I don’t see why people bring up some cities are more expensive than others. I think everyone knows that. This is an average of what people perceive as rich.
I think even in expensive NYC and San Fran, having $2.4 million in net worth is a lot. Even if you make $300k a year, if you have to spend half of it just on your mortgage, that’s $150 gone, not counted in your net worth. If food and taxes are expensive, also gone. Owning a house for $1 million only counts as $1 million if you own the house outright. You can only count the equity you actually have in the house.
Still, I do agree expensive cities are different than really cheap ones, but why think about the extremes? Why not consider the larger middle here in the US?
Net wealth isn’t income.
I guess this $2.4 million is like the new million. Having a million isn’t what it used to be obviously. I see it as the new threshold maybe for being rich. Although, I would say I think $3.5 million is more the number I would pick.
I think a lot of people in the US feel having $500k in wealth is rich. Many people don’t own any property, they owe money on a car, and lucky if they have $10k in the bank.
Probably, the average middle class person age 35 owns $150k of their house, assuming a house that is $400k. Is even or upside down in at least one car they own (meaning no wealth associated with that car). Might have $150k in retirement savings if they have been fairly diligent since a young age. Plus, I’m thinking $50k – $100k in savings. That’s my guess. That’s $400k of wealth on the high side. That’s all me guessing by people who I know. I know people with much more and much less. Do those numbers sound reasonable? What if the house is $700k and they own half of it? That just adds another $200k of wealth.