• In my Rich Habits research, I interviewed 233 wealthy individuals (177 of whom were self-made millionaires) with at least $160,000 in annual gross income and $3.2 million in net assets.
  • I do regular interviews about my research, and people always ask me: How much money do you have to have in order to be considered wealthy?
  • The short answer is $3.2 million, enough to give you about $150,000 a year in passive income.
  • But the more accurate answer is that you’re rich when your non-work, passive income equals or exceed your living expenses — and if your living expenses are lower, you need less money to be considered wealthy.
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John D. Rockefeller Sr. was, at one time, the richest man in the world. He spent the last 40 years or his life giving his money away to family and various charities.

He owned two homes, one in Sleepy Hollow, New York and one in Ormond Beach, Florida. His Sleepy Hollow home, known as the Kykuit Rockefeller Estate, was very large and very expensive to maintain.

Because he had given away most of his wealth, he was forced to borrow money from his son, John D. Rockefeller Jr. He only had about $7 million left ($131 million in today’s dollars), and that money did not generate enough income for him to maintain his standard of living.

I do quite a few media interviews on my Rich Habits research, in which I interviewed 233 wealthy individuals (177 of whom were self-made millionaires) with at least $160,000 in annual gross income and $3.2 million in net assets. Almost every time I speak about my research, I am asked the same question: How much money do you have to have in order to be considered wealthy?

So I have to ask one in return: What does wealthy mean?

I’m a certified accountant and financial planner, and I say wealthy means your invested assets generate enough income to fund your standard of living and pay the taxes on that income.

In other words, you’re rich when your non-work, passive income equals or exceed your living expenses.

Alternately, if you have no invested assets, but are one of the lucky few who have a pension, you would be considered wealthy if your pension generates enough income to fund your standard of living and pay the taxes on that income.

Fine. But if you’re not one of the lucky few who receive a pension, what is the amount of wealth you need? What is the number?

While there is no easy answer to that question, I am fairly certain that the most correct answer is $3.2 million.

That’s because $3.2 million, if invested prudently, should generate about $150,000 to $160,000 a year in passive income. Even in expensive states like California, New York, and New Jersey, $150,000 a year should be more than enough to enjoy a comfortable, financially free lifestyle.

So, $3.2 million, I would argue, would make just about anyone “wealthy.”

But you don’t need $3.2 million to be considered wealthy.

If your standard of living is low and your monthly net is less than, say, $3,500, you could be considered wealthy if you had $1.2 million in invested assets. If invested prudently, $1.2 million should generate between $50,000 and $60,000 a year in passive income.

So, at the bottom level of wealth, $1.2 million is the number.

For John D. Rockefeller Sr., $131 million was not enough to maintain his standard of living. And, no matter how much money you have, if you have to borrow money to maintain your standard of living, you won’t consider yourself “wealthy.”

The key to being wealthy, therefore, is standard of living costs that are less than your passive income. Your standard of living can make you wealthy — or not.

Thomas C. Corley, CPA, CFP, is the author of ” Rich Habits: The Daily Success Habits of Wealthy Individuals,” and ” Rich Kids: How To Raise Our Kids To Be Happy And Successful In Life.” Follow him on Twitter @RICHHABITS.