Several years ago I asked a colleague “What do you need to retire?”
His answer: “$5 million and playmates.”
Playmates?
What he meant was having enough leisure-time folks to hang out with during the day.
So, about the “magic number” …
============
According to the 2019 Schwab Wealth Survey, Americans believe it takes an average $2.3 million in personal net worth to be considered “wealthy.”
Millennials pegged the number at $5 million
===============
In a similar vein, the WSJ asked some millionaires the question: “At what magic number did you consider yourself wealthy?”
- 25% of the respondents said it was $1 million to $2 million net worth
- Another 25% said it said it was $2 to $4 million.
- 15% said they needed $5 million to $10 million.
- 4% (probably all New Yorkers) said they needed more than $10 million.
Average that out and it comes to about $2.75 million
* * * * *
Note that both of these studies measured wealth in terms of “net work”: the value of assets less money owed.
That’s the right way to do it.
These days, many folks confuse “stocks & flows”
Rather that calibrating “wealth” by net worth (a balance sheet item) they measure it as income (obviously, an income statement item).
That’s measuring the “flow” … not the “Stock”.
Wrong way to do it.
=============
Follow on Twitter @KenHoma
#HomaFiles
Leave a Reply