CNNMoney.com recently posed that question among a random sample of people and financial advisors. Most people based their answer on an overarching objective of having enough money so that they would not have to work. Individuals said that would require anywhere from a couple thousand dollars a month to a billion dollars. Advisors put the range at between two and twelve million in savings.
One very important point came at the end of the piece: “Some people can make a million a year, but be spending a million and a half. They are not rich.”
While “rich” can certainly be defined in non-financial terms (great relationships, health, etc.), I agree that the strictly financial definition of rich is being free from the necessity of paid work. Even though I enjoy what I do and never want to fully retire, the reality is that health issues prevent many older people from earning income. So, it’s wise to work toward the goal of having enough money in savings and investments to provide for our needs in our later years. How much of a nest egg that would require depends on your spending habits, which brings up questions about needs vs. wants. For more on that, read the next article. But before you do, I’d like to know how much money you would need in order to feel rich?