppose the only thing one worries about there is Marxist government or rampant money printing to cause sky-rocketing inflation. But really, the U.S. isn't that different in this sense either.
You don’t need much if you live simple. The more you want the more you need. Find happiness without spending money and you got it made.
But you can't "find" happiness living under a blue tarp on a cold street in a large city. You can die trying though.
Yes. The painful lesson i learned is that “wealthy” is living off of 1/4 of the interest of your investments.
It doesn’t matter is that is $30k/year, you are more wealthy than someone spending all of $1 million a year supporting their “lifestyle”.
@@Partysize2some people do that very thing. What’s more is that study after study shows that after a certain point, more money doesn’t make you happier. And that number isn’t very high. Pre pandemic, it was around $70k per household in the US.
You need wealth honestly to have the time to find happiness and all that. Honestly, time is the most important commodity and money buys access to time. Free time that is. Where you have the luxury to focus on random problems that are not your own
I’m technically a millionaire but I am destitute when it comes to the things that truly matter in life.
Understand. My brother-in-law is worth a couple of millions and owns his own business, yet he is currently single after two divorces, never had children (all of the ex-wives had children when they married him), has very few friends because he is a workaholic. He has had a parade of “relationships” with obvious gold diggers who hang around until they learn he will not be taking them on exotic vacations, buying them expensive things or letting them move into his million dollar home.
Wow it is awesome not only do you perceive this but also being able to admit it!!! That's 2/3 of the way there with the last and most important step being to do something about it!!!
It is just a number. More important is cash flow and expenses .
“That’s a path to unhappiness” great quote. All that needs to be said to the hate and the jealously.
“Good luck, that’s a path to unhappiness, goodbye”
When I watch these videos sometimes I beat myself up a bit because I see that I missed those numbers completely. I am still very grateful to be healthy with no depts and in need of nothing..
Health is wealth but health isn’t free. Save and invest your money! Thanks Azul, great analysis.
What wealth we do have is greatly amplified by our frugal lifestyle. Most of what's thought of as wealthy aren't things we're interested in. A mansion comes with a stunning loss of privacy as it requires a staff to maintain. Exotic cars are finicky, too flashy/tacky, and require far too much maintenance to be worth the trouble. Expensive clothes, jewelry, accessories...no thanks, better to be comfortable and we're not interested in going to places like this. Dining out, oh no...I have way too much fun in the kitchen for that. It's sort of funny when you think about how little you really need or even want and how little you need to provide for that, even in retirement.
Excellent Data Azul. You keep coming up with the "Goods".
I love the formatting and style of this video 💯
Good perspectives. I think that one if the major flaws with many of these studies is not considering the cost differential in various geographical locations. This is especially true with housing costs varying wildly. My small southern California beach community house may cost 2X a large midwestern house and definitely has an impact on perception of wealth. Clearly balancing lifestyle and wealth is a significant consideration in retirement
Yesterday there was an article in my news feed "Millionaires are the New Middle Class." Certainly true for me. I am 74 with a net worth of $1.5 million. I do not feel wealthy. I feel middle class. In fact, I AM middle class. I live in a middle class neighborhood and could'nt afford to live elsewhere.
Azul. Thank you for giving us yet another easily accessible piece of data. Hoping the next video has something helpful.
Security and resilience characterize comfortably wealthy people.
Thank you for your work Azul!
Enjoyed the video.
We are in the top 25% and I’m sure we would have been top 10% if I had not stayed home with the kids for 19 years.
But I’m SO glad I did!
I am
Around a lot of top 10% and they don’t seem happier to me.
Happiness is not directly correlated with wealth.
Im so thankful i started saving in my teenage years. I'm still concerned about retirement in10yrs @ 65 yrs old. Health care and inflation are a big concern! Let's hope the S&P500 keeps up a healthy average in the future.
Long-term care expenses are insane. You have to be either wealthy or broke (medicaid) to be on long-term care if and when the time comes.
Thanks for providing 5-year age ranges, and all ranges on one page!
Great info. Savings is not easy with everything pulling at you like kids, bills, life, etc but do the best you can. The more you save when you are young the better. I'm above average in my age group thankfully.
Our net worth is about 600k. BUT...we paid off our house, and car, and our monthly income is north of 8k. Our net worth is growing by about 60k per year. Our buying power is that of a wealthy family, but our net worth is a little low, given our income.
Glad he addressed the issue of age when evaluating financial situation, but the other issue sometimes overlooked it the tax status of savings. YOU don't have money in an IRA, YOU + GOVERNMENT has the money in your traditional IRA. Big difference between someone with 2 million in a Roth IRA vs. someone with 2 million in a traditional IRA. Probably should estimate your net after taxes when calculating your net worth for such a comparison.
It depends on where you live however if you live in an expensive area, you need a lot to retire comfortably.
My wealth is expressed in good hunting dogs and good fly fishing buddies.
These sports are so good for the soul.
I feel so blessed to retire in those fortunate percentages. My wife and I both came from poor families but retired without worries. Happily married is number one. No worries is the icing on the cake.
Just hard work and dedication to living below our means.
I bought my 1st small investment property in an up and coming area 40 years ago at age 27. Continued in real estate investing and am considered ultra high net worth today. I still had + have worries fears and stress. Today I’m happy with health and love and a good meal too. Yes wealth has brought more comforts than I could have imagined. But my god It Really Does Not Buy Happiness.
$2.2M doesn't seem anywhere near wealthy. Living in the US is super expensive, and to me being wealthy means that you don't have to look at the price tag. With "only" $2.2M you are a long way from that
Do you have $2.2 million? Do you know the percentage of people in the US with $2.2 million? Of course it's wealthy.
I agree. 2.2M is nowhere close to wealthy. Let’s say they have $500k paid off house and 1.7 in liquid investments. That leaves you with 70k in income. That’s comfortable, but not wealthy! I am 50 with networth close to $7M. I do not feel wealthy at all!
Love your videos. I am 56 and one of those people who may have 400,000 assets. With I feel very comfortable. Cash only purchases. Cars paid off. No debt other than mortgage.
Getting ready to retire. Net worth of about 1.4 million. Certainly do not feel wealthy, especially with the high cost of everything!! My husband and I do not have extravagant spending habits and we are completely debt free. I would like to be able to say that I am completely confident embarking on our retirement journey, but there is still an element of uncertainty. Nevertheless, super excited for this next phase!!
That is a huge $ , congrats.
From $ standpoint, the REAL measure is how much is your NW generating for you in monthly/annual cash flow to live on. For example, if you have a net worth of $2.5M, according to the two studies talked about here, you are Wealthy! But, if $2.3M is in your home equity and you only have $200k in liquid assets that can generate you cash to live on, I'd say you are NOT wealthy.
However, if you had $1.5M in liquid assets plus $1M home equity, you would be a lot more wealthier than the guy above with the diamond and gold home.
@@FIRED13since you brought up annual cash flow or future income flow then in reality social security income should be counted as an “asset” and part of net worth.
All the numbers reported by Azul seem low because SS income and pension income are excluded.
My SS will be 3,500 as is. My wife half of mine. This is 5,250. Medicare will need to be backed out. But let’s just say 5k per month.
Monthly factor of 12 of course then a 20 factor or so as SS is inflation adjusted. If one wants to be more conservative use 15.
5k x 12 x 15 = 900k SS Asset.
One of my hardest decisions is when to quit saving and start spending.
If you are still wondering, don't because tomorrow may never come. The time is now "no regrets". Enjoy wants left , you can't buy a single minute in your death bed with a million dollars. Time will not be for sale when you decide to try to buy it.
@@paulsmith2279😊❤😂
We experienced the pinnacle of our era, but it is now gone. Like what happened to Rome, the corrupt administration will bring this nation to an end. My condolences go out to anyone who is close to retiring and may be worried about whether their pension will be enough to pay the rising cost of living. Insane fiscal policy, poor regulatory policy, poor energy policy, and poor foreign policy
50 and early retirement. I'm very worried about the future and where we're all heading, especially in terms of money and how to get by. I'm considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
Having an lnvestment advser is the best way to go about the market right now, especially for near retirees, I've been in touch with a coach for awhile now mostly cause I lack the depth knowledge and mental fortitude to deal with these recurring market conditions, I nettd over $220K so far, that made it clear there's more to the market that we avg joes don't know
I’ve actually been looking into advisors lately, the news I’ve been seeing in the market hasn’t been so encouraging. who’s the person guiding you?
Her name is “Vivian Carol Gioia” can't divulge much. Most likely, the internet should have her basic info, you can research if you like
I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.
I felt wealthy when I was 23 and reached $250K net worth in the late 1990s. Inflation adjusted, that’s worth about $600K today, which is not nearly enough to feel wealthy. That’s only one small disaster away from being wiped out.
According to the median figures for net worth, the bottom 50% of the population are effectively broke. Really need about the 75% level just to be comfortable.
On liabilities, no you don’t subtract your car payment! You should subtract the balance owing. Unless you have only the final payment due this is likely much more.
Recently my husband and I just sold two real estate properties in the Bay Area for a total sum of $616k due to foreclosures. We plan to purchase a new house next year, the cash is just sitting in our joint savings account What do you recommend we do? I will appreciate any suggestions
Certain stocks and commodities are a good hedge against inflation, however you need to know what the heck you're doing or better still, seek help from a money coach/invt-advisor
The markets and the real economy are not the same, one has to be cautious for the amount of time it will take rate-cuts to reflect on the market. was way easier for me to navigate the markets not until 2020 stock market crash, I had to source for a portfolio-coach to revamp my entire portfolio and hedge against inflation.
Concisely, I’ve pulled off around $850k after subsequent investments, since using a coach 3 years and counting. I might sell to the tune but not without the approval of my broker as usual I hedged up again in 2022. With guidance I have raked in 140% on a managed portfolio run under a hedge fund by Monica.
this is huge! can you be kind enough with info on the coach that guides you please? I’m in dire need of one as I approach retirement
Monica Mary Strigle, you can do your research for basic info. Sh is often consulted via web site.
For me, up to about $5 million I would consider "working class wealth." Meaning working people, if they save and invest consistently, should be able to get somewhere around that number by the time they retire.
In my mind, real wealth starts around the 10 million dollar mark.
But there are so many other variables.
Obviously u have expensive taste.
Anyone could retire on a million bucks alongside of Social Security. If everything is paid off .
The mindset has to shift from savings mode to spend down mode . Most people aren't gonna make it more than 20 years in retirement. And u don't owe anyone a dime as far as a legacy.
Have fun
@@MW-bz1qeFair enough.There are so many different scenarios.
Way off from reality for 99% of people. Saying 5m is working class wealth is being tone deaf.
Greg: I'm good, anyway, cuz, uh, my, so, I was just talkin' to my mom, and she said, apparently, he'll leave me five million anyway, so I'm golden, baby.
Connor: You can't do anything with five, Greg. Five's a nightmare.
Greg: Is it?
Connor: Oh, yeah. Can't retire. Not worth it to work. Oh, yes, five will drive you un poco loco, my fine feathered friend.
Tom: The poorest rich person in America. The world's tallest dwarf.
Connor: The weakest strong man at the circus.
For what it’s worth, I agree with you.
I totally agree. A few million (in addition to your home) is very comfortable in most cities but not wealthy. Pretty mediocre in expensive cities like here in Denver. The question was "wealthy". Only 1-2% can be wealthy.
True wealth is how many real friends you have.
My wife and I are in our late 50s. Debt free. Worth One million, one hundred & fifty. We feel better than most but not wealthy by no means.
Wealth really is subjective but I assure you when you see poverty the goalposts will move.
We are in our mid 60's and still working part time with a net worth of 4.4 million. We still don't feel wealthy, drive used cars and spend sensibly.
It of course all depends on your definition of 'wealthy'. And I feel like people get 'rich' and 'wealthy' mixed up and aren't sure which one they are shooting for... which is important as they often work against eachother.
In my mind, and I freely admit that this is a personal definition, "Wealth" is an asset you have, and "Wealthy" is having enough assets that it can pay for your lifestyle independant of your ability or willingness to work. How much money you need to be wealthy then depends on your level of lifestyle, and being rich and being wealthy are 2 totally different things. You could have $200k invested while having a lifestyle at the poverty line of $12.5k and be both wealthy and in poverty. Today I would need ~$700k to consider myself wealthy, but in 25 years I expect to need $2M to be wealthy after considering inflation and lifestyle creep. Someone with a rich lifestyle of $500k/yr might need $7M+ to have enough wealth to sustain that lifestyle.
Meanwhile, lifestyle is decoupled from wealth. I could sustain a rich lifestyle... for a few days just on my income, a few months with my assets, and maybe a full year if I tapped into my available debt. But because it is a lifestyle, it doesn't matter how it is paid for, just that it is paid for. The majority of rich people sustain their lifestyle based on their income and the burn rate on a windfall asset (inheritance, lotto, sale of a business, etc). A lot of upper middle class people sustain a rich lifestyle by digging themselves into debt over time. But only a few sports stars, actors, and business tycoons have the multiple millions to tens of millions to have a rich lifestyle that is supported by their wealth alone.
Just better define what your goals are. What is success, what is satisfying, what level of richness do you require, and do you want to pursue wealth or richness? There is no right or wrong answer. There is no afterlife, and even if there was we can't take our riches with us, so as long as you aren't leaving a burden to your family, then there really isn't a wrong answer to if you want to pursue richness of expierence and lifestyle, or sustainable wealth.
Personally, I have had a lot of bad luck early on in life, and now am facing chronic mental and physical issues in the family which aren't likely to put us in the grave early, but will make life far more exciting than the average person will exierence. Because of this, the right answer for myself is to go full pedal-to-the-metal towards the wealth building side of things. My lower middle class lifestyle is perfectly comfortable for me and my family, and as we know that we will have increasing interruptions to work and income generating capacity later in life, we need to build wealth as fast as possible to decouple our lifestyle from our work. It would be foolish to expand our lifestyle, only to have our life interrupted 10 years from now and no longer be able to sustain it.
But not everyone has those same kinds of struggles. My best friend has a comprable income to me, but doesn't have the same hangups and headwinds, and so he lives a much richer lifestyle, and is very generous with it. He is still feeling young enough perhaps that he hasn't realized that he isn't going to live forever, so he has been on a cycle of getting into debt, and then panicking and doing a cash-out refi on the house, and cashing out his retirement to pay down the debt... and then the debt slowly grows, until it comes to a head, and then cycle, rinse, repeat. I think he is doing a bit better this go-aorund and is actually building some assets he will be able to keep this time, but as long as he figures it out before he is a burden on his kids, then there is really nothing wrong with what he is doing. And he genuinely enjoys his life, so I am not about to stop him unless he really gets reckless with his spending and is obviously getting to a fiscal point of no return. I couldn't enjoy what he is doing because I would be racked with guilt and worry, but that is why I am on a different path from him. When he does save money, he manages to save much more agressively than I am capable of because his basic costs of living are much lower. So I suspect he will be able to catch up and pass me pretty quickly once he finds the motivation to do it.
@@philc.9280how could you possibly envision burning through 4.4 million by the time you die?!?!
@@philc.9280 i strongly recommend you start to donate some of that money to your favorite charities. The feeling will be enriching
I have a net worth of 3 million and I certainly don't feel wealthy.
Agree. I have a net worth of $6M and I know that is very good, but I don't feel wealthy. Compared to most people, I am, but in my mind, it would need to be $10M to where I think no matter what happens I have the lifestyle I want.
@@ms8742 are you cash poor? Is it tied up in the house, car or investments?
@@ms8742, If you have $6 million sitting around in fairly liquid assets, you are wealthy.
Really, come on.
Seems strange. I think I feel that way because I grew up dirt poor, and sometimes I look at the numbers and can't believe I really own it. So not logical for sure. @@aldeserrano5490
Hey Azul how do you calculate in DB pension plan payments into net worth calculations? I'm thinking using a fictitious annuity calculation could convert that lifetime of payments into a fictitious "lump sum" amount which you would then add to your net worth? Your thoughts?
Interesting. Thanks for doing this
Location and age play a huge part of this IMO.
Age 30 in a rural low cost of living state it takes a lot less.
A 55 year old in a high cost of living state it takes A LOT more to be considered wealthy
Hello Azul - thank you for sharing all of your experience and knowledge! Regarding the 75th percentile discussion, can you confirm if those numbers represent combined household net worth (i.e., both me and my wife)? I see the chart mentions "using data based on 4,595 U.S. households", but don't want to make an incorrect assumption. Thanks!
I tend to include the present value of a series of pension or social security payments. Obviously as we age and remaining life expectancy drops that decreases. The difference between that and income from employment is that there’s no guarantee of future employment. On the other hand I discount assets in retirement accounts by expected taxation. I also discount the value of a home by 10% to account for sales costs before calculating equity.
Housing values so skew the results that’s it’s hard to make comparisons. You have to adjust for that factor or you will get a false perception. $2.2 million in California is not even close to the same amount of money as in Kansas City.
Thanks for the data
I think a LOT of these net worth numbers are tied up in their houses. 300k or whatever isn't much if 200k is home equity and you are still paying a mortgage.
Yes, home equity is used when adding up your net worth.
You need to subtract liabilities, by definition
Unrealized equity means nothing. You can’t just sell a house for what a website says it’s worth, then have that money tomorrow.
Tying your net worth to an unsold house is tenuous at best. In theory I have a decent amount of equity in my home, but I don’t count it as anything. Hopefully, many years from now, it’s 700k-1m in extra money… but I don’t count it as being worth a penny.
Make more money while you're working and pay everything off. Social Security is often left out of these calculations because, for many, it isn't a lot of money. However, if you both had high earnings for many years, it can be quite significant. Our home and cars are paid for, so we can comfortably live on our monthly SS checks. We retired three years ago and have no plans to to make withdrawals from our retirement accounts until our RMDs kick in.
I enjoy the videos and learn a lot. I'm not a huge fan of the blur to reveal data. I sometimes revisit the videos for specific information. Having to find the exact spot where the whole chart is visible takes extra time. Could you highlight what you are talking about instead?
I almost never feel "I wish I was that person" but often feel "I'm glad I'm not that person"
Outstanding video!
It isn't just that people are spending their money in retirement that the numbers go down once you hit retirement age. The older you are, the more likely that social security and a pension play a larger role in your retirement planning, so you simply never save up to the same numbers as people a decade or more younger than you. And then as you age, even if you never really cut into the principal, the fact that you are living off your dividends instead of compounding them caps you at a maximum, or extremely slow growth compared to younger people who are actively investing, and often investing in much more aggressive and volatile asset categories.
My great grandparents had little to no retirement savings or personal assets outside of their small 2 bedroom home. But between social security, a pension, and military retirement they had a pretty OK retirement. My grandparents didn't go into the military, so they had to have some personal retirement savings to live on to add to their pension and social security. My parents didn't have a pension, so it is all social security and personal savings. My siblings and I aren't counting on social security to be there (or if not cut, we don't expect to get much out of it), so for us it will almost entirely be personal savings. Each generation has had to aim for a substantially higher max amount for savings (and thus net worth) at retirement age, which is the primary reason why older people look artificially more poor than they really are.
Another curious factor is how much of a person's net worth is their home. My parent's generation grew up with the saying that 'your house is your greatest asset', and for very good reason! Their parents and grand parents didn't have easy cheap access to other financial savings and wealth building vehicles in the same way as younger generations, and so home ownership was the best way to lock in your largest lifestyle costs to the time period your home was purchased, which then allowed for literal savings to be a viable option. So my parents and their friends all bought the largest homes they could buy, all around the same time when they all got married and started having kids. My parents had a little more assets at the time, so they bought a larger home in a more rural area, while their friends bought much smaller homes in suburban areas. Those small suburban homes cost a lot less up front, so when their time came and they caught up on income, they defaulted to putting much more into stocks than my parents could afford to. In spite of similar lifestyle and income, the compounding of 40 years in markets vs 40 years largely invested in home repairs and maintenance made for a massive difference in wealth. My parents had to sell their home and move away, while their friends finally sold their homes and moved into their dream homes in state for retirement. Nobody saw that coming, and all of them bought the largest house they possibly could at the time thinking that was the best option, but those who were forced to buy smaller homes up front ended up being the wealthiest in retirement because they had to default to putting a much larger amount into other investments that appreciated faster and had fewer costs than their home did.
I think the lesson to take away is to not have any single asset be a majority of your net worth. Home ownership is a great thing, and your home may be your single largest asset simply because of how expensive homes are; but if your home is the majority (50%+) of your assets, then you run the risk of having to uproot your life at retirement when you really want to settle in, or spend your efforts traveling instead of moving. And you still may move in retirement anyways, but not being forced to move is a good position to be in.
My house is half of my net worth of one million. My location is perfect for my retirement years. My pension and SS is enough for my living expense. What not to like? I'm 91 years old.
I’ve been diligently working, saving and contributing towards financial freedom and retirement, but since '20 pandemic, the economy so far has caused my portfolio to underperform. My question is this; do I look into alternative sectors, or keep contributing to my 401k?
diversification is the key, that way your investment is balanced and you don’t get to make so much risks or losses
Truth is, not everyone can be a successful trader/investor, my job doesn’t permit me the time to properly analyze my holdings or evaluate stocks myself, so I've had a trusted advisor actively restructuring my portfolio over the past 5 years now, summing up nearly $1m in return on investments ... maybe you should do the same.
Aileen Gertrude Tippy'' is her name. She is regarded as a genius in her area and works for Empower Financial Services
The secret that most financial advisors don’t tell you is to push to reach the $1M level in investments so you can shift into the high yield world of private investments that won’t subject your portfolio to ups and downs. You’d ride along with the wealthy at 12-15% a year, every year. They just figure you’ll never get to $1M portfolio in the first place.
Stock market is higher than it has ever been. your ivestments must be in the wrong place. Go Joe.
In college, it was often said if you had a roof over your head food in your stomach, enough money to cover expenses and happy more just gets green so it became the difference between need versus greed people today are more greedy because you will never have enough except a bigger hole, so what makes you happy not as much as you think what makes you wealthy as something different get seriously ill be given a sentence of death with brain cancer. It all came down to two things out of everything in my life. It came down to two.
Income of $180k before taxes but live on just $66k per year comfortably because of a paid off home and 0 debt. With SS income when we retire (soon) we know we’ll be in good shape because of our disciplined habits and high savings rate. It’s really all about expenses.
Wealthy to me means your passive income pays for all your expenses. This will be different for each person. If you want to travel and have hobbies then I think 2.3million is the minimum 3-5 million would be more inline with what I feel is wealthy.
How does one go about finding a dependable fee-only financial planner? Are there success measures to look out for? What is the typical price range for such services? Thank you for your content!
Another big factor is where you live…$2m in New York or New Jersey is not the same as the Midwest.
2.1 m networth , no debts but feel poor!! Why?? Single male Retired at 57 with a DB pension and several investments. Hired a financial planner and he said "spend". Lol 😆
Good question. You're doing pretty well, but you can blow 2 mil pretty quickly. I'd say spend, carefully.
I think your pension makes you rich because you will not need to touch your money. I quit my job last year, but I can't not work as 51 year old, I don't want to spend my savings yet. I can live off of incone from dividend/interest but then I won't have any growth in my savings and medical insurance( 600 dollars on market for single person). So, I will enjoy my break until mid 2024 and then might look for work. I m in same net worth range as you, but can't fully retire yet. Great job..
Just got into the upper quartile for my age group, as single man with lower than average income.
Relocating was my second best decision. It's not how much you make it's how much tou can save.
I live a very simple life, 1,000 sq foot older home that’s paid for, two older vehicles paid for, $750,000 in banks and investments. Monthly income provides my needs, wants and allows me to save. Have good fairly health and good health insurance. I’m in my mid 60’s. I’m blessed, but don’t necessarily feel wealthy.
$3.3 million net worth. Middle class, still watch my spending and overhead.
I’m single, male, 75 years old. Retired. Net worth 1.8 million. I lived and worked in Morris County, New Jersey for my entire working life. I moved to North Texas two years ago. In New Jersey I didn’t feel wealthy. In North Texas I feel wealthy! 🤠
Interesting information--thanks.
Hmm. Wealthy to me is: I don't _have_ to work and never have to work ever again. And I don't have to constantly think about the budget. $560k is not enough for that.
And then there is health care. I'm fortunate in that I'm covered by the VA, but my wife is not. As long as you live within the US healthcare system, your nest egg … just isn't ever big enough.
If we'd just move to universal health care suddenly all that associated financial worry disappears and that "dollars needed to retire" number shrinks dramatically.
Fascinating studies on perception. Thanks for sharing.
Yes I think this a very relative term . I am retired and have sufficient recourse to support myself. But in terms of what is regarded as wealthy I am not. I have liquid assets amounting to about $550,000 . But I don’t live a high life and am not a big spender so this is more than adequate for me.
Dang I thought I was doing well but dropped out after the 75%. Oh well I am very blessed, even if I do worry now that I am retired.
Your net worth is your score in the game of life!
When you have 25X your annual expenditures in working assets, (Brokerage accounts + rental property).
This would allow you to withdrawal 4% a year to live on with a very high certainty of never running out of money in your lifetime.
Must state whether net worth is only financial assets or includes the value of your house. If you live in LA in a $2 million slum and have $75,000 in the bank, it's not so cheery.
I enjoy your videos but why all of the edits - slight zooming in and out - just not needed and aggravating. And also all of the micro second cuts while you are talking - please just let the video run without all of that. Great info.
10M in assets that cashflow. That’s my number. You can have an upper middle class life like a doctor or lawyer and still keep getting richer without working. If it’s invested in dividend growth stocks then you’d make about 2 percent a year so 200k. The dividends should also grow faster than inflation on average.
The author of Good To Great (Jim Collins) coined a phrase, "Big hairy audacious goals (BHAGs). $10M sounds like a great BHAG to me. Just make sure its what is important to you ... good chance that if you retire with $10M, you'll die with $20M+. That's alot of utility left on the table. You do you and enjoy the journey.
2.3 million is probably not all that much for someone who wants to live an extravagant and fancy lifestyle in retirement and will be blowing through 200K or so per year. But for someone who is completely debt free and enjoys the simple things in life and has no need or desire for fancy cars, house, clothes, jewelry, expensive vacations, etc. 2.3 million should be more than enough, especially if they live in an area with a reasonable cost of living. Whether or not a certain dollar amount is enough to considered wealthy really depends on how much someone spends, and so that number will be different for everyone.
Great info.. I wonder if $$$$ in retirement accounts (have not yet paid taxes) is accounted for here. The reality is $1 in retirement account pre-tax is really worth maybe 80 cents after taxes, give or take ?
When you retire it’s all about receiving income from your assets. One person could have $1M in equity on their home but still owe $1M on a mortgage they need to cover monthly. Another person could have $1M equity in rental property that generates $100K/yr income after expenses.
That first persons net worth would be zero. Assets less liabilities is net worth
Equity of $1M. The property is valued at $2M
Ahhhh, ok@@cbayman869
So many people don;t understand this simple concept. Net worth in and of itself is a meaningless number. What counts is how much income do your assets generate? The financial industry has brainwashed people that net worth is a big deal because the simplest, surest way to becoming wealthy doesn't involve stocks.
The house you live in is net worth granted. But it not an asset, assets put money in your pocket. Liabilities cost you money. To be free or retired your assets will need to pay you. Great book is rich dad poor dad.
I lived and worked in the Middle-East for 10 years. The packages there for professionals are $$$$$$$$ (tax, bills and insurance free). There you'll learn the difference between rich and wealthy. Wealthy people buy atolls in the Maldives to develop, father and eldest son don't fly together (1st class of course). Whilst rich people, well.... their assets, net or gross, isn't in the same stratosphere.
I think where you live is the determining factor as well. 2.2 million is not much in California. The average house in our neighborhood is 1.5 million, and the average income is 175,0000.