How long does it take the average person to become RICH

What can $1 million get you today, many people probably own primary residences worth much more than this.

For me it took 1 boom property cycle.

What is considered rich today?

It takes the typical self-made millionaire at least 32 years to get rich Business Insider Australia, 6 March 2015.

Extract below:

Entrepreneur Eric Watson, shown here, is one of the richest self-made men in New Zealand.

How long does it take for the average rich person to become rich
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What’s even more compelling is the age in which these self-made millionaires actually rang the bell and struck it rich. Here’s the breakdown from my study:

• 1% became wealthy before the age of 40
• 3% became wealthy between age 40 and 55
• 16% became wealthy between age 46 and 50
• 28% became wealthy between age 51 and 55
• 31% became wealthy between age 56 and 60
• 21% became wealthy after the age of 60

What may be even more disconcerting to the get rich crowd is that 27% of these self-made millionaires tried and failed at least once in business. Any entrepreneur reading this who has failed knows exactly what failing means. It turns your life upside down. It often results in bankruptcy. Families fracture and life is hard, when you fail. The path to riches, it turns out, is a long lonely one, paved with many potholes and numerous dead ends.

 

I would hardly call a net worth of 1 million dollars rich. It's a nice milestone but that's about it.

 

There's a very wide chasm between wealthy and 'comfortable' - many here seek early retirement which is more closely aligned with the latter rather than the former.

At what point does comfortable develop into wealthy?

 

Average takes into account the extremes in wealth and poverty, so average will never be rich though the median may well be either rich or poor.

We don’t see rich as we view this world through rise coloured glasses - we see and judge wealth with relativity to our lives/social circles & measure ourselves against these social norms. Surely those living in Elizabeth see Glenelg as the rich or Cromer vs Newport and even pitting South Yarra against Toorak, it's relative.

 

True, @MTR MANY PPOR are worth over a Mill these days
Remember in the late 80s when Lotto wins of a Million were a BIG DEAL
Yet now every draw in a Mill or more

I currently put the idea of being a "Millionaire" at $3 Mill

Owned PPOR, cash on hand and Superanuation of $1.4+ (total $3mill) should make for a comfortable lifestyle

I would be in the 3% based on "a million"
But in reality to be at my current $3 mill target I will be in the 50+ years (and by then will need $4 mill )

 

I think the Dennis scale of "rich" is a good way to describe the concept:

• $2-4 million: The comfortable poor
• $4-10 million: The comfortably off
• $10-30 million: The comfortably wealthy
• $30-80 million: The lesser rich
• $80-150 million: The comfortably rich
• $150-200 million: The rich
• $200-400 million: The seriously rich
• $400-800 million: The truly rich
• $800 million - $1.998 billion: The filthy rich
• $1.998 billion and Above: The super rich

The average wealth for an adult Indian is $4,645 (per investopedia).

 

Maybe we need to redefine it? If you exclude a fully owned ppor (ie sell down all other assets to pay off ppor debt), whether it's a $300k or $3m, how much to make life comfortable vs wealthy?

 

Their is also the concept of a greenback millionaire.

A person with $1m US net to invest.

 

I would be interested to hear what % of self made people reach the million milestone in their life and how this compares each decade, can only assume a higher % each one.

Probably a better measure.

Perhaps just been on this forum skews our views and opinions some what. There are people that consider it a huge milestone not living on the edge of a financial cliff each week and have enough in the bank to live for a month - from memory this is the majority of the population.

 

Its subj

When you do the sums you’ll see that you need an unencumbered portfolio worth at least $4million to earn that $100,000 a year after tax. Not everyone needs $100,000 pa and I get this. But I need more

Remember that’s $4 million worth of property and no mortgage debt, otherwise your cash flow will be lower.

And of course you’ll also need to own your own home with no debt against it.

I expect these yields may be slightly lower today?

 

Damn
All i did was blink
And my $3 mill target became $4 mill minimum

 

I think you would have to scale it person by person and even then it would become very complicated and depending on lifestyle and the constrains within that lifestyle..

 

Your 4m assumes that you want to leave your entire capital, plus growth, to your kids.

Not many do this. Most slowly reduce their capital.

 

1 mill is not what it was 10 years ago, let alone 20!


It'll be an "average" income by what decade?

 

Like the guy I was talking to yesterday. He is 63, living week-to-week and desperately looking for work.

That is me as well.

Same could probably be said for "modest".

I am very modest .

 

In similar news the Ultra High Net Worth Individuals increased in Australia for the last year (even Perth! )

Knight Frank Launches Wealth Report 2017 - TheUrbanDeveloper.com

Wealthy Individuals within Australia are generally deemed to be those with net investible assets (NIA) over $1M (or net of over $2.5M including the family home) and earning more than $250,000 per annum. Having said this, the ATO categorise ‘Wealthy Individuals’ as those who control a net wealth of $5M or more. The ATO categorise High Wealth Individuals as those who control a net wealth of $30M or more .

I believe the definition of an Ultra High Net Worth is in US dollars so can fluctuate quite a lot depending on currency shifts but UHNWI have a net worth of over US$30 million, excluding their home.

 

I don't use capital, live off rents, I keep growing wealth because I operate as a business . Most of the property investors who I have met that gave away their day job went on to create additional income streams/grow net wealth. No right or wrong, some people don't care, but if you are passionate about property and you can continue to make money then why not. Also, if you have needy children, what are they called the Y Gen then they will keep milking it for what's its worth... its OK they have no clue about this forum, all good at home

 

Even though PC members can be wealthier than the average population, what % of PC belongs in the Wealthy Individuals and High Wealth Individuals category?

My uneducated guess would be 20%

 

A quick way of calculating where your net wealth should be based on your age:

expected net wealth = ((total pre-tax income ) * (age)) / 10​

If your current net wealth is below the figure you calculated then you have some catching up to do.

I'm in front by about 20%