My wife and I are currently considering some drastic changes to our life so that we can pursue financial free dom even sooner.

This will involve downsizing to a smaller house/condo, and selling our boat (which is pretty much our one luxury item currently).

Our dream is to get as close as we can to living off her salary alone, and for me to quit working while also buying a small apartment complex.

Our goal is to both be self employed within the next 5 years within our own real estate company.

To answer directly, rich to me would be about $2 to $3 million, after tax.

If I were to suddenly have that amount, my wife and I would both quit our jobs, choose where we wanted to live permanently, and most likely pursue some business opportunity in that location.

I don’t think we would make any large material purchases – maybe a vacation to celebrate. I haven’t had a day off in over a year due to taking anew job with a vacation waiting period.

We both have jobs that we enjoy, but we would prefer to have more freedom in our lives from day to day.

I agree with Wanzman. The idea is to replace a certain level of income that will make you happy with investment/passive income – thereby achieving time freedom.
Time freedom = Rich.

Throughout my career I have always chosen quality of life over salary. I could easily be earning twice what I do and do only that. I’d rather live than work. I have enough to cover expenses comfortable and to pay for my very expensive hobby that gives my life purpose and fulfillment. Despite the fact that I still have things that I want and can’t afford, I feel rich because my life provides me with more than what I need.

I think why materialistic things come up is because its what lack of money makes us think of. There are upgrades to my home, things I’d buy, but I’m holding off until I have the cash. On the other hand, in the long term I’m more concerned with not working a 9to5.

Being rich requires zero dollars. It is a state of mind.

I just posted about this! Something in the air, perhaps? I certainly feel I’m living a more abundant life when the air is warm and the sun is shining.

“In the end, being rich has nothing to do with money. It has to do with being happy with what you have and not desiring more. Being rich is having enough.”

Trent, I agree with the bulk of your post, but this nonsense in the last paragraph is a pet peeve of mine. Why do people feel this incessant need to redefine words that already have a clear meaning?

“Rich” absolutely DOES have to do with money. No, someone earning minimum wage with no savings is NOT “rich”, regardless of how happy they may be. And yes, a billionaire is most definitely “rich,” even if he cries himself to sleep every night.

What you’re doing is trying to conflate spiritual and emotional wealth with financial wealth, and all it ends up doing is confusing people.

“Rich” has a clear meaning already. It means you have a lot of money. It says absolutely nothing about a person’s level of happiness, satisfaction, or contentment. It JUST deals with money. That’s it.

If you want to talk about the disconnect between money and happiness, then that’s fine, go right ahead – but please stop trying to redefine “rich” to mean “happy.” It’s annoying.

@Steven:

You’re wrong. No one looks at a penniless beggar and calls him “rich,” just because he has a smile on his face. Get real. It makes for warm, fuzzy rhetoric, but it doesn’t hold up to logical analysis. In the real world, that’s just not how people use the word “rich.”

“Rich” means you have a lot of money. “Happy” means your happy. They are not interchangeable.

Agreed with Kevin.

Redefining words is a counterproductive exercise. “Rich” is a word that, by definition, means having abundant material wealth. If you want to make the point that happiness/ debt freedom/ personal satisfaction is more worthy goal than being rich, that’s fine, but make that argument instead of trying to pretend that “rich” means something that it does not. At the very least, specify if you’re going to refer to “emotional richness” or something like that.

There are 18 different definitions of “rich” Which one are you talking about? If you instantly asked someone how much money its takes to be rich. Well then you are leading them on the path of talking about the monetary definition of “rich” This conjures up images of Richy Rich, billionaires etc… But you are talking about what makes your life rich, so you essentially have tricked them. Throw in some financial independence and happy talk and you are mocking them for their answer.

What you should have said, “How much money does it take to have a rich life?” You would have gotten very different answers, but I am guessing that was not you objective.

I can tell you want is not rich, this post.

My idea of rich is enough money so that I can make life decisions without money being the deciding factor. More money = more flexibility = rich.

I agree that one would not consider a penniless person rich, regardless of how happy they are. But perhaps “rich” should not be taken so literally here. I think what Trent is getting at is a “rich life” — a fulfilled life. And again, I would agree that you don’t have to have oodles of money to have a fulfilled life. I’m sure it certainly helps though!

Here’s a unique perspective to consider: I have a cousin who is 25 and multi-handicapped. She cannot take care of herself, yet she is one of the happiest people I know. Her needs are taken care of and then some. She is loved. She gets to do her favorite activities all day long. She attends a great “school” for handicapped adults. She has no stress, no worries in her life. My aunt likes to joke, “T thinks she is normal and everyone else has the problems.” Now, would that be considered a rich life, despite the unusual circumstances?

She has the mental capacity of a 3 year old and is unaware of how different she is from others her age. I know that some would argue that simply being handicapped means she can never have a completely fulfilled life, which I disagree with.

I just googled the definition of “rich.” There are fourteen different definitions for the word. Kevin, you’re right. The word “rich” does mean “Possessing great material wealth.” Trent is right too, though. The very next definition is, ” having great worth or value.” So, in the context of this post, the word “rich” does fit. The whole argument puts me in mind of J.D. Roth’s mantra at Get Rich Slowly…Do what works for you. If you value monetary wealth, go for it. But if money is not your first priority, that is okay too. Become financially independant and use the time you have left to do something you love.

Interesting post. Lots of food for thought. I’d like to think if I had a lot of money, I’d use it to live simply and basically do whatever I wanted (i.e.; not work for a living!).

Rich means having more than enough. Having enough is surviving.

Using Monica’s cousin as an example, she is very happy (rich) because the life her family provides far exceeds what is needed for survival. If she was in a facility tending only to her basic needs, I doubt if her life would be as satisifing.

@Kevin- Are you implying that the poor cannot live a rich life?

And what does “in the real world” mean anyways? Is there an “unreal” world? Maybe it is a matter of perspective and priorities…your definition of rich will leave people always wanting for more while my definition of rich will leave me satisfied with whatever I have, no matter how little that may be.

I may find richness in my relationships with friends and family or in enjoying the songs of the birds while others are searching for richness in dollar bills, toiling away at a job where they are not happy, sacrificing time with family and not concerning themselves with the sounds of the birds…

Their life, my life. We make our choices based on our definitions.

steven – you are speaking of riches metaphorically, Kevin is speaking of them literally. There is not “your” definition and “my” definition. Words have specific definitions. You can’t change their definitions to make yourself feel warm and fuzzy.

You betray your own definition when you ask “Are you implying the poor cannot live a rich life?” The implication is that those without money are, indeed, poor.

Being rich means getting enought money, to fulfill those two goals:

1) Spent like 1/3 of it immediately on things like house, debts, stuff and some hard value like gold (to keep being rich during/after financial crisis, when paper money lose value, etc)

2) Invest the rest in many distributed ways of how to get montly rent. Which should be high enought, to let me travel all those places around Earth, to try all those sports and hobbies,… Things, that I would, shouldn’t I have to work as corporate slave to pay all rents, food,…

It’s Parkinson’s law at work. Expenses will rise to meet income. Being “rich” is in the eyes of the beholder. Good article.

I was talking this over with a friend recently. Yes, if I had unlimited funds I’d travel more. I’d definitely get a dishwasher, and would pay someone to clean for me! But for the most part my life is great and I know it.

Well there is financial independence and then there is being really rich. The former would be being able to live your current lifestyle forever without working. The latter would be being able to live either a higher lifestyle or giving money to charity or startup investors or whatever all without having to work… For the former I reckon we need about $2 million. So double that for the latter.

I’m not sure I am speaking of riches metaphorically. Can I not live a rich life without a lot of money? Can a poor man not be rich? Must richness be solely linked to money? I, personally, do not think so. With 18 definitions, not all linking richness to money, it is difficult to say that one person is speaking literally and the other metaphorically. It is a matter of interpretation but neither is more right than the other.

While my life feels rich (abundant) without significant money, those who link a rich life to money will find dissatisfaction without what they perceive to be ample wealth in order to define a rich life.

If nothing else, how we define rich speaks volumes about the person and what our core values are. Mine, unsurprisingly, don’t revolve around money…though I understand its importance.

I agree with Des and Kevin about making up definitions. “Rich” means different things in different contexts, but in this context it means “having a lot of money,” and you don’t get to redefine it to mean something else just because you don’t think there should be a word that means “having a lot of money.”

But state of mind is relevant too, since how much money is “a lot” is subjective, and relative. Most of us reading this blog have a lot of leeway in whether we see ourselves as “rich” or not. Compared to everyone else in the world, we’re rich. Compared to the people in our hometowns, we’re less rich, and compared to the people we see on TV, we’re downright poor. But a billionaire is rich no matter how you slice it, and someone with no income and no savings is not.

@Steven:

“Are you implying that the poor cannot live a rich life?”

Not at all. I’m implying that a poor person is not “rich.” Mainly because the two words have exactly opposite definitions.

The title of this blog post is “What does it mean to be rich?” It’s not “What does it mean to LIVE RICHLY” or “What does it mean to have a RICH LIFE”, it’s “What does it mean to BE RICH.”

To “be rich” means you have a lot of money.

That’s all.

It means you have a lot of money. Any attempt to redefine it is arrogant and absurd. If you walk up to a stranger and show them a homeless person and Bill Gates and ask them “who is richer?”, they would say Bill Gates. Every time. Guaranteed. Not one single person would answer, “Well hold on a second – which one is happier?” That’s nonsense. Every single person would say “Bill Gates.” That’s just reality.

Kevin:

Arrogant and absurd? Really? Wow what a pathetic narrow view of the world you have. Rich is not defined “only” in monetary terms. It has many meanings. When you say a Chocolate milk shake is “rich”. Does that mean the drink has lots of money? Come on get off of your high horse.

I suppose I will be arrogant and absurd then since I prefer to define rich differently than you. This isn’t to say I am unaware of the other definition of rich in terms of money, just that I will not define the richness of my life or how rich I am in that way. It is exactly this attitude about money that I want to avoid in my own life. Money defines us. It is a measure of success for so many people and unless one has a lot of money, they cannot be satisfied in their lives.

Why not look at it through another lens and see that richness may not have anything to do whatsoever with dollar bills but instead with the quality of life you are living and the amount of satisfaction within it. Be happy with what you have rather than focusing on what is “missing”.

I’m sure there are people out there with money up to their eyeballs but are not rich. Even if you focus solely on the monetary definition, rich is about perception and situation and means different things for different people. A million dollars could be enough to be “rich” for one person but hardly enough to survive on for another.

The title of this article is not, What is the Definition of Rich? It is, “What Does it MEAN to be Rich?” You define it with money, I define it by quality of life.

Congratulations on Matthew. What a beautiful little boy!

When I speak about habits and attitudes related to money I frequently ask people to define “rich” and “poor”–related to money. When they were young did they think they were rich or poor relative to others? What led them to those conclusions? Who did they consider rich or poor? What attitudes did their parents have? Did they speak about “rich Uncle Joe” with admiration for his hard work or did they accompany his name with being dishonest, lucky or comments like–sure he’s rich, but he never does anything to help us out. When they talked about someone being “poor” did they associate it with bad luck, bad choices, being irresponsible, being admirable, being a burden? Did they feel they wanted to or needed to help that purpose and what was their attitude about that?

I totally agree with all the comments that how we define ourselves in terms of rich or poor is completely unrelated to the amount of money we have, but is our perception.

I know people who travel several times a year to exotic places, eat out a few times a week (at cafes, nothing fancy), have no debt, have savings, and stable income without working. They are able to help their children and grandchildren with expenses. They have a 10-year-old car and a house that isn’t huge. Are they rich? I think so. They may not have millions in the bank, but they live a fantastic, full life with no financial worries and are even able to help others.

What does it take to be rich? For me, enough to do some traveling, take care of monthly expenses, not worry about the car breaking down, a leaking roof, dental work, etc. I’d want to help my adult children to finally buy homes of their own, and make sure my grandkids could go to college. There are lots of charities I’d love to sponsor if I had the funds. If I won the lottery tomorrow would I quit my job? Maybe, maybe not. I really like what I do, but at my age there is so much I have wanted to do and couldn’t afford, that I would probably take a leave of absence, then return to work.

If I thought about what it would take to be rich, that would take millions and would include nice cars and a bigger house and traveling likely mostly to visit relatives that I don’t get to see as often as I’d like. And enough money to travel when my kids are older and start a bakery 10 or so years down the line. If I’m just talking about a rich life, I think I basically have that now. If someone handed me a check to pay off my credit card balances and my student loans that would likely clear up enough cash flow to meet the few desires I have now would be nicer (more money to retirement, college savings & insurance or possibly a car that can hold people in addition to the two car seats in the back).

I’m still stuck on the first part of your post. If you could, you’d really give your kids long-term financial independence? And how do you think they’d end up? Or their kids? I’d much rather give my kids the opportunities to find things they love to do that also bring in some income rather than just money. If I had the income, that would probably mean some travel opportunities, some exploring time, but not “long-term financial independence.”