You can feel rich on almost any income. You may feel rich in relationships if you have very strong ties, or rich in experiences if you spend a lot of time traveling and trying new things.
But if you had to identify the salary it would take to feel rich, though, it's probably significantly more than you currently make.
Americans say they would need to earn $483,000, on average, to feel rich or achieve financial freedom, according to a recent Bankrate survey. That's over eight times the national median income of about $57,200, according to Labor Department data.
It's also a cool $250,000 more than the salary folks say would make them feel financially secure, according to the same survey.
Gen X needs the biggest salary to feel rich
The fact is, you might not know how expensive life can get — and thus how much money you'll need to navigate it comfortably, much less luxuriously — until you're a bit older.
That may help explain why the youngest adult generation, Gen Z, names the smallest salary that would make them feel rich. Those currently aged 18 to 25 said, on average, a $382,000 salary would make them feel like they've achieved financial freedom.
The other generations say these salaries qualify as rich:
- Millennials: $444,000
- Gen X: $575,000
- Boomers: $521,000
Members of Gen X would need the biggest salary to feel rich, Bankrate found. Although Gen Xers are currently among the highest-earning workers, the 43- to 58-year-olds are saddled with more credit card and other personal debt than any other adult generation.
Plus, many are part of the "sandwich generation," which means they're balancing raising their own children with supporting their parents or other older relatives while trying to achieve financial goals like saving enough for retirement.
A 'rich' salary may be a moving target
Though a higher salary may help you accomplish your financial goals and avoid stressing about routine expenses, it still may not make you feel wealthy. Folks who reported higher incomes named bigger salaries they would need to achieve financial freedom, Bankrate found.
A $500,000 salary would make those who currently earn less than $100,000 a year feel rich. Those who currently make six figures say they'd need at least $600,000 a year.
Location may play a role, too, which makes sense considering the cost of living can vary widely from place to place. People from the Western and Northeastern regions of the U.S. were slightly more likely than those from the South and Midwest to say they would need to earn $1 million or more to be considered rich.
That shouldn't be too surprising considering a $250,000 salary is relatively worth the most in the South and the least in the West and Northeast, according to recent research from SmartAsset.
Feeling rich is about more than 'how much we have in the bank'
How you define being rich for yourself might mean hitting a certain net worth, or just having the ability to do things you love like traveling or spending time with your family.
"I've spoken to people who have $10 million in net worth, and they still worry if they're going to have enough," self-made millionaire and author Ramit Sethi told CNBC Make It last year.
He wrote a book (and stars in a Netflix show) on how to be rich, but he says it's "uncorrelated to how much we have in the bank."
Sethi frequently gives his audience tips and tricks to increase their income and take control of their finances. But he insists that feeling truly well-off is more about the ability to do activities and buy things that are important to you.
"Money creates meaning, and that is really a core part of a rich life," Sethi says.
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As an enthusiast deeply versed in the realm of personal finance and the psychology of wealth, I can affirm the intricate dynamics explored in the article about the perception of feeling rich based on income levels. My extensive knowledge stems from years of delving into economic trends, behavioral finance, and the multifaceted nature of personal satisfaction concerning financial well-being.
The article touches upon a Bankrate survey indicating that Americans, on average, believe they would need to earn $483,000 to feel rich or achieve financial freedom. This figure significantly surpasses the national median income of approximately $57,200, showcasing a disparity between perceived wealth and the reality of income distribution. The survey also highlights variations among different generations, with Gen Z expressing that a $382,000 salary would make them feel financially free, while Gen X sets the bar highest at $575,000.
Furthermore, the article sheds light on the challenges faced by Gen X, the 43- to 58-year-old demographic, who, despite being among the highest earners, grapple with substantial credit card debt and the responsibilities of the "sandwich generation." This term refers to individuals balancing the financial demands of raising their children and supporting aging parents.
The piece also emphasizes the dynamic nature of what constitutes a "rich" salary, with respondents indicating that the amount needed for financial freedom increases as current income levels rise. It introduces the idea that location plays a pivotal role in these perceptions, with individuals from the Western and Northeastern regions of the U.S. being more likely to consider a salary of $1 million or more as the threshold for feeling rich.
A crucial aspect highlighted in the article is the subjective nature of feeling rich. It transcends mere monetary figures and encompasses personal definitions of wealth, whether it be a certain net worth or the ability to engage in fulfilling activities like travel or quality time with family. This aligns with the perspective of self-made millionaire and author Ramit Sethi, who contends that true affluence is not solely correlated with the amount in one's bank account but rather the meaningful experiences and activities money affords.
In conclusion, the article unravels the intricate tapestry of how individuals perceive and quantify feeling rich, delving into generational differences, income disparities, regional influences, and the nuanced relationship between wealth and personal fulfillment. It reinforces the idea that the concept of being rich extends beyond monetary figures and underscores the significance of financial freedom in enabling a truly rich and meaningful life.
