Rich or Wealthy?

Does it matter? Probably not if we are happy and reasonably financially secure. Benchmarks can be informative, if not helpful, though. For one thing they remind us when discussing money, affordability, frugality and such how relative, how different things can be and how normal at the same time.

An interesting (?) information exercise follows without conclusions or recommendations to move to Mississippi😎

Through extensive research (four AI apps) I have learned that “rich” is determined by income and “wealthy” by value of assets, basically net worth. I don’t know if that is an official definition, but the apps were consistent.

I also learned that you can be rich but not wealthy and wealthy but not rich. Or you can be both. Most billionaires are wealthy, but probably not rich. On the other hand, those Americans with high incomes, but prone to lifestyle creep and luxury car leases, sadly may only be rich. There are some very moderate income folks who will never be rich, but time and financial prudence may help them become wealthy - relatively speaking.

There is another question to ponder. What net worth do you need to be considered wealthy? That’s subject to interpretation. For example, $1 million puts you in the top 10-15%. Is that wealthy? To many people it is for sure. If you want to be certain, shoot for $5 million, that puts you in the top 2-3%. At that level I doubt anyone would question one’s wealthy status - well, Elon may snub you.

A 2025 Charles Schwab survey found Americans say it takes an average of $2.3 million in net worth to be considered wealthy.

But there is more. With $5 million net worth would everyone feel wealthy? That’s a big maybe. Why? Where’s the money? If it’s mostly in a home or other real estate, you might not feel as wealthy as if net worth is in liquid investments. Or maybe you would. I’m guessing some people who feel wealthy don’t even know their net worth.

How much income do you need to be rich?

$200,000 a year seems to be the cutoff, but that is highly variable based on location. The median household income in the US is $87,460 (2025). In Massachusetts it is ~$104,800 and in Mississippi $59,100. Many people in Mississippi would welcome income at the national median.

To further complicate matters, you could factor in the cost of living. Overall estimates from comparison sites put the total cost of living in Mississippi 25–35% lower than in Massachusetts (including or excluding rent). 65% of $104,800 = $68,120. Is Mississippi looking better?

This is getting into spreadsheet territory🥵

So what have we learned that is important to financial planning and management? No much of value I suppose. Or, perhaps that when discussing money and finances, any conclusions must include “it depends!”

One thing pretty is certain, readers are thinking gee, yikes, ummm, wow, okay, or not bad.

The post appeared first on HumbleDollar.