How to define wealth
http://articles.moneycentral.msn.com/RetirementandWills/EscapeTheRatRace/JustHowRichIsRichReally.aspx
How to define wealth
In short, how you -- and I mean you, personally -- determine what constitutes wealth depends on your expectations.
A million bucks, wisely invested, will yield an income of about $40,000 a year, if you follow the financial planning rule of thumb that says you can only draw income equal to 4% of your assets (a must if you're not working and want to be sure your money lasts as long as you do). That's comfortable, but hardly rich.
Carole started out saying she really didn't want to be rich. But when I pressed her to clarify what her desired not-really-rich lifestyle would look like, she ticked off the following:
A two-bedroom home in downtown Manhattan.
A car (and a garage to go with it).
Between $200,000 and $500,000 in savings.
$500,000 in her retirement accounts (which is about 10x what she has now).
A couple of getaways per year.
"So although I just said I don't want to be rich -- that's a couple of million right there," she said, quite surprised.
How to define wealth
In short, how you -- and I mean you, personally -- determine what constitutes wealth depends on your expectations.
A million bucks, wisely invested, will yield an income of about $40,000 a year, if you follow the financial planning rule of thumb that says you can only draw income equal to 4% of your assets (a must if you're not working and want to be sure your money lasts as long as you do). That's comfortable, but hardly rich.
Carole started out saying she really didn't want to be rich. But when I pressed her to clarify what her desired not-really-rich lifestyle would look like, she ticked off the following:
A two-bedroom home in downtown Manhattan.
A car (and a garage to go with it).
Between $200,000 and $500,000 in savings.
$500,000 in her retirement accounts (which is about 10x what she has now).
A couple of getaways per year.
"So although I just said I don't want to be rich -- that's a couple of million right there," she said, quite surprised.
