It is how much money Americans think that you have to be rich. Are they right?

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Many of us dream of being rich, but what does it really mean? Is there a certain amount in the bank that propels someone into the "wealthy" category?

To answer this question, the personal finance site, GOBankingRates, conducted an investigation and found that Americans had differing views on the subject. More than 35% of respondents said that to be wealthy, you needed a net worth of $ 1 million or more. On the other hand, 24% said that a person with a net worth of $ 500,000 or more could be considered wealthy. And 20% insisted that you are not rich until you have a net worth of $ 10 million. Yuck!

But here is the thing about net worth: you can have one that exceeds the above thresholds while having financial difficulties. Yes, even people worth millions of dollars are victims of poor financial management and end up stressed and miserable. So, rather than focusing on a single amount to define wealth, a better bet might be to reach a place of financial security no matter what it means to you.

Heap of one hundred dollar bills

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How many Benjamins are equal "rich"? It depends. Source of the image: Getty Images.

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In my life, people have said things like, "If I won the lottery and added $ 5 million to my bank account, I would be ready. But the reality is that they would not be. Why? They would have no idea what to do with this money and would probably waste it quickly.

The problem of having more money, it is that being in this position makes you spend more. On the other hand, if you focus on building a net worth sufficient to be comfortable and eliminate the financial worries, you will come to a much happier place – a place where you do not doubt yourself or stretch your budget to keep pace with the Jones. .

Retire, for example. You will often hear that to take a rich retirement, you need $ 1 million. However, many older people retire much less and still benefit fully from their later years. So before you decide, think about what you want to do during your retirement and what it will cost to maintain the lifestyle you are looking for. You may be able to retire with savings of $ 400,000. It's really a matter of choice and priorities.

Of course, there is nothing wrong with setting financial goals and achieving them. If you want to accumulate $ 1 million in savings, whether for retirement or simply, go for it. But do not just choose this goal of a million dollars, because it seems impressive. With a saving of $ 800,000, retirement may cost you well. If this is the case, there is no need to fight against the fact that you did not reach your initial goal. (Also, if the market tends to go down as your career ends, you may see your savings balance plummeting out of nowhere, which is unfortunate, but it can happen. .)

On the other hand, do not feel too comfortable with having saved 1 million dollars either. Maybe having this money in the bank, or in your IRA or your 401 (K), will give you the impression that you have done it. But if it turns out that you need $ 1.5 million to lead the lifestyle you want, you will have to make sacrifices.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "That's why I'm not a big fan of focusing on a single goal of universal saving, I believe in the determination of wealth you need to live comfortably and safely at different stages of life and to strike a balance between spending and saving. "data-reactid =" 32 "> That's why I'm not a big fan of universal savings goals.Rather, I think it's worth knowing how much wealth you need to live comfortably and safely at different stages of life and to strike a balance between spending and saving.

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For example, I am in favor of saving 20% ​​of your income for retirement. For me, this is enough to make respectable contributions to a pension plan, but not to the point of depriving you of your years of work. I also think that everyone needs an emergency fund with three to six months of living expenses.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "But I do not believe that all Americans should aim for a net worth of $ 1 million, or another predefined figure. I think we all have to decide what we want in life. calculate what it will cost; and organize our finances so that we spend appropriately, saving wisely and resting easily at night. "data-reactid =" 38 "> But I do not believe that all Americans should aim for a net worth of $ 1 million, or another predefined figure. I think we all have to decide what we want in life. calculate what it will cost; and organize our finances so that we spend appropriately, save wisely and rest at night.

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