I listen to the American Public Media’s Marketplace  shows almost every day (this was before Lynnae, Steve and I were on last week , which was really cool!) and a few months ago there was a personal finance segment , in which a caller asked about annuities in their IRA. About halfway through the answer, the personal finance expert, Chris Farrell, describes “rich” as someone who has maxed out their IRAs ($5,000/yr) and their 401(k)/403(b)s ($15,500/yr) and still has discretionary income to contribute towards investments.
I thought it was a great definition of financially rich because it was both concrete (gives a set dollar amount and criteria) and financially responsible in its message (meaning rich people should max out their IRAs and defined contribution plans). Of course, rich is a much broader word than dollars and cents and I would extend that definition to include some comments about happiness, family/loved ones, and fulfillment (basically fulfillment of Maslow’s entire Hierarchy of Needs, in a sense), but I want to leave that out of the discussion for now).
I asked some bloggers earlier this week what it meant to them and here’s what they said:
I’d like to know, how much is “rich” to you?