Money stuff

[taffimai]

My sister and I just had a long conversation and I was curious to see what LJ had to say. Here's the question:

What level of income makes someone poor? What level makes someone rich?

No need to share your personal income, of course, I'm just curious to see if there's a consensus out there or not.

Comments

[minim_calibre]

I'd probably have to express the former in terms of percentage below median income for an area (though I'd have to think on what percentage that would be), and the latter would be enough to never have to worry about actually getting a paycheck.

[taffimai]

I agree that those are reasonable criteria. I guess I was trying to figure out if there are numbers that correlate fairly universally to those outcomes.

[kita0610]

Probably not, bc it really depends where you live. I make less money here in Co. but we live way better than in Ca.

IMO

[zortified]

Poor = one's income does not pay for everything; every purchase has to be evaluated according to what you will have to go without. This includes but is not limited to, living paycheck to paycheck (i.e., never being able to put money into savings.)

Rich = buy anything you want whenever you want it without having to consider if you can afford it.

I think these definitions allow for certain people being rich even if their income is small, if they want or need to buy little; a person could be rich on $10,000 a year or poor on $50,000 depending on their cost of living.

[taffimai]

I agree that those are reasonable definitions, but I was trying to figure out if there were numbers that translated fairly universally to those definitions. For example, I would say that for 99.99% of people, an annual household income of $500,000/year or more would make them rich, but an annual household income of $20,000 or less would make them poor. But I'm not sure if I'm totally off base there.

I'm also a little curious if there's a similar number that corresponds to "comfortable." But that's a harder question to answer, I would bet.

[zortified]

Except as soon as you put in real numbers, you have to qualify it with the local cost of living. $50,000 for a single person in Noble, OK is rich whereas $50,000 for a family of single-parent-plus-two-kids in San Francisco is poor.

A person could be rich on $20,000 if they had no debt, no kids to raise, free healthcare, so on. I don't think you can actually simplify it to the point you can put numbers on what counts as rich or poor.

[donutsweeper]

I think it depends where you live, how big your family and what you feel you need in order to be "comfortable", not to mention how well you manage money now and how well you have in the past. There isn't a number out there to attain, it's a sense of calm you get at a certain point of income.

[taffimai]

I completely agree that cost of living and family size are hugely important to how people fare at various income levels. I'm less convinced that money management skills should be included, but I understand why someone would make that argument.

However, I was trying to figure out if there were numbers that translated fairly universally to "poor" and to "rich.". For example, I would say that for 99.99% of people, an annual household income of $500,000/year or more would make them rich, but an annual household income of $20,000/year or less would make them poor. But I'm not sure if I'm totally off base there.

I'm also a little curious if there's a similar number that corresponds to "comfortable." But that's a harder question to answer, I would bet.

[kita0610]

$500,000 in San Fran or NYC? With a couple of kids, that ain't rich.

[settiai]

It really is one of those things that depends on where someone lives, I think. For example, in the rural Tennessee county where I grew up, the median income is $30,000 a year. Renting a decent-but-not-great apartment costs you something like $250 a month. In the urban Maryland county (in the DC metro area) where I'm currently living, the median income is $95,000 a year (although most of us make nowhere near that much money). Renting a decent-but-not-great apartment costs you something like $1400 a month.

If was living in Tennessee, yet still making the same as I am now, my annual income would very much make me rich. As it is, living in Maryland it's sometimes a struggle just to make ends meet. Because there are such huge differences in the cost of living depending on just where in the country you're talking about, I really don't think you can easily put numbers on it.

[natlyn]

I think you need to specify household size and location to get actual numbers. I think when most people hear an income level, they immediately place it into a context before concluding "rich" or "poor" or "doing well." For example, I have no context for how far money goes when the household consists of children. My context is usually an individual living alone in the DC area or Raleigh-Durham, NC area. I would say that at $20,000 such a person would find making ends meet and saving money very difficult, i.e., poor and in financial straits; however, put this person in a roommate situation with three others making the same and this person may be able to save a bit, still poor but not desperately poor. I think $100,000 is doing well, $200,000 is well off, and $500,000 is rich--but to me rich also brings a connotation of most of the money comes from investments, trust funds or other money-making-money methods. If someone is working 60-hour weeks for his/her $500,000, I 'm less likely to think s/he is rich.