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The Definition of Wealth: What It Really Means To Be Wealthy

https://www.listenmoneymatters.com/wealthy-definition-of-wealth/

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The Definition of Wealth: What It Really Means To Be Wealthy
The definition of wealth is personal. It means something different to everyone. What it means to be wealthy is entirely up to you and you can get there.

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Wealth Is A Relative Term

Wealth Is A Relative Term

The definition of wealth is personal. It may mean something different to everyone.

To some people, wealth is always going to mean money. But it's not that straightforward. 41% of people feel "wealthy" if they have meals out or food delivered. Services such as Netflix, Spotify, or Amazon Prime made life feel richer for 33%.

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How Much You Need to Become Wealthy In Dollars

According to a Modern Wealth Index Survey, the amount needed to be comfortable in America is $1.4 million. To be wealthy, you'll need a net worth of $2.4 million.

An average pre-tax yearly salary of $389,436 is needed to be in the top 1%, although it varies by state.

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Buying Time

We all, rich or poor, have the same 24 hours in a day. But we can use our money to buy more time. For example, by eating out, you don't have to decide what to cook, shop for ingredients, cook, and clean it all up.

If you can carve out more time for yourself, you can use it in other ways that will improve your life. You can start a side hustle, exercise, read, or spend time with family and friends.

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Jobs And College Education

By 2020, 65% of all jobs will require postsecondary education and training beyond a high school diploma. But with the cost of college education, this is out of reach of many people.

A college degree has increasingly become something only available to the wealthy. The rest have to take out a student loan which makes it harder to amass wealth.

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Wealth In Terms Of Prestige

Some people view wealth in terms of prestige and not dollars. They would rather have a job that requires years of education than learning a trade, even though they may earn less with their Master's or Doctorate degree.

But less than half of those who start college finish - they don't have a degree, only a student loan debt. They may have been better suited to a trade. As 70% of construction companies have trouble filling jobs and robots take over more white-collar jobs, it might be wise to attend trade school rather than college.

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Wealth In Terms Of Owning Things

Housing should be no more than 30% of your income. Warren Buffett's house is worth .001% of his total wealth.

The possession of things differentiates the rich from the wealthy. Wealthy people don't flaunt their money; they save and invest it.

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Wealth Inequality

If you just want to have a comfortable life, it is increasingly out of reach. If you earn the minimum wage of $7.25 an hour, you can't afford a two-bedroom apartment anywhere in the US. In 1963, wealthy families had $6 for every $1 of families in the middle. By 2016, it was $12 to $1.

It is very easy not to "look poor." If you have access to credit, you may be poor because you're in debt, but you can buy the same things rich people have, iPhones or vacations. When people can hide being poor from themselves, they don't demand change.

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What Money Can Buy

Money can actually buy happiness. It takes less than you think and it depends on what you buy.

It takes between just $60,000 -$75,000 for emotional well being and happiness. Earning more than that can make you unhappy, because you have more demands on you, more hours spent at work, and less time doing things you enjoy. Buying experiences also make you happier than buying things.

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You Don’t Need Money To Be Happy

Living and enjoying life is not dependent on money. Some of the happiest states in America are also some of the poorest.

For example, Lafayette, at the heart of Acadiana, which is better known as Cajun country, is said to have delicious food and drink, which makes things like fairs and festivals more fun.

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SIMILAR ARTICLES & IDEAS:

Frugality

Frugality means resisting the temptation to spend more than you earn.

Discipline

Self-made millionaires choose moderation over extremes. They often buy used cars, don't live in the most expensive houses and don't try to time the investment market.

Hard Work

A defining characteristic of many millionaires are their willingness to work hard and stick it out in high-paying careers until they are financially independent.

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The Definition of Rich

The Definition of Rich

A high income and a regular acquisition of expensive stuff do not necessarily make people rich. People may have a high income, but many won’t survive three months if they are suddenly without their...

Wealthy People and Pseudo Affluence

Wealthy people have sustainable access to money, often for a very long period of time. Their habits are now aligned with the wealth that they have incurred.

Pseudo affluence, on the other hand, is what people experience when they are currently earning lots of money and start to believe that they are rich. They pay for their expensive lifestyle with a high amount of borrowed money and are just a job-loss away from being poor again.

Object Poor

... is a ‘state of excess’ when the stuff we own makes us poor, as the debt we incur has trapped us to keep working our jobs to fund the expensive lifestyle and habits.

How you can invest in yourself

How you can invest in yourself

The foundation for every personal pursuit in life is to invest in yourself. It can take years. How you can do it:

  • Learn to build something. If you can create something valuable w...

Income generation

Once you have ideas, you want to put your ideas to work. If you do that, you can start creating value. When we create value, we generate income.

During the pandemic for example, most restaurant owners had to focus on other ideas to generate income. Building wealth is not easy. We need a constant supply of ideas.

Asset investing

It is anything that will increase your wealth without personal labor.

  • Businesses. This is a broad asset class. You can buy dividend-stocks on the market, and then the companies will pay you a share of the profit. You can start your own business. You can buy into other private businesses.
  • Bonds. When you invest in bonds, you collect interest just like your bank is collecting on a mortgage.
  • Books. A good book will generate cash for a long time.

Assets that don't generate cash, but might increase in value.

  • Land. A piece of land generates cash when you rent or lease it.
  • Collectibles such as art or watches.