What defines someone as being rich in 2006? For simplicity's sake, lets focus on financials and skip the intangible gifts of health, wisdom, family and the like. I dont skip these things lightly, rather I am speaking from a money, asset and income point of view.
Does income make one rich? If so, who amongst these people are rich:
1. A 30 year old man who brings home $10,000 a month and has $7500 a month in expenses. After all this person is making $120K a year.
2. A 42 year old woman who lives at home with her parents to trim expenses, pays no rent and makes $3200 a month from wages. No rent, good public transportation...good life?
3. What about the twenty something couple with no kids, bringing home $7500 a month in income? No kids, own a home, 1 cat, 1 dog and perfect health.
4. A young professional entertainer, making $350K a year. Has celebrity and access to the finer things in life, at least the things capitalism tells us are finer.
I submit to you that while all of the above situations are favorable in their own light, none of them are rich. I honestly believe people in general, investors or even money smart people lack basic financial intelligence. So many new investors and people working for their money constantly think that making $1,000,000, will change their life. Think of this, average household salaries in Los Angeles is in the 40k's. A person making 40K a month does not even clear 1/2 of a million, yet because they have not hit the magic million dollar mark, they are not considered rich? This person makes what the average person makes in a year in one month. Yet, we get stuck on the concept of 1,000,000 dollars.
I have said it before and I stand by it today. A million dollars is not what it used to be. There are cars that cost more than that. In fact you should not be able to call yourself rich with a 1 million in the bank as 10 million is the new million. But on the flip side we must shift our thinking from wanting to be rich, to that of having our needs taken care of and the ability to exercise our wants. Let go of $1,000,000 and start thinking one of two ways, think like a billionaire or think about being happy; A million dollars is so lukewarm.
Mentality makes one rich.