I have $7.5 million but don’t feel rich – at what net worth do people actually consider themselves wealthy?

A Reddit user with a $7.5 million net worth said he doesn’t feel rich. He described himself as being “comfortable,” because he would be able to afford not to work for a year. However, he said that he won’t feel rich until he has around $20 million, and he also won’t feel comfortable giving up working until he hits that net worth.

He wants to know how much other people would need to feel rich, and how high someone’s net worth needs to be before others see them as rich. 

Feeling rich is about your mindset — and your spending habits

The question of how much it takes to feel rich is going to depend a lot on your mindset, as well as on your spending habits. The makeup of your net worth also matters too.

The reality is, a nest egg of $7.5 million, if it is all in investments, could produce an annual income of $277,500 per year at a safe 3.7% withdrawal rate.  That is more than enough money for most people to live on very comfortably each year, so if the Reddit poster wanted to, he could quit working now and enjoy a very nice lifestyle based on his investments already.

However, if he lives in an expensive home in a high cost of living area, takes multiple long and expensive vacations, dines out in expensive restaurants every night, and is paying for expensive private schools for a couple of kids, then he might struggle to get by on $277K or be unable to at all.  And, if he surrounds himself with a bunch of people who have $20 million and who live lavish lifestyles, he is going to feel poor by comparison.  

If his money isn’t invested, but is tied up in illiquid assets like an expensive house, then he’s also not going to feel very rich since he’ll have high costs associated with the home without a lot of accessible funds. 

All of these factors are going to affect how wealthy you feel, as well as your perceptions of other people’s wealth. The good thing is, you can make the choice about where you want to live, who you spend your time with, and what it takes to feel like you have enough — so you are in control of how much wealth you need to actually feel wealthy.

It shouldn’t matter if you’re rich — it should matter if you can live the lifestyle you want

While the Redditor’s question is an interesting one, it’s ultimately not the right one. The goal of building a big nest egg isn’t to become “rich.” The goal is to become financially independent and have freedom. 

The poster should not set an arbitrary target, like $20 million, and decide he’ll be “rich” when he gets to that point. Instead, he should work with a financial advisor to help him determine how much money he needs to be able to cover his costs and work only if he wants to. Once he is financially independent and can support himself in the lifestyle he wants without a job, then he’s achieved the ultimate goal of being able to shape the life he wants. 

A financial advisor can help to provide clarity on these types of issues, and can help you to feel richer because you’ll be able to develop the confidence that your funds provide all you need to thrive.