That’s one question which many people have asked themselves and opinions about that topic differ.

Here is just one opinion:

Consider you are completely satisfied with your current life-style. If you would retire today and you have enough money (passive income) to continue your exact same life-style until you reach 100 years of age then you are wealthy.

Why 100 years?

You want to be on the safe side.

Let’s put some number to the above ‘definition’ of wealth and examine two examples, one were the persons is wealthy and one were the person isn’t wealthy.

Example 1 – Wealthy Person:

• Assume that your current life-style is completely satisfactory to you and you don’t want to change it and that it costs you $100,000 a year. You are 35 years old.

• So, given the guidelines of the above example, you have 65 years until you reach 100 which means that you will be considered wealthy when you have $6,500,000 (65Y * 100K)

• You could retire now and continue to life the same life-style now. If you decide to only put it into a money market or savings account which currently earns you roughly 5% interest you would be able to live of the interest and if you don’t ‘upgrade’ your life-style your capital would actually increase. Even if you chose to ‘upgrade’ as long as you won’t spend more then the monthly interest you would increase your wealth as well

Since you can live of the interest wouldn’t a smaller amount of capital be required to be wealthy and financially independent?

Yes, of course. The definition above is an extreme and was meant without the ‘addition’ of funds (i.e. interest payments, capital gains, asset appreciation).

If you assume an annual return of only 5% you could achieve that status with about $2,000,000 (make that $3,000,000 due to taxes)

Example 2 – Rich Person which is not wealthy

• An individual, who has $100,000,000, is 35 years old and current ‘life-style’ expenses of $6,000,000 per year.
• Once again, excluding the ‘addition’ of funds as described above, that individual would ‘run-out-of money’ in less then 17 years and therefore although rich at the moment not wealthy.
• To consider that individual wealthy the total assets would need to be $390,000,000 (65Y * 6M).

Again, the above examples are very simple and exclude many things such as appreciation of assets, taxes and inflation which therefore could be considered unrealistic and capital requirements as to high in order to achieve ‘wealth’ status

The example used the ‘cash-is-king’ rule but if an individual reaches the definition of wealth as described above any financial problems, given that the life-style expenses used to calculate wealth won’t increase, should be ruled out and that individual can fully classify as a wealthy and financially independent person.

What is your definition of wealth and when would you qualify an individual as wealthy?

To be honest, so long as the mortgage is getting paid off extra, I'm happy.

i agree - the mortgage is the most important thing for me - cheers!

I don't even have a mortgage. I guess I'm the wealthiest person on here. :P

So if you would quit your job today you could maintain your current life-style for the rest of your life?

Good for you...

That would be the way to go if you could be able to do anything you want in life.

Wealth is a concept.

I think you are only wealthy when you can theoretically afford to no longer worry about money, which is different for each person. There are many people these days who easily have assets of £350k, who are not in the least bit wealthy. Similarly, I know people who do not own a house, have no savings, and yet have more disposable income and live a more lavish lifestyle than those with assets and long term investments.

By the same token, some people measure wealth as the stage at which working is no longer an obligation. Others may measure wealth purely on what they can afford to buy on a monthly basis. Others might measure wealth on their total assets, or what they can expect to receive in their later years through pensions etc.

From a strictly financial perspective, Triton I think you're about right. Wealth is an interesting beast though, isn't it? If you earn £35k a year you may own a house, go on holiday, shop weekly at Tescos, order regularly from Amazon, own a nice car and still have a bit left over for a hobby and a social life. If your salary suddenly goes up to £75k a year, however, are you going to carry on living like you were? Chances are you'll take an extra holiday a year, get a better car, expand your DVD collection and get your gym and golf club memberships started. You've changed your lifestyle to accommodate your income, but in the long term do you have less money worries? Probably not.

So wealth is a curious creature. The only people that feel wealthy are those that can cease to be interested in their financial exchanges because they know the money is available. I think the majority of people have money worries, and even though they may recognise their lifestyles are comfortable, would not consider themselves to be above the concerns of their finances.

I would say wealth is a point at which you have own your property and have enough additional assets/ saving to holiday twice a year and live a normal life without working.

I will keep working then!

I would say you can retire early move to a underdeveloped country...then you guys will feel wealthy and be able to live off of 50 pences a day since 'wealth' seems to be the most important thing in life Also jonny 'normal' life for whom may I ask? barely 5% of the world? Sorry to be pessimistic over here...spent the whole day listening to BBC news radio just hear about the sad things in the world

That's why we all must try to save in an instument that allows us to maintain our standard of living as well as pay the bills. Hence we should not speculate with our retirement planning. When planning for retirement we must all consider the following: What is my average rate of return on my investment? What is the Rate of inflation? What is our economic state? Does recession loom? How much charges can i aford to pay as administrative costs? All these things MUST be factored into planning. Hence my reason for telling my clients to not put their eggs in one basket by specutaling over high stock portfolios. But instead they should spread their risks according to how much they want to loose. Invest in non-corelated assests such as Construction, Energy, Oil, Stocks, Manufacturing. A bit of each would help you to cushion your portfoilo when tough times come.

CAMBIR

Wealthy is when your assets (not including wages) outdo your liabilities.

Being wealthy is different for everyone, I would describe myself as wealthy when I can live how I want to, comfortably, regardless of the figures.

i like to work, not because so i have enough to retire

I guess you're wealthy when you get free money to spend on things you want rather than need

You can only define your own interpretation for being Wealthy. I can choose to say i am wealthy when i have enough money at hand and more money in hand.

What a fascinating question and so many greedy answers. Wow. No offense but I personally don't measure "wealth" by the money in your pocket but the experiences you cherish and the people you love. Call me a sap but money really is the root of evil.

Wealth, purely material wealth, is being able to look your boss square in the eyes and say, "F-YOU." It's different for everybody, but I would say it's never having to work again, no debt, mortgage, or any similar obligation.

i agree, it would be nice to be able to say that to your boss

i still relying on the lottery to one day give me the chance to do that