When financial and tax "experts" refer to the rich or wealthy as in statements such as "this will only affect the rich" or "this only pretains to the rich" or "only the wealthy will be affected", exactly who are they talking about? Do such statements refer to an individual's tax bracket? What dollar figure or net worth figure entitles one to be labeled wealthy?

mawhinney asks,

When financial and tax "experts" refer to the rich or wealthy as in statements such as "this will only affect the rich" or "this only pretains to the rich" or "only the wealthy will be affected", exactly who are they talking about? Do such statements refer to an individual's tax bracket? What dollar figure or net worth figure entitles one to be labeled wealthy?

You won't find an absolute figure. Most people consider "the rich" to be anyone who has one dollar more than they have.

intercst

I remember seeing it said somewhere in a rundown of government figures during some debate regarding taxes/IRS that anyone earning more than $75,000 per year was considered "rich."

To carry out this discussion farther, I once read that wealth is an abstraction, measured in terms of things besides possessions and money. For example, if you have good health, a loving family, and food on the table, you could be considered weathly. Being rich is a more tangible quality...having lots of possessions and money. So, to a large extent, most of us are wealthy!

r.s.

***For example, if you have good health, a loving family, and food on the table, you could be considered weathly. Being rich is a more tangible quality...having lots of possessions and money. So, to a large extent, most of us are wealthy!***

I think I would rather be wealthy and rich, than Wealthy and poor

It's all subjective and I differeniate wealthy and rich. With a net worth just over one million, mostly in investments, I consider myself wealthy. I'm financially secure and can live comfortably, but I won't be chartering a jet for my next vacation. To be truly rich today I think you need ten million or more. That said, my parents would have considered anyone with a million to be rich.

<I remember seeing it said somewhere in a rundown of government figures during some debate regarding taxes/IRS that anyone earning more than $75,000 per year was considered "rich.">


This is one of those questions for which there is no hard, firm answer. There are many people who make considerably more than 75k per year, yet continuously live on the edge of financial disaster. I think to get closer to the truth, you need to consider the old saying that "it's not what you make, but what you do with what you make". By no means does high income = wealth.

There are many individuals who never have made anything close to 75k in salary and yet have become financially independent. Those people automatically save something from their salaries. They also are very aware of the expense side of the ledger. They avoid CC debt and make a clear distinction between wants and needs. You can find a lot of them residing over on the Retire Early Home Page.


BRG

Hi Mawhinney

You asked When financial and tax "experts" refer to the rich or wealthy as in statements such as "this will only affect the rich" or "this only pertains to the rich" or "only the wealthy will be affected", exactly who are they talking about?

You have already received some interesting responses to your question. However, it reminded me of a column by Scott Burns in the Dallas Morning News. That column did not answer your question, but it provided some hard data on the rich and wealthy.

I could not find the link to it because it is a little dated (June 4, 2000), however, I did save the “Distribution of Wealth” table that was published with the article. He took his data from the VIP Forum. It represents the required net worth of U.S. households in order to fall in the listed percentiles. The values in the following table (arranged by age of senior member of the household) are expressed as thousands of dollars - Interesting numbers!

Age		Top 1%	 Top 5%	Top 10%	Top 25%	Median
80+		2,957.8	  693.0	440.0	 252.2	118.0
70-79		4,338.1	1,074.5	703.4	 316.5	140.9
60-69		6,263.4	1,850.2	902.8	 356.7	155.8
50-59		5,791.7	1,410.6	708.8	 326.7	120.9
40-49		3,402.7	  829.0	531.6	 226.8	 86.2
30-39		1,210.1	  451.1	267.5	 127.4	 34.7
20-29		  383.3	  148.2	 78.3	  25.4	  5.2

Semantics are so interesting - in my "language" my differentiation between rich and wealthy seems to run counter to that of others - in my language, wealthy is so much more than rich ... the word wealthy suggests not only deep pockets (usually worn by more thant one generation), but social status, connections, power; and, oddly enough, in my books the "truly wealthy" are seldom if ever ostentatious - the state of being wealthy is not a novelty to them, so often they lead somewhat ordinary, albeit very comfortable (and the word "comfort" in this instance, indeed lends a whole new meaning to this seemingly humble word), lives. The rich may have more $$$$ - but may lack class and gentility.

my differentiation between rich and wealthy seems to run counter to that of others

If you really want to know if you are wealthy, then count up those possessions you have that money can't buy!
rclyde

Here's one approach to the question of who is wealthy. http://www.geocities.com/WallStreet/8257/millbook.html gives an online calculator for assessing wealth relative to income and age. It comes from The Millionaire Next Door: The surprising secrets of America's wealthy. by Stanley and Danko.

Excerpt: Computing one's expected net worth:
Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be.

Excerpt: The authors have developed a simple rule of thumb: if your net worth equals the average calculated by the formula above, you are an AAW, if your net worth is twice the average, you are a PAW, if your net worth is half the average, you are a UAW. Whatever your income, if you want to Retire Early you must be a PAW.

PAW is Prodigious Accumulator of Wealth, or maybe "Wealthy"
AAW is Average Accumulator of Wealth
UAW is Under-Accumulator of Wealth

Your question was When financial and tax "experts" refer to the rich or wealthy as in statements such as "this will only affect the rich" or "this only pretains to the rich" or "only the wealthy will be affected", exactly who are they talking about? The term "rich" is not copyrighted; people are free to use it as they see fit, with or without clarifying their meanings. I believe that when a politician says "This will affect only the rich" all people above the poverty level should expect an assault on their wallets.