How to know if you're rich

[matchewed]

So for me, rich is having sufficient wealth that you can freely share it with others and gain the benefits of great happiness through giving.  Having enough wealth that you have both the free time and capital to give freely makes you rich....

See?  PizzaSteve agrees with me.   Being rich = having cling-ons....


:-)

Did someone say Klingons?

[BTDretire]

.

I buy a used car instead of a new one while all my friends drive audis or bms, that doesn't suddenly make me think I'm not rich. Not sure why so many people have the opposite attitude.

I have a hard time understanding this too. People on this forum (especially those nearing or at FI!) have a lifestyle and future ahead of them that has been overwhelmingly isolated into the richest of the rich over the course of human history.

I really am surprised how so few people feel rich. Maybe I just feel more lucky or blessed to be in the position I am in.

   We are doing well, got a 3.1 here, http://www.hughcalc.org/wealth.cgi
But I don't feel rich, we have spent many years accumulating, and can live off the interest. But. we can't, really it's a won't go out and spend like we are living paycheck to paycheck on $90,000. We have a stache, but it is not something we will spend, because we need the little soldiers working for us. We won't spend the stache to live a high life, we will spend the earnings of the stache to live a comfortable life.
And yes, I am blessed to be in the position I am in.
 Just trying to show why others don't feel rich even with a big stache.

[matchewed]

I guess you highlight something I'm struggling to understand. What makes you think you'd feel rich at 100k? 200k? 1mil? Stepping away from our narrow view of our current circumstances can you truly say that you will feel rich with $X income when the current massive crapton of excess we all have right now doesn't?

[Metric Mouse]

I guess you highlight something I'm struggling to understand. What makes you think you'd feel rich at 100k? 200k? 1mil? Stepping away from our narrow view of our current circumstances can you truly say that you will feel rich with $X income when the current massive crapton of excess we all have right now doesn't?

Right?

[Fomerly known as something]

It's also very locally dependent.  I lived near a small city in the South for 5 years.  One of my co-workers HS age kids was informed we lived in the rich part of town.  Houses went for $200,000-$400,000 based on the neighborhood.  And yes other than people living on estate like properties we were the rich part of town.

[human]

Can't believe I'm posting in this thread again. It has to be more than neighbourhood. I don't care if you make 100k a year and choose to live in a crack house. Living in the crack house does not make you poor. Look at the median incomes for the country, if you are in the top 15% (shit I would really say top 35%) you are rich. What you choose to do with the money is up to you. Piss it away? Still rich. Buy your kids ponies, and don't have any assets? Still rich.

You don't get a pass for living in expensive ass NYC, you can easily live off of Manhattan in an affordable rental. There are also places in the bay area that you can rent for less than 2 dollars a square foot, so talking about housing is always BS. A nice house with bedrooms for all the kiddies and more than one bathroom is lifestyle creep plain and simple. Choosing to spend all your dough on those luxuries doe not make you middle class or poor, you are still rich as you make more than 200 million other fucking people in the US.

[SeaEhm]

you are still rich as you make more than 200 million other fucking people in the US.

please tell me your tiers of "wealth/richness"

Is there only poor and rich in your eyes? If so, then maybe having more than 200 million people in the US is rich. 

However, I like to define things with more than two categories.

[human]

What making more than 2/3rds the population in one of the richest countries in the world ain't rich enough for you? gimme a break.

It's really strange how people don't like the rich label. I was making 70k a year living in a bachelor apartment with nothing but a desk and a bed and I felt grotesquely rich. Get over yourselves, you make good money and yes other people would probably envy you if they knew exactly how much you made. We surround ourselves with others like ourselves making the same kind of money so it's easy to lose perspective. Embrace your good fortune!

"Oh it's such a struggle living with a middle class family income close to 150-200k a year, how we struggle! Those taxes just keep us down!"

I keep seeing that accumulation equation, that has nothing to do with making actual money. It's like saying I make a million bucks a year but don't save a dime so I'm poor. That makes no sense . . . in my case since I started saving 2 years ago I think I'm at .81 on that scale. That just means I blew all my money on booze and travel not that I wasn't rich. I couldn't have drunk my face off every night and fly to NYC once a month if I was poor.

[Fomerly known as something]

What making more than 2/3rds the population in one of the richest countries in the world ain't rich enough for you? gimme a break.

It's really strange how people don't like the rich label. I was making 70k a year living in a bachelor apartment with nothing but a desk and a bed and I felt grotesquely rich. Get over yourselves, you make good money and yes other people would probably envy you if they knew exactly how much you made. We surround ourselves with others like ourselves making the same kind of money so it's easy to lose perspective. Embrace your good fortune!

"Oh it's such a struggle living with a middle class family income close to 150-200k a year, how we struggle! Those taxes just keep us down!"

I keep seeing that accumulation equation, that has nothing to do with making actual money. It's like saying I make a million bucks a year but don't save a dime so I'm poor. That makes no sense . . . in my case since I started saving 2 years ago I think I'm at .81 on that scale. That just means I blew all my money on booze and travel not that I wasn't rich. I couldn't have drunk my face off every night and fly to NYC once a month if I was poor.

I kind of agree with you.  As much as I often don't feel rich, I'm in the top 10% for income and NW in the US.  Feelings aside I realized about 10 years ago that I was knocking on the door of being kind of rich.  I also realized I needed to work on investing and passive income to become really rich at that time.  I still am only kind of rich in my mind but will be really rich at some point if I continue on the path I'm currently following.  (Although I might pull the trigger at FI earlier and never become "really rich")

[human]

In terms of income I'm in the top ten percent for individuals in Canada. Even with just 65k in investments/cash I feel damn loaded. In ten years with invesments and pension I'll be rolling in it like a pig n shit.

[Undecided]

What making more than 2/3rds the population in one of the richest countries in the world ain't rich enough for you? gimme a break.

It's really strange how people don't like the rich label. I was making 70k a year living in a bachelor apartment with nothing but a desk and a bed and I felt grotesquely rich. Get over yourselves, you make good money and yes other people would probably envy you if they knew exactly how much you made. We surround ourselves with others like ourselves making the same kind of money so it's easy to lose perspective. Embrace your good fortune!

"Oh it's such a struggle living with a middle class family income close to 150-200k a year, how we struggle! Those taxes just keep us down!"

I keep seeing that accumulation equation, that has nothing to do with making actual money. It's like saying I make a million bucks a year but don't save a dime so I'm poor. That makes no sense . . . in my case since I started saving 2 years ago I think I'm at .81 on that scale. That just means I blew all my money on booze and travel not that I wasn't rich. I couldn't have drunk my face off every night and fly to NYC once a month if I was poor.

I kind of agree with you.  As much as I often don't feel rich, I'm in the top 10% for income and NW in the US.  Feelings aside I realized about 10 years ago that I was knocking on the door of being kind of rich.  I also realized I needed to work on investing and passive income to become really rich at that time.  I still am only kind of rich in my mind but will be really rich at some point if I continue on the path I'm currently following.  (Although I might pull the trigger at FI earlier and never become "really rich")

But "blame the rich" political tactics won't really work if the majority has to admit that it is rich. Like salaried professionals in the bottom of the top tax bracket today, the median American won't recognize himself or herself in the description of the rich who don't "pay their fair share," or whatever.

[human]

Ah of course is that it? All these folks really think they aren't part of the problem? I get it, the "wealth" is super concentrated to the point us bourgeois bohemians simply have a piece of the crust. Even so we are still rich.

[Metric Mouse]

What making more than 2/3rds the population in one of the richest countries in the world ain't rich enough for you? gimme a break.

It's really strange how people don't like the rich label. I was making 70k a year living in a bachelor apartment with nothing but a desk and a bed and I felt grotesquely rich. Get over yourselves, you make good money and yes other people would probably envy you if they knew exactly how much you made. We surround ourselves with others like ourselves making the same kind of money so it's easy to lose perspective. Embrace your good fortune!

"Oh it's such a struggle living with a middle class family income close to 150-200k a year, how we struggle! Those taxes just keep us down!"

I keep seeing that accumulation equation, that has nothing to do with making actual money. It's like saying I make a million bucks a year but don't save a dime so I'm poor. That makes no sense . . . in my case since I started saving 2 years ago I think I'm at .81 on that scale. That just means I blew all my money on booze and travel not that I wasn't rich. I couldn't have drunk my face off every night and fly to NYC once a month if I was poor.

I kind of agree with you.  As much as I often don't feel rich, I'm in the top 10% for income and NW in the US.  Feelings aside I realized about 10 years ago that I was knocking on the door of being kind of rich.  I also realized I needed to work on investing and passive income to become really rich at that time.  I still am only kind of rich in my mind but will be really rich at some point if I continue on the path I'm currently following.  (Although I might pull the trigger at FI earlier and never become "really rich")

But "blame the rich" political tactics won't really work if the majority has to admit that it is rich. Like salaried professionals in the bottom of the top tax bracket today, the median American won't recognize himself or herself in the description of the rich who don't "pay their fair share," or whatever.

That's the issue. "Take from anyone who has more than me."  Except at some point, there are very few people with it all.

[human]

When you are a "have" taxation is the poor lazy folks taking your money. When you are a "have not" the haves got their wealth by exploiting you. Unless you are a John Galt wannabe, the welfare state has done pretty good creating a 40 hour work week and better (not perfect or even yet quite ideal) living wages and somewhat safer working environments.

[deborah]

When you are a "have" taxation is the poor lazy folks taking your money. When you are a "have not" the haves got their wealth by exploiting you. Unless you are a John Galt wannabe, the welfare state has done pretty good creating a 40 hour work week and better (not perfect or even yet quite ideal) living wages and somewhat safer working environments.

Not to include the roads, police force, garbage, water and sewerage... that taxes (of various sorts) provide, and that most people complaining about taxes forget about.

[SeaEhm]

What making more than 2/3rds the population in one of the richest countries in the world ain't rich enough for you? gimme a break.

It's really strange how people don't like the rich label. I was making 70k a year living in a bachelor apartment with nothing but a desk and a bed and I felt grotesquely rich. Get over yourselves, you make good money and yes other people would probably envy you if they knew exactly how much you made. We surround ourselves with others like ourselves making the same kind of money so it's easy to lose perspective. Embrace your good fortune!

"Oh it's such a struggle living with a middle class family income close to 150-200k a year, how we struggle! Those taxes just keep us down!"

I keep seeing that accumulation equation, that has nothing to do with making actual money. It's like saying I make a million bucks a year but don't save a dime so I'm poor. That makes no sense . . . in my case since I started saving 2 years ago I think I'm at .81 on that scale. That just means I blew all my money on booze and travel not that I wasn't rich. I couldn't have drunk my face off every night and fly to NYC once a month if I was poor.

Again you talk about either being rich or poor. 

Get over myself? You are the one proclaiming that you are rich.

Funny that your comments seem like your philosophical belief is to never readjust goals and expectations. Example is that you keep comparing yourself to people who are not at your level and will probably never be at your level because of where they live. 

You mentioned someone making a million dollars a year but having nothing in the bank.  I would say that they are rich even if their bank statements show 0. If they are leveraged to the max and making $1mm a year, they are still rich until the walls come crumbling down (if they ever do)

Hopefully you aren't a college professor or your students would probably only have two grades.  A or F.

[human]

You seem to want to avoid the label at all costs. Not sure why, is it a slimy creepy feeling you get when you know most people would label you as such? I don;t understand this need to avoid realizing your good fortune relative to others. You can dance around it and call it a grey zone all you like but how you see yourself is entirely different that what I suspect 2/3rds or 3/4s of what your peer think.

I addressed location upthread, it's a red herring to hide your success from others, again I'm not sure why. Own it already and stop seeing yourself as some everyman/womyn middle of the road class.

If you were a college prof each student would get a different grade something like 86.73% for one and 87.42% because every score would be relative to another.

[SeaEhm]

You seem to want to avoid the label at all costs. Not sure why, is it a slimy creepy feeling you get when you know most people would label you as such? I don;t understand this need to avoid realizing your good fortune relative to others. You can dance around it and call it a grey zone all you like but how you see yourself is entirely different that what I suspect 2/3rds or 3/4s of what your peer think.

I addressed location upthread, it's a red herring to hide your success from others, again I'm not sure why. Own it already and stop seeing yourself as some everyman/womyn middle of the road class.

If you were a college prof each student would get a different grade something like 86.73% for one and 87.42% because every score would be relative to another.

Again - I said that there should be multiple labels.


If I were a college professor, there would a be a rubric where people would know where they fall and it would not be pass and fail.

Every score is relative to the person standing next to them.  This is true for life.  My friends make WAY more money than I do. I wouldn't trade my life with them. 

From my perspective, I would only trade my life with .00000001 of the world's population because I am grateful for what I have been able to achieve and what genetic lottery ticket I received.

I still don't think I am rich.

[human]

Sure there's more to life than money but let's be real these threads aren't about the "richness" of my spiritual life or relationships they are about means.

[BTDretire]

I think TV rich is setting many of us up with a skewed sense of rich. We see those that own jets to travel, we see those with four or five houses in different countries, we see someone traveling with $10M dollars in jewelry. We see movie stars getting $10M or $20 million for a movie, or a sports player getting a $70M 5 year contract plus another deal for endorsements.
  We might be rich, but we are not THAT rich!!  :-)

[Much Fishing to Do]

Someone who makes more than 5x what I spend is rich, someone who makes less than half what I spend is poor. 

Anyone that is financially independent and still has their health is wealthy.

[PseudoStache]

You seem to want to avoid the label at all costs. Not sure why, is it a slimy creepy feeling you get when you know most people would label you as such? I don;t understand this need to avoid realizing your good fortune relative to others. You can dance around it and call it a grey zone all you like but how you see yourself is entirely different that what I suspect 2/3rds or 3/4s of what your peer think.

What makes you think that anyone here cares about being labeled as rich?

The problem is that YOU define rich-ness in comparison to others, while many here don't.

If I hit my number I would have no qualms about proclaiming myself as such

I have no problems saying that I am better off, more fortunate, wealthier than, etc. than 99% of the world.

But if i dont have the ability to never work again nor afford luxury goods on a whim, then I do not consider myself rich.  This has absolutely nothing to do with how I compare to anyone in any country.

And again just to be clear, I dont NEED to be rich, nor will I put my family/health in any peril to achieve this number, but if I do get there and you ask me if I am rich, I will acknowledge that I am.

[Letj]

One important observation is that there may not be any amount of money at which you feel rich. You can have top one percent net worth and top one percent income and still not feel rich. Donald J Trump regularly claims to feel like a blue collar worker, and for all we know this could be the truth (that he feels this way).

No doubt there are psychological factors at play including the natural human tendency to dissatisfaction and envy. Compared to the 1% most of us would seem poor but is that really the case? I definitely do not feel rich even with a networth in excess of 3 million. Can I fly first class, afford part-time maid much less full-time, afford a boat, pay my children's college and professional school without some sacrifice? Hell no. However, can I retire and live comfortably especially with a nicely cash flowing rental business? Yes,

[human]

One important observation is that there may not be any amount of money at which you feel rich. You can have top one percent net worth and top one percent income and still not feel rich. Donald J Trump regularly claims to feel like a blue collar worker, and for all we know this could be the truth (that he feels this way).

No doubt there are psychological factors at play including the natural human tendency to dissatisfaction and envy. Compared to the 1% most of us would seem poor but is that really the case? I definitely do not feel rich even with a networth in excess of 3 million. Can I fly first class, afford part-time maid much less full-time, afford a boat, pay my children's college and professional school without some sacrifice? Hell no. However, can I retire and live comfortably especially with a nicely cash flowing rental business? Yes,

That is being rich . . .

[golfreak12]

What making more than 2/3rds the population in one of the richest countries in the world ain't rich enough for you? gimme a break.

It's really strange how people don't like the rich label. I was making 70k a year living in a bachelor apartment with nothing but a desk and a bed and I felt grotesquely rich. Get over yourselves, you make good money and yes other people would probably envy you if they knew exactly how much you made. We surround ourselves with others like ourselves making the same kind of money so it's easy to lose perspective. Embrace your good fortune!

"Oh it's such a struggle living with a middle class family income close to 150-200k a year, how we struggle! Those taxes just keep us down!"

I keep seeing that accumulation equation, that has nothing to do with making actual money. It's like saying I make a million bucks a year but don't save a dime so I'm poor. That makes no sense . . . in my case since I started saving 2 years ago I think I'm at .81 on that scale. That just means I blew all my money on booze and travel not that I wasn't rich. I couldn't have drunk my face off every night and fly to NYC once a month if I was poor.

You made a good point.
I made over $100K the past 3 years so I should feel rich but I feel well-off.

[undercover]

Three pages in on a word that can only be interpreted subjectively?

Rich is relative. You have more things than some people, therefore you're "richer", or at least closer to being "rich" than they are. Conversely, you have fewer things than other people, therefore you're "poorer" than them. There will always be people richer and always be people poorer (financially speaking, of course) than you.

It's really a silly thing to ponder over or worry about. You're personally rich then moment in which you declare it so, based on whatever subjective criteria you come up with. But, again, it's not something that I think is worth "defining".

[MrsDinero]

I think TV rich is setting many of us up with a skewed sense of rich. We see those that own jets to travel, we see those with four or five houses in different countries, we see someone traveling with $10M dollars in jewelry. We see movie stars getting $10M or $20 million for a movie, or a sports player getting a $70M 5 year contract plus another deal for endorsements.
  We might be rich, but we are not THAT rich!!  :-)

I don't consider those people "rich".  The better term to describe those is "wealthy". 

To me the term wealthy is people that don't have to worry about more for several generations.  Rich people are people that have lots of money. 

[Johnny Aloha]

You're rich if you're pondering these things :P

Bingo. 

We are screwing around on a message board (all of us) in a developed country (most of us).  We are not refugees.  We are not settlers in a new land.  We have enough food on the table, and if we are running short, a quick trip to the grocery store can provide food from any corner of the planet.

Your neighbor might not consider you rich, but approximately 6 billion people on the planet would consider you rich!

[BTDretire]

I think TV rich is setting many of us up with a skewed sense of rich. We see those that own jets to travel, we see those with four or five houses in different countries, we see someone traveling with $10M dollars in jewelry. We see movie stars getting $10M or $20 million for a movie, or a sports player getting a $70M 5 year contract plus another deal for endorsements.
  We might be rich, but we are not THAT rich!!  :-)

I don't consider those people "rich".  The better term to describe those is "wealthy".

To me the term wealthy is people that don't have to worry about more for several generations.  Rich people are people that have lots of money. 

I think that needs another thread. "What is considered weathy?"  :-)
With the term wealthy, we at least get away from the double meaning of rich, money, and the things that make life meaningful and happy.
  If we limit 'rich'  to having "excess" money to spend and, we just concern ourselves with living in a first world country, then I would say that having a stache that generates $40,000 a year, would NOT make you rich. Assumes you will not touch the principal and also that not needing to work for a living doesn't automatically define you as rich.
 And yet another thread, "What is 'excess' money"?
Even the definition is subject to large variation!
"an amount of something that is more than necessary, permitted, or desirable."

Defining words is not easy,
"It depends on what the meaning of the word 'is" is.

Edit, to fix my quote mess.

[Metric Mouse]

One important observation is that there may not be any amount of money at which you feel rich. You can have top one percent net worth and top one percent income and still not feel rich. Donald J Trump regularly claims to feel like a blue collar worker, and for all we know this could be the truth (that he feels this way).

No doubt there are psychological factors at play including the natural human tendency to dissatisfaction and envy. Compared to the 1% most of us would seem poor but is that really the case? I definitely do not feel rich even with a networth in excess of 3 million. Can I fly first class, afford part-time maid much less full-time, afford a boat, pay my children's college and professional school without some sacrifice? Hell no. However, can I retire and live comfortably especially with a nicely cash flowing rental business? Yes,

I thought it was interesting in the TED talks where they show graphs of income/wealth.  Looking at it from the perspective of wealthy, it was hard to see the difference in income levels of 'poor' people. They tended to all look the same - but when viewed from perspective of lower income levels, there were huge jumps even at lower levels, and the rich end of the scale wasn't even conceivable.

[zephyr911]

I don't know if this was mentioned earlier in this thread, but I appreciated the approximation that is used at the beginning of The Millionaire Next Door that defines a Prodigious Accumulator of Wealth (PAW) vs. an Under Accumulator of Wealth (UAW). The PAW generally has more than 2x the projected value using the equation below.  The UAW generally has less than projected - I can't remember if the book said half the projected or not.

Projected NW = Age * Realized Pre-tax Income * 10%

Realized pre-tax income for what period?
Current pretax income, average pretax income, or lifetime?

[larmando]

I don't consider those people "rich".  The better term to describe those is "wealthy". 

To me the term wealthy is people that don't have to worry about more for several generations.  Rich people are people that have lots of money.

Are they though? Some of them will actually go bankrupt quite fast for living an extravagant lifestyle. So perhaps they were not *so* wealthy.

[travelawyer]

__ # of designer clothing items or purses you own

Haha - designer purses - any girl into designer purses could have 0 on every item on that list with 10 next to designer purses. 
 

Well she must be rich! I can't spend in the neighborhood of 100k on purses ($10k x10), even on credit.

Sent from my SM-G900V using Tapatalk

I have 5 pairs of designer jeans from Nordstrom Rack, and that makes me the same rich as someone with 6 cars or a yacht? :)

[fredbear]

Here is a perspective from an old friend, who winged through a varied life that took him from fabulous wealth (own >100 sections of productive land) to bankruptcy, with plenty of intermediate stops going up, down, up, down the economic ladder.  $5,000,000.  You need $4,000,000, because if you got  your eye on the ball you ought to be able to invest in real estate deals that produce 10% cash on cash, which is $400,000, and anybody ought to be able to live on $400,000 per year.  The extra million is to cover the lawsuits when people discover you have the $4,000,000 and decide they want some of it.

[pbkmaine]

My mother always said that if you have a roof over your head and bread on the table, you are rich beyond the dreams of much of the world. So I've always felt rich.

[PAstash]

Do you feel rich? Do you worry about money or do you know you're going to have what you need, and a few things you want?
I'm starting to feel rich at a NW of $300K+, though I still have to work for a little while before really slacking off... maybe half a mil will get me there, maybe more like 750K, but it's pretty nice right here already.

so higher % is good?

[PAstash]

Is there a difference between being financially independent and being rich?  Or are they the same thing?

Is there a Mustachian formula for determining if one is rich?

I know what it takes to NOT have to work for money.

I also know that a certain income in San Francisco, Boston or New York is not the same as in Wichita or Alabama.   I'm asking for formulas, not actual numbers.   For example, savings equivalent to 10 times one's annual salary + no debt.

I'm talking about "Fkuc Oyu" money.   I think I may have the F the U and the C, but I'm on my way to all seven letters.

The other day, my daughter asked me  if we were rich and I said that we have a decent life and that that life depended on hard work and sacrifices and not spending money "like crazy", but no, we were not rich.  Of course, if we were rich I'd have lied and said no until she was old enough to understand how money works and understand that having some dough doesn't make you special or entitles you to anything.

age x pretax annual income from all sources divided by 10. That is what your NW SHOULD be at your age.

[Taran Wanderer]

 http://www.globalrichlist.com/wealth

According to this, I am about the 21 millionth richest person on Earth out of 7 billion, and 2,311,000th highest earner.  I guess that makes me rich.

[SeaEhm]

age x pretax annual income from all sources divided by 10. That is what your NW SHOULD be at your age.

Look at the net worth expected for a 30 year old versus one for a 60 year old with the same income.  The 30 year old is just getting started while the 60 year old is getting finished. 

[Metric Mouse]

 http://www.globalrichlist.com/wealth

According to this, I am about the 21 millionth richest person on Earth out of 7 billion, and 2,311,000th highest earner.  I guess that makes me rich.

Fantastically, unbelievably wealthy!  Your level of wealth is unimaginable to much of the population of the world. Congrats! Enjoy it.

[Ann]

I don't like the Millionaire Next Door Formula -- it's too biased against people who started later in life because of advanced education.  Basically, it doesn't work for any new entry into the work force -- how are you expected to have saved more than you annual income the first year you start working?

[Taran Wanderer]

I don't like the Millionaire Next Door Formula -- it's too biased against people who started later in life because of advanced education.  Basically, it doesn't work for any new entry into the work force -- how are you expected to have saved more than you annual income the first year you start working?

Yes, it takes a few years to get ahead of the curve, but being behind the curve is good motivation to get ahead of it. Another frustrating thing is to almost reach the curve and then have your income jump up due to a promotion so the curve steps up and then you're still behind the curve for a couple more years. Of course, that might qualify as a mustachian people problem...

[Metric Mouse]

I don't like the Millionaire Next Door Formula -- it's too biased against people who started later in life because of advanced education.  Basically, it doesn't work for any new entry into the work force -- how are you expected to have saved more than you annual income the first year you start working?

Yes, it takes a few years to get ahead of the curve, but being behind the curve is good motivation to get ahead of it. Another frustrating thing is to almost reach the curve and then have your income jump up due to a promotion so the curve steps up and then you're still behind the curve for a couple more years. Of course, that might qualify as a mustachian people problem...

No, I think that clearly is a fault in the formula. If one's income jumps dramatically it should put them closer to wealthy, not further away (in almost every case, anyway) . Its the same issue with judging retirement needs based on pre-re income- if one gets a large raise, are they really further from FIRE?

[Dicey]

Hey, I know this is slightly off topic, but I figure someone on this thread is likely to remember an MMM post that I am currently trying to find. It is called something like "The Man Who Didnt Know He Was Rich".

A dear friend's husband is struggling with OMY and she's ready for him to retire already. He earns more in a year than this blog reportedly pulls in, so I can understand his hesitation, but they also have a BIG Ball o' Money saved. If anyone can scrounge up the link, I'd love to pass it on. Thanks!

[BTDretire]

I don't like the Millionaire Next Door Formula -- it's too biased against people who started later in life because of advanced education. 

age x pretax annual income from all sources divided by 10. That is what your NW SHOULD be at your age.

 I don't know that the formula above is the Millionaire Next Door Formula, by context I think it is.
But it  doesn't work very well for Mustachians.
A 60 year old make $100,000 = 6,000,000 / 10 = $600,000, that's way behind for a Mustachian.

[Taran Wanderer]

Good point. It would be interesting to rework the formula based on expenses rather than income.

[arebelspy]

I know the following statement will piss some people off, and I'm not going to argue it, but if you disagree, I'd encourage you to:
1) Take it as just a different mindset than yours, and
2) Think about it.  Maybe you'll agree, or maybe you'll continue to disagree, that's fine, but don't let your knee-jerk reaction define it/you.

With that giant caveat, here's the statement:

Spoiler: show

I have never seen someone post on this forum I wouldn't consider rich.  And if you look at my post count, you'll know I've read--and responded to--a LOT of posts.

Okay, that's said and done.  Like I said, I'm sure many reading will disagree. If you're upset about it, or want to argue, please don't even bother replying.  I don't want to argue it, I just want to put it out there for some people to think about.  :)

Now, for a more satisfying answer, perhaps, for those of you looking for math and numbers:

I don't like the Millionaire Next Door Formula -- it's too biased against people who started later in life because of advanced education. 

It also just doesn't work for anyone young (run a scenario for a 22 year old with student loans making 50k out of college), anyone old (run a scenario for a 65 year old making 50k), anyone with a recent pay bump, etc. etc.

It has tons of problems.  I've posted a much better formula before, here:
http://forum.mrmoneymustache.com/welcome-to-the-forum/what-are-the-mustachian-milestones-for-saving/

:)

[arebelspy]

Hey, I know this is slightly off topic, but I figure someone on this thread is likely to remember an MMM post that I am currently trying to find. It is called something like "The Man Who Didnt Know He Was Rich".

A dear friend's husband is struggling with OMY and she's ready for him to retire already. He earns more in a year than this blog reportedly pulls in, so I can understand his hesitation, but they also have a BIG Ball o' Money saved. If anyone can scrounge up the link, I'd love to pass it on. Thanks!

Here you go: http://www.mrmoneymustache.com/2011/05/16/mmm-reader-case-study-the-man-who-didnt-realize-he-was-already-rich/

:)

[Taran Wanderer]

ARebelSpy - Obi-Wan Kenobi said that many of the truths we cling to depend greatly on our point of view. From the point of view of comparing ourselves to the other 7 billion people alive on this planet today along with all the people who have ever come before us, I would have to agree with you that we are probably all rich, even those of us just getting started on our financial journeys.  Of course we can always find a subset to compare ourselves to and feel not rich. Best to be thankful.

[Metric Mouse]

Of course we can always find a subset to compare ourselves to and feel not rich. Best to be thankful.

If this is true, then it is probably true that we can also find a subset to compare ourselves to and feel rich. Since this is a choice, I choose to compare myself and feel rich. It's nice.