How Much Money Do You Need To Be Considered Rich?

Updated: May 4, 2021

Everyone I’ve met wants to retire rich. But when it comes to financial planning, “to retire rich” is not an acceptable goal because it’s vague and subjective.

Why so?

Ask yourself this question: At least how much money does a person need to have to be considered rich? Is it 1 million? 10 million? Or maybe 100 million?

Furthermore, go and ask a friend next, or raise this question on social media. What numbers did you get? I’m sure you got different answers.

It’s Complicated

As you should realize, it’s a complicated question. Because everyone will have different interpretations of what they consider wealthy.

For example, I’ve heard someone tell me that they’d feel rich if they only have 1 million. But a friend disagrees and thinks that’s too low. He claims that he’d need 50 million before he considers himself rich.

So again, how much money do you need to “be rich”?

Maybe it’s better to look at global numbers. Perhaps, you’re rich if you belong to the top 1% of income earners in the world, right?

If that is so, then at least US $32,400 a year, or in today’s exchange rate, if you earn around P140,000 a month, you belong to the top 1% of the world’s rich according to the Credit Suisse Global Wealth Report 2018.

So if you’re working in upper management or an established professional in the Philippines, then you’re rich by this standard.

However, I’ve met doctors, engineers, and CEOs who don’t consider themselves rich at all. At best, they think they’re upper-middle class, but not rich.

Living a Rich Lifestyle

Maybe, what we can define as rich is someone living like what we see in movies. You know… big house, sports car, designer clothes, and all that gold and glitter.

Yes, they are definitely rich, but how much money do you need to afford that lifestyle? Now that would depend on which country you live in.

I talked to a real estate broker and he claims that a large house and lot in the Philippines would cost around P16 million. But the same property would be around P140 million in Singapore, and that’s why most Singaporeans live in apartments.

Moreover, each person can also have a different definition of living a rich lifestyle.

I’ve met someone who thinks that being healthy is what makes you wealthy. While a manager once told me that living a spiritual and stress-free life with your loving family, is what it truly means to be rich.

How I Define Rich

Clearly, being rich is not solely based on how much you earn or how much money you have. Other factors need to be considered, especially one’s spending habits.

Because it doesn’t matter if you’re earning P100,000 or P1 million a month if you’re also spending at the same rate. You may look and live like a rich person today, but once your income stops, you’ll struggle financially sooner than you think.

Thus, my personal belief is that a person can be considered rich if they can afford to stop working and still manage to live a healthy and comfortable lifestyle.

How? Either they’ve built enough passive income to pay for their needs and wants, or they’ve accumulated enough wealth to fund their preferred lifestyle until they die. And of course, it can be a combination of both.

Be Rich in Your Own Terms

To be “universally rich” – as I’d like to call it – means being able to afford the life that you want.

Whether it’s living in a big mansion or a simple house; whether you have a sports car or a mountain bike; or whether you live in the fast-paced urban city or a rural farm in the province — as long as it is what you desire for yourself, and you can sustain that lifestyle for as long as you want, then you are rich in my definition.

Don’t be caught up with society’s general definition of being rich. You’ll most likely end up disheartened trying to reach an impossible standard.

However, you can also even disagree with me on what it means to be wealthy. Maybe you think it’s not really about being able to afford the life that you want.

If so, then that’s okay because you are allowed to define rich and wealthy accordingly. And in fact, I believe it’s more important to define it with your own terms and parameters, rather than just accepting what other people say it should be.

And then ultimately, making a personal commitment to achieving that goal.

So how would you define someone rich and wealthy? Is it similar or different from how I define it? I’d like to know your thoughts in the comments section.

Enter your email address and be notified if there’s a new article on this site:

3 comments

  1. I’ve once read in a book before the concept of wealth trinity. It refers to 3F’s or the Family, Fitness, Financial independence. Basically the idea is being Financially independent while being healthy and having best relationships. This has become my core value. Then of course i define more detailed goals inline with this core value.

  2. Changing your surroundings might also make you ” feel” richer. When I made my move to the Philippines 8 1/2 years ago and decided that “this is the place” I would like as my early retirement base, it did not take long for me to begin to feel wealthier. Yes, I had some set-up costs such as buying new 220 volt small appliances to replace the 110-115 volts used in my home country. Once settled in, I began to enjoy eating a great dinner out and no guilt feeling that I have busted the budget. Many things cost as much as in the US and some cost far more. Lucky me, most high priced ” stuff” are the exact things I do not need.

    I did take the plunge near the end of year one and with the aid of a hired trustee, purchase a older home in a subdivision that was in need of some TLC as a retirement project. With no rent to pay and repairs getting done at my own pace, life is great. There would be no way I could live on half a Social Security check in the US unless I moved into a small camper truck or van and did not travel much. You could simply forget about owning a home even if you are mortgage free, the real-estate taxes will be a killer in much of the US.

    Now, with more free time on my hands to do as I please, my night time gig of trading options on the US exchanges began to prosper as never before. Life alone is ok but I enjoyed the 27 years I had with my first wonderful wife. Eventually, God brought my second, super mega-smart, Beautiful Bride to me and she added to our marriage three of the greatest kids ever. We are, STILL, in the process of adopting them. the COVID-19 has slowed down many projects. In all of this with expenses now rising, I again feel richer than ever, surrounded by my now larger & growing family!

    Several of Beautiful Bride’s business ideas have taken off like rockets and we are also building passive income streams with some of the profits. We did not have a baby while my Father-in-law was still alive due to a miscarriage, we have welcomed a super handsome (my biased opinion) baby boy into our family 18 months ago. With all the new income sources, we are well able to provide for this crew and I can honestly say we are growing generational wealth from our home based activities. The Philippines has gifted me a wonderful wife, four great children, many new business opportunities and a great quality of life. Yeah, I feel richer than ever in so many ways

Leave a Reply

Your email address will not be published. Required fields are marked *