In terms of assets, what do you consider to be "wealthy"?

[Dawson Leery]

EDIT: At what point does one's money buy them the influence of politicians?

Please discuss.

[Faygo Kid]

1. Being worth $500,000 without debt.

That's freedom.

[FreeJoe]

15. That seems low

Assuming that you earned about 4% on that money, you could spend about $25,000 a year. A person could live on that, but I wouldn't call it wealthy.

To me, wealthy is being able to live well without having to worry about money. That takes something in the $5,000,000 in assets range.

[JDPriestly]

33. Right now, interest rates on savings are about 1.1 to 1.3%

So if you had "only" $500,000 in assets, your annual income from that would be about $5,000. Not rich, not rich at all.

[REP]

36. And if your assets were all cash, which is a terrible idea

As you mentioned, interest rates suck now. My (small) long-term investments are returning between 12-432% (stocks). Leaving it as cash would have been foolish, and I'm far from wealthy.

[JDPriestly]

41. Raise capital gains taxes by a bit and you don't need tow

worry about taxing assets.

It is incredibly complicated to tax assets, and as I pointed out, you already paid your income tax on the income from which you bought your stocks.

What is wise in terms of how people hold or invest their money depends in part on their age, their investment goals, their confidence in the stock market and whether they want liquidity as you probably know.

Taxing earnings from your stocks makes sense, but taxing your capital before earnings makes utterly no sense regardless of how much you have.

[Name removed]

55. Deleted message

Message removed by moderator. Click here to review the message board rules.

[bluestate10]

16. That is being in good financial shape, but is not wealthy. nt

[JDPriestly]

32. What if half that money is in the person's home and the person

is paying property tax on that home?

Assets are a measure of wealth, but are usually already taxed or difficult to tax.

That is why the federal government taxes incomes. It's easier to ascertain the amount of income than the value of assets.

Think of what a mess we had in 2008. Much of the problem was that housing had been overvalued.

[hobbit709]

2. If you can't spend it fast enough to go broke

and never have to worry about the bills, then you've got it made.

[GOPBasher]

3. It's hard to say, because it depends on where you live, but

I'd say if someone has a house that's paid for and another $500,000 in various assets, one is pretty rich. It also depends on how many kids they have, but I'll stick with that level.

[IphengeniaBlumgarten]

10. I would call that comfortable

Wealthy is when you don't recall off-hand how many houses you have. (Like John McCain, in the last election.)

Comfortable is when you don't have to worry about a sudden unexpected expense.

[Lucky Luciano]

31. I like your definitions +1.

[JDPriestly]

35. If you have total assets of $500,000 including $200,000 as the sale

value of your home and you get cancer and have to spend $5,000 per month for a nursing home. That's $60,000 per year. Your money will not go far.

Also, right now interest rates are about 1.1% on savings and even treasury bonds. That means that on $500,000 your annual income would only be about $5,000. Not rich, not rich at all.

That is why we need inheritance taxes.

It is one thing for an elderly person's heirs to pay a tax on the $500,000 after the elderly person's death.

During life, taxes should be assessed in a limited way on property (property taxes which most states already impose on property we own. It's paid when you pay your rent if you don't own your property.) Taxes during life should be imposed on income -- on earning -- on the interest a person gets on the $500,000.

During his working life, the person who has $500,000 paid taxes on his income. So, that's why we don't impose taxes on a person's savings or wealth. The person paid the taxes before setting aside the savings. The person paid taxes on his income before making his house payment.

[elleng]

4. Good question, 'cause I suspect many here would put my family in that category,

subject therefore to much DU 'hate-mail.'

We're all attorneys (Dad, uncles, cousin, brother, me, husband,) essentially working people able to save some and invest, help kids w college + graduate educations, + travel. I'm now retired w Fed Gov pension and small amt SocSec, grossing abt $2500/month. Have Fed Employees Health Benefits.

'Worth?' Sold DC house for abt $800,000 few years ago, took abt $400,000 'out,' but suing 'husb' for my share now. So I'm 'worth' value of my '93 Toyo Wagon at the moment. Dad sold his FL house few years ago, invested earnings so he can pay his retirement home 'rent.'

I'd put us all at 'upper-middle.'

[Name removed]

9. Deleted message

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[fascisthunter]

17. I Would Put you in Upper-Middleclass

and no, I wouldn't send you hate mail. Nor do I think most would do. What folks who make less want, is for you and others who are well off to understand where we are coming from. These policies effect everyone, however they do impact those of us in the lower economic brackets much much more.

[elleng]

19. I understand that, and I think many do.

Thx

[fascisthunter]

21. cool

[Wait Wut]

25. Exactly.

The "I hate rich people" meme here is delusional. There are a lot of wealthy or semi-wealthy people in this country that do a lot for us little people. Kidding, kidding. I'm sure there are a couple of people on DU that hate George Soros, but you'll find a slew of people who pray that God throws a bolt through his chest. Alan Grayson? Heard he's not hurting, either.

[fascisthunter]

29. yeah, those with money trying to help us in the lower brackets

I commend them for trying. I could care less about how much wealth one has, it's what they do that effects the rest of us that I care about. Those who do not care, who have so much, and work against us, I despise.

We did NOTHING to deserve this.

[Wait Wut]

20. Sounds like my family.

I come from a long line of attorneys and politicians on my mother's side. Dad's side was my grandfather, a self-made millionaire. They also had a gambling gene that my father inherited. That's why I still work for a living.

[elleng]

37. No millionaires here, I think, nor gamblers. Worked for a living

because that's what we do!

:hi:

[Wait Wut]

39. I don't understand gambling.

I can't even bring myself to buy a lottery ticket. My brother has the gene, though. Lost a bunch in the stock market.

[elleng]

44. I think of stock market as different from 'gambling,'

but that's just me. AND don't 'gamble' in the market; invest in mutual funds w proven managers. No lottery tickets either!

[Wait Wut]

47. Agreed.

Mutual funds are the best option for low risk investing (depending on the fund). I used to have a "fake" portfolio made up of stocks and funds. Funds were always the better performers, no matter how well the stocks performed. If you're the gambling type and have disposable income, stocks can be fun. But, for the majority of Americans that can afford to invest, I recommend funds over all other options. Although, you do need to be really careful about fees. I'm not sure if things have changed in the past decade since I was playing investor, but the hidden fees and penalties in some funds were outrageous.

I've bought lottery tickets I think twice in my life. I always get really, really nervous and have to ask the cashier for help. I feel like an idiot and think I would have been better off to invest in a Snickers bar.

[bluestate10]

50. I have done well with my investments. But several years back I began

to re-think what I was a part of. My objective is investment in america and it's workers. Investing in stocks and mutual funds was not a way to do that. Even the so called socially conscious funds are lacking in their concern about job loss. Such is the journey that I am on. It is a difficult journey so far, but the end objective is worth the uncertainty. I don't expect people to follow my lead and hope they do what is right for them and their families.

[JDPriestly]

40. Assets indicate your total worth.

The estates of people who are "rich" should be taxed after death.

You already, presumably, paid taxes on your income when you earned it.

That is why your wealth in the sense of what you saved over your life is not the issue.

It is how much you earn on your wealth, your income.

Right now, you probably pay taxes on that already.

If you are making a great deal of money from investments, interest and rent, then most of us on DU would probably say that you should pay a higher tax rate, perhaps the rate that was imposed under Clinton.

Ravi Batra who teaches economics at Southern Methodist University says, and I think that history backs him up on this, that depressions and recessions result when the disparity of wealth is so great that the less wealthy cannot buy and therefore create too little demand.

Over and over throughout history when this disparity becomes too great, the wealthy gamble to try to make their money create more money. They don't really invest in things or services that can be used or sold.

The French aristocrats sat around gaming tables and played with their money.

When their king went broke under the pressure of his wars with England, the aristocrats refused to pay a realistic share of their money in taxes. So the French government raised the taxes on the poor and the artisan middle class. We know what happened next: a lot of heads ended up rolling at the foot of the guillotine.

We are a democracy. Hopefully we can return our economy to some equilibrium without a guillotine.

[JoePhilly]

5. I think the key point is that INCOME is not WEALTH

I point this out because the more wealthy I am, the less income I need.

If I am very wealthy, the last thing I want is INCOME. I want to DEFER income. I want other non taxable perks. Stock options well into the future.

[seabeyond]

8. exactly. i didnt catch the income part. i assumed we were talking about someone who DOESN'T

work. if having to earn an income to survive, not wealthy

[JoePhilly]

11. Right ... this is why the GOP wants no tax on dividends or on estates.

They only want to protect WEALTH.

They do not care at all about those who carry the heavy boxes, or what they get paid.

[JDPriestly]

43. The lack of taxes on the very large estates is just shameful.

[Yo_Mama]

24. A secured stream of income is a financial asset

No question about it. The wealthy absolutely want income - they need enough to live on!

[JDPriestly]

42. That is why we need the inheritance tax.

It is the least painful of all taxes since no one can take it with him.

The challenge for a wealthy person is to handle estate planning well, not necessarily just to avoid taxes (should be made as difficult as possible) but to plan the succession in management of a business, farm, whatever.

[bluestate10]

6. Having an income of $500,000 or more per year. With assets worth

at least $500,000. No personal debt.

[Yo_Mama]

27. How are you going to get income of 500K a year

off assets of 500K?

If you are working a job, you could always lose it. That's not wealth. If you're running your own company, you probably have much higher assets.

[bluestate10]

48. A person that makes $500,000 per year with $500,000 or more in assets

won't be hurting due to job loss unless that person is a poor money manager. BTW, most small, in infancy, companies do not have owners that have $500,000 yearly net income and assets of more than $500,000. Your analysis is a bit skewed.

[seabeyond]

7. wealthy would have to be at 5-10 million or beyond. where you can live freely

and in comfort, off the interest.

[bluestate10]

14. What happened to living off the land? I honestly am surprised by your

post given that you come off as one of the more progressive posters on DU. I wonder whether some of the tax the rich screeds are based upon a desire to see principles of economic fairness in practice, or simply about envy.

[seabeyond]

28. the question was... what is wealth today.

i certainly can't/won't live off the land. not my thing, nor do i have the ability.

but the questions is what one considers wealthy.

we can go even more out there and say wealth is a contentment in life, health, love. that is truly a wealthy person. but we were talking more materialistic.... $.

i am all for taxing people from 250k up on that up another 4%. i am all for all kinds of things that would hit people when they hit "wealthy". i am all for closing the loopholes. shit... i am for taking the piddly ass tax break bush gave my family away and bringing it back to the original number.

but to me, wealth is not having to work adn living off the money in the bank.... comfortably. and i see it would have to be around 5-10 million.

[bluestate10]

49. You "desire" a living standard. If you can't pay for that standard, tough.

The tax code should be fair to everyone. People that earn more should pay more in taxes. Loopholes that allow the truly rich to get away with paying less than they should need to be closed. By design, I have great flexibility in my living standard, I have life objectives that have caused me to craft a plan that allows me to realize those objectives, regardless of what happens in the moment.

[seabeyond]

57. i agree with everything you say. but then when you are living with someone else

there expectations become a part of you life. it would be easy for me to reduce to next to nothing. not so easy for husband. what do you expect, that i ignore his perspective of life. i wouldnt get far in marriage if it was all about me.

i could eliminate so many things. most of it is a meh to me. things dont matter much.

[seabeyond]

62. self deleted

[indurancevile]

60. To live off the land you have to own some land to live off. And have enough cash income to pay the

taxes.

I think the last window closed on living off the land in the 60s. Now it's just yuppie porn.

[SoCalDem]

12. It's a "squishy" term

For some, NO amount of money would be enough for them to call themselves wealthy, and for others it's just having enough to pay bills as they arrive..in full, and to be able to live comfortably.

Paying cash for a home would make one wealthy (in my book)

having that kind of ready-money probably means that all other avenues are taken care of as well.:)

[Cleita]

13. Considering I worked with and for some of the richest

people in the world at one time, the firm I worked for had a criterion that we didn't accept any new clients with assets less than ten million dollars. That is not income, but assets. That was considered the bottom line for being considered wealthy. Anything below that was considered middle class and vulnerable to the market place.

btw income is not wealth. Even if you earn what some of the banksters earn, if they don't save it and turn it into assets, they are only as wealthy as their next paycheck.

[bluestate10]

51. I agree with you. nt

[yurbud]

18. if you have enough money to not work the rest of your life, live high on the hog, and leave enough

for your kids to do the same,that's wealthy.

Less than that is a comfortable retirement.

[Yo_Mama]

22. It depends

I'd say being wealthy consists of owning a middle-class home debt-free and having enough income-producing assets to pay your taxes and live a middle-class lifestyle (with adequate insurance) for the rest of your life without draining more than 50% of your assets. In short, being able to retire.

Most people would define being wealthy as having enough assets to support a far better lifestyle.

It can't be a dollar figure, because home values and tax rates and costs of living vary hugely even around the US. For example, in a lot of places in NJ a low-mid home might cost you $8,000 - $10,000 a year just for property taxes. That's a lot of moolah over the years to keep the home.

Also, you should define secured income streams as wealth. For example, the average recently retired NJ cop might get a pension of $75,000 a year plus paid medical. That's enough to be wealthy IMO. The medical benefits are worth at least an extra $20,000 a year, so that's a net income of $95,000 a year. You would need about 1.5 million in 30 year Treasuries at 5% to produce that lifestyle, and then you add the home, so at least 1.75 million.

I find that most people are deeply dishonest in discussing this issue, in part because they don't do the math and in part because everyone wants someone else to pay the taxes!

If you consider "wealth" as having enough assets to support a significantly better lifestyle without working, then in terms of assets or secured income, "wealth" would be moie along the lines of having a secured stream of income 150K-200K or assets capable of producing that return without significant risk of loss - that would be income-producing assets of over 3 million, plus a paid-off house and some toys, so net assets at four million.

However right now 30 year Treasuries only yield about 4.25%, so the assets you need to be wealthy have gone up considerably - make the above two examples 2.25 million and 5.3 million.

[fascisthunter]

23. Multi-Millionaires... $50-100 Mil

[kenny blankenship]

26. At least $ 2 million in liquid assets

2 Million liquid cash is about average that banks require from depositors for access to their private banking services. So there's an external reference point for "wealth"- bankers consider someone with 2 million burning a hole in their pocket a customer worth attracting with personalized services and attention.

This 2 million figure would not include the value of your home(s).

Here's a different way of calculating wealth and coming up with a threshold of 2 million in liquid assets. Can you derive a six figure annual income (comfortable life), providing you with six figures worth of walking around money after taxes (comfortable and secure in comfort), strictly from passive investments?

Can you spend over 100,000 a year without having to work for it yourself? That's wealthy. 100,000 a year is still a middle class income. If you can make that and you can afford to spend every penny of it every year on whatever you want, just from the return on your invested capital, you are wealthy. You are able to live well above average while doing sweet fuck all to earn it. You may not be the subject of a Forbes cover article, or make Capitalist Pig Of The Year, but you can live comfortably from your capital surplus alone without diminishing it. In other words you don't have to work for a living, even if you do work very hard at something.

That takes about 2 million in liquid assets if conservatively invested. The usual (old era) figure for average return on capital was 10% annually over a long haul. I am dinging that down to 8% because if you mean to live off your capital without using it up, you don't want to lose a bunch of it at a time on risky investments, and you may lose some anyway because the world is now being run by idiots and carnival barkers.

If you have 2 million in liquid assets, your net worth is probably at least double.

[taught_me_patience]

45. Nice post, I agree with this. n/t

[JDPriestly]

30. Assets are not the measure of wealth.

Income is. Income is most easily taxed. Assets are subject to property and use taxes, and those are imposed at the state level and are quite cumbersome because they involve assessing the value of the property to be taxed.

So, your question is not relevant to federal debt to GDP ratios except for one thing.

Inheritance taxes.

In that case, traditionally maybe $500,000 was considered to be subject to federal tax levels. That amount may have gone up.

Inheritance taxes on large estates is the way to go. They do not penalize a person while living.

To tax a person's assets would be not only unworkable but a questionable practice.

Think of the "assets" that were lost in the crash in 2008.

Some people who had modest assets before that crash became penniless soon after. When would you have assessed the taxes on their wealth? Before or after they became impoverished.

[Creideiki]

61. Estate taxes are critical.

Most people don't know why they exist. Here are a few names:

Vanderbilt

Carnegie

Rockefeller

Inter-generational wealth has a stagnating effect on society--in particular the potential for class mobility. Without the estate tax, we set up a moneyed aristocracy, which was one of the things that the Founders were specifically against. And yet, a hundred years later, we went right down the same path as in the First Gilded Age. There's a reason why the current era is referred to as the Second Gilded Age; it's not a compliment.

[WinkyDink]

34. More than 2 million saved is very comfy. But wealthy enough to bribe? At least $10m.

[Spider Jerusalem]

38. Wealthy? Possessed of enough assets to live off the interest.

Without touching the capital. Most Americans aren't "wealthy". Not even people who make $200K a year. Most of those people? Have mortgages and credit card debt to finance an upper-middle-class lifestyle that's really, strictly speaking, beyond their means (most of it due to the social pressures and expectations that come along with having a professional/managerial job). Ten million US$ in assets is probably the minimum amount to enable one to live the sort of lifestyle that requires a few hundred thousand a year in income to maintain (McMansion in a gated community, country club membership, etc.)

[Philippine expat]

46. Need 3 things to be wealthy

1. Paid off house
2. A none wage income big enough to pay average monthly bills
3. Decent to good health insurance

If you want an amount, in addition to #1 and #3 above you would need at least $2 million

[rucky]

52. I don't think it's as much measured by a dollar value

as the ability to offer a politician something in return for a favor of greater value. Seems like every politician has their own price, but if you want to check going rates, check Duke Cunningham's Bribe Menu:

http://discoverseattle.net/forums/index.php?PHPSESSID=fbb578406624f0b13c245532c2950282&topic=394.0

[bluestate10]

53. Wealthy and not wealthy depends on a set of choices that a person makes.

Every once in a while stories are published about people that made meager earnings being multimillionaires at death. Those people lived comfortable, non-extravagant lives. My view on wealth is that a person must make a choice between desires and necessities. If a person wants to live in a fine furnished home in a city or bustling suburb, that person should expect to suffer if he or she can't pay for those luxuries.

[Synicus Maximus]

54. Nothing below $10 million.

[Blasphemer]

56. I'd say 5 million

Assuming that no more than 1.5 million is tied up in real estate. I think many people with a comfortable amount of wealth end up sinking a huge chunk of it into a home and its maintenance which limits their day-to-day wealth. As for buying the influence of politicians, I think that depends on their business ventures. Just using the Hollywood left as an example - there is tons of money there collectively but the movie industry is not one that is likely to influence political policy much. They can bring attention to causes, issues and candidates but as far as policy goes, their influence is limited. The same amount of money in the oil or defense industries buys a whole lot more influence.

[Dawson Leery]

58. kick

[indurancevile]

59. I consider the top 1% wealthy, & the top .1% super-wealthy, the people who actually own

& run things.

Top 1% starts at about $300K-something in yearly income, last time I checked. Maybe it was $400K-something, can't exactly remember. Normally assets would be larger than that, as the top 1% owns more than 40% of US productive assets.

[TheKentuckian]

63. Rich=5 million, wealthy=50 million