When someone says “rich”, what number hits your mind? And by rich I mean having enough money not to have to work unless you choose to do so, presumably because you actually love what you’re doing. I’ve always thought one million as a lot of us do. But now that doesn’t seem quite so, what’s the word…lasting?
CNNMoney.com asked the question, “how rich is rich?” and came up with some very interesting answers.
First, rich must be defined. What do we really mean when rich comes out of our mouths?
Wealth is a subjective concept, but one thing is universal in most definitions: being able to live a comfortable life without having to work.
But a life of comfort is certainly subjective. If I didn’t have a mortgage, I know for certain I could live on $2,500 per month. That’s me, my wife, and our three kids. How do I know? I’ve done the math. That would give us plenty to live on and save. But that doesn’t mean I’m anywhere close to others:
“I’d like to have enough money so my family and I wouldn’t have to work anymore or worry about the necessities, and maybe travel a bit,” said Deborah Veale, a Southern California resident visiting New York City.
So, what’s it going to take to not “have to work anymore or worry about necessities”?
Veale said she’d need about $10 million to consider herself set.
Really? Does this shock anyone else as much as it did me? $10 million? I can’t begin to wrap my mind around that figure. If you thought everyone’s definition of comfort was the same, that last figure should make you doubt at least a little. Luckily, a few other respondents came in lower.
One woman from Seattle put it at a “couple thousand dollars a month.”
Experts (always nameless of course) came up with a range of $2 million to $12 million in savings to be able to retire in the comfort zone. Why the disparity? It’s a simple equation of geography.
On the high end of that range, a single person living in an expensive part of the country (say, New York City), wanting to retire at 35 would need at least $300,000 a year to feel rich, according to Steven Kaye, president of Watchung, N.J.-based wealth management firm American Economic Planning Group.
This would give said person a twelve grand monthly spending allowance after paying for a modest apartment in Manhattan. I’m not knocking the twelve grand. I’m simply pointing out that what constitutes comfortable for one person might be extraordinarily comfortable for another.
What do you think? Does your “comfortable” number continue to rise? Think about your retirement in terms of geography. You may need less to retire on than you think if you’re willing to move to a lower cost of living area.
Read the entire article at CNNMoney.com.