Stages of wealth

[corn18]

This is an interesting article on the stages of wealth. Seen many arguments on the definition of rich and this article seems to remove the amount of money and relates wealth to income vs. spending.

I'm at 7 and hope to be at 8 in 2.5 years.

http://investmentmoats.com/financial-independence/stages-of-wealth-financial-independence/

Not click bait.

[Nutria]

When reading this, I start to wonder who wrote and where they live:

• They can afford to have 4 children, therefore they are rich
• They work in government civil service, they are much richer than us
• The family goes for 3 holidays a year, one that is non-southeast Asia, they must be rich

[corn18]

When reading this, I start to wonder who wrote and where they live:

• They can afford to have 4 children, therefore they are rich
• They work in government civil service, they are much richer than us
• The family goes for 3 holidays a year, one that is non-southeast Asia, they must be rich

Those are examples of people assuming you are rich because of those statements. I'm sure people thought I was rich when I was in mega debt.

[scfr]

That's an interesting perspective, thanks for sharing.

[msomnipotent]

I wouldn't call having one year's worth of expenses saved as having "F U money". Not even 10 years worth. F U money is "I'm mad at you so I'm buying your husband's employer and firing him. F U."

I guess I am at a 6.

[disneysteve]

I'm between 6 and 7. Of course, if my income were to stop tomorrow for some reason, we could easily adjust our living expenses to make our savings last longer but today, we're at 11-12 years of current spending in savings.

I'm hopeful that that number will start to climb over the next year or two as my income has risen and our expenses have fallen, which is a nice combination when it comes to wealth building.

[Snydley]

By wealth aAsset's annual cash flow- do they mean how much your wealth grows on its own (without you contributing) each year?

I am just at 6. Interesting scale.

[rennigade]

We appear to be at 6. For a lot of us, 7 would depend a lot on the market. If the market is bullish...we're at a 7. If its flat or bearish...we're not at a 7.

[scfr]

By wealth aAsset's annual cash flow- do they mean how much your wealth grows on its own (without you contributing) each year?

This is just my interpretation, but it looks like the Wealth Asset annual cash flow equals the Wealth Cash Flow as illustrated on the "Wealth Machines / Wealth Cash Flow" diagram. As far as whether or not the individual is contributing or not, that may depend on the types of Wealth Machines, and what you consider to be a contribution. For example, someone who buys and holds rental property, flips properties, or starts & runs a business, isn't just sitting by passively while their "Wealth Machine" spits out money. I would consider the efforts of an active real estate investor or business owner to be contributions.

[QuarterMillionMan]

I'm about #5.

[bennkar]

I'm at 7 as is the GF, but adding in our pensions coming down the road we're more like 8, maybe 8+. Intellectually I know this but emotionally I am having a hard time accepting it.

[terri77]

Stage 6 for me.

[Drake3287]

Stage 9 but that’s because of a mix of both a pension and savings/investments. I’’m proof that an “average” person can retire like a millionaire if they plan and invest/save for the future. May sound like a humble brag but the issue I have is that the majority of my friends and family barely live paycheck to paycheck and it can be difficult at times when we live a slightly different life style as them. And yes, I have never talked or mentioned our financial situation with anyone, very awkward at times.

[disneysteve]

the issue I have is that the majority of my friends and family barely live paycheck to paycheck and it can be difficult at times when we live a slightly different life style as them. And yes, I have never talked or mentioned our financial situation with anyone, very awkward at times.

I agree completely. Most people are broke. We read the stats all the time. 60-70% of people live paycheck to paycheck. Most people couldn't handle an unexpected $500 expense.

When you are in the minority, like many of us, it can be hard to relate. That's a big part of why I love this site so much. I don't have many people in real life who I can talk to openly about our financial situation. Most people either don't want to hear or just can't comprehend that we have a 7-figure portfolio. While I'm trying to figure out where to invest an extra $1,000/month, most people I know are trying to figure out if they can pay more than the minimum on their credit card this month. My daughter has remarked a few times about the very same issue with her friends from college. Most are broke. It made it really hard when she was in school because she would be interested in going out to dinner or attending some activity and none of her friends could go because they had no money. If nothing else, it has made her far more appreciative of us and all we've done for her.

[Snydley]

I cannot believe is how nearly everyone I know is broke, regardless of how much $ they make! I was out to lunch with 3 other faculty at my university recently- finances came up in conversation, and two admitted that they are broke! The two that said this make 170-180K per year each (I know this because we are on a grant together and all work on the budget and we see everyone's salaries). I said to them, "how is that possible!" Well, they live in the most expensive suburbs, with the 'best' schools, one has med school loans..and I guess play the role of the upper class. One said she is in the red every month (she is a physician scientist and so is her husband!) and the other said he'll be working until he's 70 and has no money saved for his kids college and no savings.

On the other end, my cousins and I are potentially going to make a buyout offer to some other relatives for their share in our family's lakefront property for 50K. I told them I have 25K saved to contribute, and guess how much they have saved towards it even though we knew this was coming years ago? Nada. One might have 10K. The other (no college, works as a school bus driver) just bought the fanciest camper I've ever seen, with granite and a gas fireplace!! WTF! Also, DH and I will be hanging alone quite a bit in retirement as it stands now; I'd say 80-90% of our close friends will not be retiring at a reasonable age if at all. Sorry, vent over.

It is a reason I like this site; there's no way I could talk about our financial status with anyone IRL for the most part.