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What Defines Someone as Wealthy?

It is an interesting question to ponder. What is wealth?  What truly defines someone as wealthy and am I wealthy?

Upper-Class Versus Wealthy

In prior posts this site has explored what it means to be middle class.  In theory this also defines what it is to be upper-class by factor of the boundaries.  That being said as we dive into this discussion we may find upper class and wealthy are two different things.

My Early Perspectives on Wealth

When I was young I defined wealth by the amount of money people had.  Wealth and Upper class were synonyms in my mind.  Then again my world was defined by some fairly tight boundaries.  The wealthy or upper class where I lived were doctors and lawyers.   The handful of doctors and lawyers towered over most of the rest of the community who were laborers and tradesmen.   A doctor was the upper bounds of what was possible outside some abstract article about someone like Warren Buffet.

Having Money is Relative

Contrast this with my wife’s upbringing.  She went to a private school where many “Wealthy” Parents sent their children.  Their definition of financial wealth was a far cry from my handful of doctors and lawyers.    The concepts of private airplanes, horse racing, a house in the tropics, and other things you are unlikely to see your average doctor or lawyer affording come to mind.    So at least with respect to money, having money is relative.  But is wealth really just a number?

Wealth and Large Amounts of Money are Not Synonyms

As I left the sheltered world of high school I was exposed to ever more financially well to do individuals.  These days I know people that have sold businesses with payouts in the multiple 9 figure ranges.    But here is the thing, I learned along the way wealth as defined without the adjective financial is something different entirely.    Many of these same individuals I would not call wealthy.

1 Million Versus 100 Million

Sure, the life and activities of someone with $100 Million are a lot different then someone with $1 Million.  For good reason.  $100 Million affords a lot of mistakes, you can afford to be inefficient with your money.  $1M or even $3M requires conscientious spending per your values.  But  at least by default neither someone with $1M or someone with $100M is wealthy.

Abundance and Wealth

You see there is a second aspect to the definition of wealth.  That is having an abundance.    The thing with abundance is, it’s not just a number.  Abundance is also a mindset.  A belief that something is plentiful and therefore not scarce.    When done right that belief is ingrained in everything a person does.  It changes their culture, their perspective, the way they spend their time, their goals, and their happiness.  That is what wealth really is.  It’s also what makes it most people’s goal in some form or other.

A Readers Comment Case Study

Let’s relate this back to some comments from a while back.  When I wrote my post on the middle-class reader Dan commented that his parents were financially well off.   Yet despite their financial “wealth” they obsessed over every penny they spent.    In that post Dan questioned how my definition of middle-class could see them as such despite them having as much as 10 digits of wealth.

Here is the thing, Dan’s parents had money, but they didn’t have abundance.  Their obsessions with every purchase were keeping them from feeling like they could sit back and enjoy life.  In my view, his parents were simply not wealthy.  They also never will be unless they shake this feeling and behavior.

Saving is Not The Goal, It is a Tool

I see the same with some who pursue FIRE.  There is a tendency to save until the point where saving itself becomes the point of life.    Actions like No spend Challenges devolve into not flushing the toilet to save a few bucks a month.  Saving 50% of your salary gets lamented as too slow.  It becomes a great big keeping up with the Jones moment but in reverse.

You Can’t Practice Extreme Frugality and Be Wealthy

Well here is the thing.  There is nothing wrong with Frugality.  This is especially true if you need to dig yourself out of some giant debt mountain or you are getting a really late start.   Even if not in debt, being relatively efficient with your money is important. But I’ll be honest with you.  Extreme frugality over the long term by definition means you will never be truly wealthy.

If you obsess over every purchase from now to the sun comes home you will never feel that money is abundant.  Your actions and beliefs will hold you back.   You probably won’t even enjoy yourself.  You certainly won’t be wealthy in the context of abundance.

Forever Chasing the Next Larger Paycheck is Also Not Wealthy

I am picking on extreme frugality as an obvious target here.  However, I’ll be honest the same risk applies to the other side of the coin.  One can forever chase the next bigger paycheck.  Done to extremes though one falls into the same trap as the individual with the spending neurosis.  You would end up chasing the money rather than enjoying the abundance.  Again that is not really wealthy. Note: This is not to downplay the positives of ambition, but it is to say there should be limits.

In All Things Moderation

Like everything else in life, Moderation is the key.  Efficiency in money is to be praised.  Obsession in money is something to be avoided lest you be kept from ever being truly wealthy.   That would be a shame as abundance is one of the key lynchpins in finding maximizing happiness.  I think we can all agree happiness is what we all strive.

Are you Wealthy?  Do you agree with my definition?


  1. Joe
    Joe January 30, 2019

    I’m like Dan’s parent. We’re comfortable financially, but we don’t have abundance and probably never will. I’m trying to relax more about spending as I get older, but it’s difficult to change my habit. I think that’s okay, though. Not everyone can be a millionaire and not everyone can be wealthy as you define it. As long as we’re relatively happy and healthy, I’m fine with that. I’m not extremely frugal.

    • FullTimeFinance
      FullTimeFinance January 30, 2019

      Very true. Someone’s goal does not have to include becoming wealthy. We each are on our own path.

  2. Dan
    Dan January 30, 2019

    Essentially you are saying “wealth” is as much a mindset as a dollar value. I don’t know if I buy that. By that definition mentally deluded people can be wealthy despite being in bankruptcy and the richest person in the world is not wealthy if they do not feel a sense of abundance.

    A few observations: the FIRE mantra of (extreme) frugality means that if people make it a habit, they can never be wealthy. Without ever hearing about FIRE, that is what happened to my parents. They were both born or experienced poverty in childhood and it affected their attitudes towards money for the rest of their lives. Similarly the FIRE cautionary warning against lifestyle inflation runs counter to your definition of wealth.

    My parents did not look upon life as something to be enjoyed. Life is about survival and in the modern world, more money increases your chance of survival. It was a vicious circle. Enjoyment is something only rich people can afford and since my parents did not consider themselves rich, they couldn’t enjoy their lives. Money = security. Security is as close to enjoyment as you can get. They liked to go to the movies; they enjoyed it. However, the movies cost money so it lowered their security and hence the cost of the movie reduced their enjoyment of the movie. The logic is irrefutable.

    I have this same mindset to a much lesser extent.

    • FullTimeFinance
      FullTimeFinance January 30, 2019

      That is quite a draconian mindset…

      I think the deluded person is wealthy if the state is sustainable. IE if they were able to bop along without a care in the world until the day they died, we could all be so lucky. If it is a temporary situation until they end up in the street, not so much. Needless to say, I wouldn’t recommend playing those odds.

      • Dan
        Dan January 31, 2019

        “I think the deluded person is wealthy if the state is sustainable.”

        By that reasoning if the deluded person is so out of touch with reality that living on the streets is not enough to “bring him or her to his sense” he is still wealthy. The more schizophrenic one is, the more likely they can potentially achieve wealth?

        My parents’ attitude was not front & center all the time but it was always present in some form. Spending money was always a serious decision for them. They recognized the need to “treat themselves” occasionally but that didn’t take the sting away from spending money.

        When you encounter hardships as a youth, it toughens you up. Both my parents experienced poverty during childhood – poverty that is unimaginable today due to government programs like food stamps and housing assistance.

        For their entire lives, I hid my charitable contributions from them. They considered charitable contributions to be foolish, reckless and counterproductive. Instead of donating $1 to charity, save it so that you can feed yourself and your family in the future if times get tough & you are down to that last dollar. Relying on charity or government assistance was a moral failing akin to being a criminal or alcoholic or drug addict. A “normal” person should be ashamed of not being able to take care of their family and doubly ashamed to take charity or government handout because now they are forcing the rest of society to take care of their family. Only orphans, elderly widows and war refugees should be allowed to accept charity & government assistance.

        Take care of yourself and your nuclear family – if everyone followed that rule, society would be Utopian. If you have so much money that you can guarantee the welfare of yourself & your nuclear family, save the money so that you can take care of your extended family & neighbors. If you have so much money that you can guarantee the welfare of yourself, your nuclear family, your extended family & your neighbors, donate to charity but only the wealthiest have that much money. Anyone with a net worth less than the Rockefellers was putting on airs or being reckless by donating to charity. That was my parents’ attitude. I’m not as hard-core but to some extent I agree.

        • FullTimeFinance
          FullTimeFinance January 31, 2019

          I obviously was not intending my definition to go as far as someone who is homeless and has broken with reality.

          It’s interesting hearing about how other individuals see the world. I can’t say I agree with your parent’s world view, but everyone has a different perspective.

  3. xrayvsn
    xrayvsn January 30, 2019

    I remember the movie about J Paul Getty who was the richest man in the world at the time but always wanted more. He even installed a payphone in his home so people couldn’t make free calls.

    That to me is not being happy. I still would classify him as wealthy though.

    I think a better distinction would be a tiered system based on abundance or scarcity and nothing to do with net worth. There are many who are truly content and happy and have almost nothing to their name. Then there are those like Getty.

    • FullTimeFinance
      FullTimeFinance January 30, 2019

      To me, Mr. Getty was rich but not wealthy. That being said I would be interested in hearing more about your tiered system idea. Any interest in writing a guest post?

      • Xrayvsn
        Xrayvsn January 31, 2019

        I actually don’t have a tiered system implemented or even thought about it but when I read your post it sort of popped in my head that a tiered system based on happiness rather than wealth would be more practical for people because most people will find out money does not buy you happiness and in the end it is how happy you were and not how rich that matters (again using Getty as an example)

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