Determining how much money per month makes someone “rich” is subjective and depends on many factors. However, there are some general benchmarks that provide a framework for what level of income may be considered wealthy.
What is Considered Rich in the U.S.?
In the United States, there is no definitive monetary threshold for being considered rich or wealthy. However, some common benchmarks include:
- Top 1% income: Households earning $538,926 or more per year fall into the top 1% of U.S. income earners. This works out to around $45,000 per month.
- Top 5% income: Households earning $240,712 or more per year fall into the top 5% bracket. This is around $20,000 per month.
- Top 10% income: Households earning $168,000 or more per year are in the 90th income percentile. This comes out to around $14,000 per month.
Based on these income distributions, a monthly income between $10,000-$20,000 is generally considered wealthy or rich by U.S. standards. However, cost of living differences across the country mean that income thresholds for being rich vary greatly between states and cities.
Cost of Living Adjustments
The income required to be considered rich differs substantially based on where someone lives due to significant variations in cost of living.
For example, $100,000 per year provides a luxurious standard of living in some low cost midwestern towns. But in high cost coastal cities like San Francisco or New York, $100,000 per year is considered middle class or even working class.
To account for cost of living differences, many economists recommend adjusting income thresholds for wealth upwards in high cost metro areas. For example:
- In low cost areas like St. Louis or Pittsburgh, $150,000 per year or around $12,500 per month is considered wealthy.
- In moderate cost cities like Atlanta or Dallas, $200,000 per year or $16,600 per month is a level typically associated with being rich.
- In high cost areas like Los Angeles or Washington DC, $300,000 per year or $25,000 per month is a income level more commonly associated with wealth.
- In very high cost cities like New York City or San Francisco, $500,000 per year or $41,600 per month is a level closer to what may be considered rich locally.
As these examples illustrate, a $100,000 salary means very different lifestyles depending on location. Adjusting for local costs is important for determining comparable levels of wealth across different geographies.
Wealth Benchmarks
Income is not the only way to define being rich or wealthy. Accumulated net worth is also used as a benchmark, often defined as:
- Millionaire: $1 million or more in total net worth
- Decamillionaire: $10 million or more in total net worth
- Centimillionaire $100 million or more in total net worth
- Billionaire: $1 billion or more in total net worth
By these measures, having a net worth of $1 million or more is generally considered wealthy, with gradations of wealth defined by higher tiers of millionaire status.
However, net worth can be deceiving. Someone with very high net worth may not have much actual liquid cash flow. Conversely, high income earners may have substantial monthly cash flow but much lower net worth due to high living expenses.
Therefore, both income and net worth are useful benchmarks for evaluating wealth, but not perfect measures on their own.
Lifestyle and Consumption Benchmarks
Wealth can also be defined based on lifestyle and consumption habits. Some typical benchmarks for a rich or wealthy lifestyle include:
- Owning luxury vehicles such as high-end imported cars or sports cars
- Owning multiple residences including vacation homes
- Regularly dining at Michelin star restaurants
- First class international travel for vacations
- Sending children to elite private schools
- Belonging to exclusive clubs and social circles
- Having live-in domestic help such as chefs, nannies, or landscapers
- Owning or chartering private jets
- Collecting high value luxury goods such as watches, jewelry, art, wine, etc.
The ability to afford these types of exclusive lifestyles is often seen as a signifier of wealth. However, some individuals may choose more modest lifestyles despite having the means for extravagance.
Impact of Family Structure
How much money is considered rich also depends greatly on family structure. Income and expenses for a single person are very different than for a family with children.
According to surveys by Charles Schwab, the amount of personal net income considered financially comfortable for different household structures is:
| Household Type | Comfortable Net Monthly Income |
|---|---|
| Single person | $4,300 |
| Married couple without kids | $8,700 |
| Married couple with 1 child | $10,800 |
| Married couple with 2 children | $14,300 |
This data illustrates how the income needed to live comfortably rises substantially for households with children. So while a $150,000 annual income might be considered rich for a single individual, a married couple with kids would likely need over $200,000 to feel comparably economically stable.
Career Effect
Perceptions of being rich can also be influenced by career choice. Income levels considered rich relative to one profession may seem middle class compared to others.
For example, investment bankers making $500,000 per year may not feel rich compared to private equity fund managers earning tens of millions. But lower paying careers like teaching would consider someone wealthy who has a fraction of those incomes.
These comparisons create reference dependence, where income and wealth are judged relative to occupational peers rather than some absolute standard. As a result, feeling rich is often tied to earning more than your colleagues rather than any fixed dollar amount.
The Rich Get Richer
An interesting psychological effect also occurs where perceptions of wealth tend to rise as individuals earn more income. Someone making $80,000 per year may initially feel rich if they grew up in a middle class household. But after reaching higher income brackets, their definition of rich adjusted upwards.
This phenomenon causes the threshold for feeling rich to be a moving target that increases alongside income. Making more money raises material expectations, resulting in more money being required to satisfy the same feeling of wealth.
In other words, the rich tend to constantly redefine how much money qualifies as rich based on their own net worth. There is typically no satiation point where someone feels they have “enough” money.
Conclusions
Defining how much money makes someone rich is highly subjective and depends on factors like:
- Cost of living
- Family structure
- Career field
- Net worth versus income
- Material expectations
However, some reasonable benchmarks for high income in the U.S. are:
- Top 1%: $45,000+ per month
- Top 5%: $20,000+ per month
- Top 10% $14,000+ per month
And comfortable middle class lifestyles for families require $10,000-$15,000 in monthly income, depending on number of children.
But perhaps most importantly, being rich is a fluid concept. Someone’s definition of what constitutes wealthy often changes as their own income and net worth rise over time. So achieving a fat salary is not necessarily a cure for feelings of financial inadequacy.