Great article on how the "Rich" do it...

[CuppaJoe]

Originally Posted by tiuxiu

....
They probably wouldn't be going to the opera on Saturday nights and would be very vulnerable to disaster from a big ticket expense, but could be done. Would someone in that income range qualify for free or almost free healthcare depending where lived?

My frugal budget will allow $15.00 tickets to the opera, that $15.00 gets you balcony side on a weeknight, and don't tell anyone, it's heaven; many buffs says its the best location to hear Wagner. Apparently opera ticket sales fell off some time ago and they lowed the prices from $25.00. My extravagant budget will get me student rush tickets for $30.00 any day of the week, that gets you into a decent, wide seat in the orchestra side section, often about six rows from the stage. I will get to the opera house by public transit. The season starts next week.

[Michael Dirubio]

Joe-

We are seeing Simon Boccanegra soon. We get tickets from my dear MIL who is a huge fan. Everyting I know about opera I learned from Bugs Bunny. My MIL might be considered rich. But I do know the secret of how she did it: Studied hard every night in school. Finished with a Master's, worked hard all her life, saved every penny, invested over a lifetime. Viola!! 45 years later she goes to Ashland and Sante Fe to hear the sweet sounds of Verdi and Puccini.

[CuppaJoe]

Originally Posted by Michael Dirubio

Joe-

We are seeing Simon Boccanegra soon....

-
"See" ya there. I'll be in a blue polo, sandals and casual jacket that would also w*rk on the 38 line at midnight. For the first time in 20 years I'll be free to stop for a cappuccino afterward. I learned about opera from the Marx Brothers as well as cartoons, good education. I see this fellow Simon was Doge in Venice, should be good sets; his daughter reappears, is about to marry a murderer, lots of misunderstandings, mistaken IDs, political intrigue, it's Verdi, never mind, and then the plot get complicated.

[Hamlet]

Remember that that is a self-reported number. I would suspect that the real number is higher than that, although the basic premise that most millionaires are self-made is certainly true.

There are a lot of people who feel that they are self-made that have very selective memories. It's kinda like how many people think that they're about even from gambling at the casino.

I'm not a millionaire yet, but I will be eventually, and I'm more or less self-made. However, I got some help paying for college. My mother gave me $5k from my grandfather's estate.

Originally Posted by lets-retire

Only 3% inherit their wealth?!?

[harley]

Originally Posted by CaseInPoint

FWIW, contrary to what the article says, I don't believe that there are too many tax shelters left. Those were pretty much eliminated with the advent of the AMT.

Not at all. There are still tons of tax shelters left, and as long as the rich guys write the laws there will always be. They don't get rid of them until they start getting used by the 'lesser' rich. For example, they are doing away with one of my favorites, the ability to sell a principal residence, get the tax break, move into a vacation home for two years, and sell again. Curse them!

Originally Posted by Finance Dave

Although I don't have access to their financial statements, I'd estimate that on average these are people in their 30s/40s with net worths of $2M or more and annual incomes of $200k or higher. Would you call that rich?

I would definitely call that rich. Not the guys who sign Shaq's check, but definitely rich. Self made or not, if your income is in the top 2 or 3% of the nation, you are rich. Whether you live richer than you are is another question. And I agree, opportunity isn't dead, but some have a lot harder time finding the door than others.

I consider myself rich, although I'm a tad below that $23M mark. And I also consider myself extremely lucky. But I know plenty of people who have worked hard, taken risks, and failed miserably. Especially restauranteers (hardest workers in the world). So I say it takes more than just hard work. Luck comes into play too, and some just don't seem to have it. Of course, they are still alive, so maybe next time.

[unclemick]

Hmmm - 1976 -1993, max 401k, IRA. Last salary 60k. Index 500 and guaranteed insurance contracts varied between 50/50 Ben Graham, 60/40 'da policy portfolio' and a stint at 100% index. Passed 1 mil in 2000. Then down, then up, etc.

Average joe space engineer - one of the toiling minions.

Ho hum compounding , time in the market, yadda, yadda.

Never been asked/interviewed - wouldn't be prudent - too boring.

heh heh heh - oh and lest I forget - Pssst Wellesley! .

[Ed_The_Gypsy]

Originally Posted by haha

A person with only $1mm and little else is barely OK, or perhaps not OK depending on how things go. He or she will certainly not be eating much foie gras.

Ha

Yeah, I know. Please don't rub it in.

[unclemick]

Originally Posted by Ed_The_Gypsy

Yeah, I know. Please don't rub it in.

Foie gras is stinking liver - expensive but liver and caviar is fish eggs no matter how you spread it.

Cheap bastardhood like the above or good scotch is an acquired taste and - I repeat - much cheaper if you do it rite!

heh heh heh - Heck if the rest of the country tumbled to the true inside skinny - the economy would grind to a halt cause we'd all be retired. On second thought - everybody stay working - I'll keep the light on for ya.

[2B]

I probably have more assets than all of my two brothers and two sisters plus spouses combined. I am definitely in a decent spot financially and could probably not change my lifestyle at all if I truly retired. I don't consider myself "rich" but I guess my siblings would probably think I am if they don't already.

A major part of my "wealth" is a relatively frugal lifestyle but not where I find anything lacking due to money. Another big factor is where I live and plan on living in the future. Housing is a major expense and Texas is much cheaper than California. My nominal $240K house in Houston is a mansion by California standards and probably cost many times the price there. If I had to adjust my lifestyle to California prices I'd no longer be "rich."

My kids have all recently gotten out of college. The total cost was under $15,000 per year and about $5,000 of that was tuition and fees.They were living pretty well on $10,000 per year but I bought the car and covered health insurance.

I think I could live pretty well on $10,000 per year if I lived where I could walk to where I needed to go or take cheap public transportation. If I got sick, I would have to die.

[free4now]

My previous research agrees with the OP and CFB... most rich people did indeed get that way by their own efforts rather than inheritance. The formula for getting really rich seems to be EDUCATION + DRIVE + RISKTAKING. People who come from wealthy families do get great education, and due to the ability to fall back on the family, they can take on risky businesses. Something that hasn't been mentioned is that people raised in entrepreneurial families are probably much better at judging risks than all the yahoos who thought they could get rich by applying for some liar loans a few years ago.

But living on $10k? Man, that's a risk I wouldn't want to take. I suspect that those who remember living on $10k were counting on some outside help, whether it was a paid off car, health insurance, or free lodging on a friend's couch.

I think I could live pretty well on $10,000... If I got sick, I would have to die.

Well said. I don't consider a living situation where minor sicknesses lead to death to be good living but that's just old fuddy duddy me.

[tiuxiu]

The formula for getting really rich seems to be EDUCATION + DRIVE + RISKTAKING.

I don't know about the risk part, I guess it depends on where you put the marker for being classified as rich.

A married couple both with professional jobs and no kids who live simply can certainly become rich by most people standards after 30+ years of manning the oars.

Education yeah probably (although not necessarily) and a fair bit of drive, but showing up at 8:00, going home at 5:00 without too much risk it can be done.

[dex]

"Quote:
The formula for getting really rich seems to be EDUCATION + DRIVE + RISKTAKING."

Studies have shown that Postponement of Gratification is a key marker for success.

[v5200]

Originally Posted by Marquette

$2mm gives you a SWR of $80k a year. More than many of us (myself included) live on, but less than the household AGI for many people here as well.

You know, that's probably where I would consider someone rich, when their SWR from their portfolio puts them in the top 1% of households.

This actually sounds like a very pragmatic definition of "rich" to me too... so does it sound right that if 1.5% of US huseholds make 250k+ per year, then the definition of "rich" is roughly 6.2 million (assuming a 4% SWR)?