How To Define Rich

[Yavin4]

First, find your Net Asset Value, which will be the sum total of all of your assets (your home, your savings, your investment portfolio, and any other assets you may have) minus the sum total of all of your liabilities (the remaining balance on your mortgage, outstanding balance on your credit cards, student loan balance, outstanding balance on your automobile, etc.)

The difference is your Net Asset Value (NAV). Your NAV could be positive or negative. If it is negative, then you are automatically NOT RICH.

Second, find the average(mean), POSITIVE NAV for all Americans.

Finally, if your NAV is three Standard Deviations above the mean, positive NAV, then you are rich.


Also, please note that I did not consider income in my definition. Income DOES NOT determine how poor or rich you are. It's more than possible to make $50 million a year, and have $75 million in liabilities.

Being rich or middle class or poor depends on your total NAV. How much you own minus how much you owe.

[begin_within]

1. So what is that national average?

[Yavin4]

7. Good Question. I Don't Know Where To Find That Answer

But the formula is still true.

[BlooInBloo]

2. If you have to work, you're not rich....

Detail beyond that isn't terribly interesting.

[RUMMYisFROSTED]

4. Not worth discussing , anyway.

[Yavin4]

6. In Order To Not Have To Work, Then You Must Have Positive NAV To Live Off Of

Which is my point.

[sandnsea]

3. Oh bullshit

If you owe $75 million on a bunch of cars and yachts that you don't need, then you're still rich.

Income absolutely matters. Income is what gives you the ability to invest and create wealth.

If you earn over $100,000, you're rich or you will be -- unless you have a medical expense which is why you ought to support single payer health care.

[Yavin4]

5. Not True

"If you owe $75 million on a bunch of cars and yachts that you don't need, then you're still rich. "

Not true at all. You have a $75 million liability, and if you cannot pay that liability, then you are broke, and your creditors can seize your assets to pay off that liability.

"If you earn over $100,000, you're rich or you will be -- unless you have a medical expense which is why you ought to support single payer health care."

Wrong again. $100K maybe a fortune in Manhattan, Kansas, but in Manhattan, NY, it won't make you rich, given the cost of living in NYC.

Also, income only matters if you use it to acquire assets that grow over time. Look at Ed McMahon. He made tons of money throughout a long, long career, longer than the average entertainment career, and today, he is flat broke.

[sandnsea]

8. Exactly. Look at Ed McMahon

My god how stupid was that. I didn't feel any more sorry for him than any of these rich bankers who lost all their money. He was rich. He's probably still rich compared to 90% of the country.

Why don't you go do a fundraiser for Wall Street if you feel so bad for these rich fucks. I chose a name years ago, $treetAID. Like FarmAID only really fucking stupid.

[Yavin4]

10. I Don't Feel Bad for Ed McMahon

My point is that income does not make you rich.

As for making $100K making you rich, in NYC, a salary of $100K means you take home about $5K a month, after city, state, and fed taxes.

Apartments in the NYC area go for about $1800 a month rent. Add in utilities, phone, internet, transportation, and your monthly nut before food, clothing, and other obligations is about $2200 a month, which is almost half your monthly income. Add in living expenses, food, clothing, etc. and you will wind up spending about $1400 a month.

Thus, the $5000 take home pay winds up being, $1400 a month for you to build up an asset base, that is if you don't have any other obligations like credit cards or a student loan or medical expenses. If you don't then your potential net asset value from a $100k salary is $16,800 per year.

[SoCalDem]

9. It depends on what you OWN vs what you OWE

:)

[mainer]

11. It's being able to never have to work again in your life

and never worry about going bankrupt because of unexpected expenses like health care. Which requires you to have adequate assets to draw on for as long as you live, plus a nice safety cushion.

[MajorChode]

12. What you are describing is how you define being wealthy

Defining rich is a bit trickier. A person who has a high income, but blows it on hookers and booze may consider themselves rich because they are living exactly the lifestyle they want.

Someone once said something to the effect that they were rich because they lived in a climate controlled house and ate virtually whatever they wanted for 3 meals per day. Most of the world can't say that. So it's all relative.