How Rich Do You Feel?

To feel rich in America the average American needs either $150,000 in annual income or $1 million in net worth, according to Gallup

How much income would you need to feel “rich?” Gallup recently conducted a poll and discovered that the median income needed by Americans to feel rich was $150,000. That is three times the roughly $50,000 median annual household income of Americans.
Probing a little deeper, the survey results revealed the following interesting points:

1)    15 percent of the respondents said they needed to earn $1 million or more to feel rich while 30 percent said $100,000 or less would make them feel rich.

2)    Women said they needed $100,000 per year to feel rich while men needed $150,000.

3)    College graduates needed $200,000 to feel rich while non-college graduates needed $100,000.

In a separate question, Gallup asked Americans how much net worth they would need to feel rich. The median response was $1 million.

So there you have it – to feel rich in America the average American needs either $150,000 in annual income or $1 million in net worth.

Now, let’s contrast that with our tax laws. The highest marginal tax rate starts when single filers or married couples filing jointly reach $379,150 in taxable income. That’s quite a bit above the median $150,000 number that was reported by Americans to make them feel rich.

According to Gallup, “The question of the point at which someone becomes rich certainly has policy implications in the United States. Gallup finds Americans now about evenly divided on whether the rich, broadly speaking, should be heavily taxed.”

We can likely expect to hear a lot more about tax policy during the upcoming elections later this year.  Let’s hope our “friends in Washington D.C.” aren’t paying too much attention to the latest Gallup polls.

Whether or not one feels “rich,” is often a function of experience, expectation, and attitude. One can certainly live a rich life when we also consider the value of non-monetary assets, such as friends, family, and overall quality of life.

Other conditions have an immediately negative effect on our feelings of richness.  For example, you may have noticed the last time you filled your car gas prices are on the rise again. In fact, CNBC reported gas prices are at a record high for this time of year. The report says gas prices could hit an all-time record high this spring.

Gas prices aren’t the only thing on the rise. Tensions in Iran and the Middle East are stoking a rise in oil prices. Together, higher gas and oil prices could take a bite out of consumer and corporate wallets.  Unless you own an oil well or two, expect to feel a bit less rich each time you have to fill up the tank.