Want to Be ‘Rich’? Here’s What You Need, According to a New Survey

What does “being rich” mean to you? Some people might assume that you need millions of dollars to be rich. Others might say that the meaning of “rich” is when you can live off your savings and investments, without having to work anymore.

A recent survey from Jenius Bank found that most people have a more humble definition of “rich.” Americans would consider themselves rich if they could achieve just a few big financial goals.

According to Jenius Bank’s recent survey of Americans making at least $100k per year, here are the top three financial goals you need to achieve to be rich.

1. Being rich means: Being debt free (33.4%)

The Mind-Money Connection, Jenius Bank’s survey, found that being debt free ranked No. 1 on people’s definition of “being rich.” When asked what being rich means, “not having financial debt” was mentioned by 33.4% of the Jenius Bank survey respondents.

Some types of debt are useful, like mortgages, auto loans on reliable transportation to get to work, and low-interest debt that you can afford to pay off over time. But some debt really can drag down your personal finances — like high-interest credit card debt.

Being debt free might not be a realistic goal for everyone. Most people spend their lives having some monthly payments for cars, mortgages, and other borrowing. But the best debt payoff apps can help you make a plan to pay off debt faster. And if you are struggling to afford your debt payments or are falling behind on bills, you might want to hire a financial planner or sign up for credit counseling.

2. Being rich means: Being able to retire (33.1%)

The second-biggest indicator of “rich” status was “retiring early without concern about running out of funds” — 33.1% of survey respondents said being retired early was a sign of being rich.

Ultimately, the goal of saving and investing for retirement is to be able to stop working and replace your work income for the rest of your life. Many people can retire once they reach Social Security retirement age, and supplement their Social Security checks with 401(k) or IRA retirement savings. Some people can retire at younger ages if they rack up big balances in their retirement savings accounts and brokerage accounts, and are good at living frugally off the returns on their investments.

If being retired means “rich” to you, it’s important to know that not everyone who retires has $1 million in the bank. People tend to spend less money as they get older, especially if their mortgage is paid off. A “rich” retirement lifestyle might cost less than you think.

3. Being rich means: Building generational wealth (27.8%)

Would you like to save so much money that you can leave a financial legacy, and pass down wealth to your children, grandchildren, or other family members after you’re gone? That concept is called “establishing generational wealth,” and it’s another big financial achievement that the Jenius Bank survey respondents (27.8% of people) said was part of the meaning of “being rich.”

For most everyday investors, there are a few typical ways to build generational wealth:

• Buy real estate: If you pay off your mortgage and pass down your home as part of your estate after you die, real estate can be part of your family’s financial legacy.
• Buy stocks and bonds: Buying stocks, bonds, and other financial assets can be a big part of building generational wealth. Brokerage accounts, IRAs, and other investment accounts can be passed down to heirs.
• Build a small business: Small business ownership is another way that some families build generational wealth. If you have a successful business that can be sold for a profit, or passed down to the next generation of the family, this can be a big part of your financial legacy.

There’s no one “right way” to build generational wealth. But if you want to leave money to your heirs and loved ones, the goal should be the same as saving for your own retirement: Save money today, and invest it for the future in a way that is likely to deliver high long-term returns.

Try to grow your wealth for decades to come, so you have more than enough money to live on for the rest of your life, and more assets to pass down. And talk to an estate planning attorney to understand your options for writing a will, setting up a trust, and handling other legal paperwork to protect your assets — and avoid painful family disputes after you’re gone.

Bottom line

If you want to be rich, you might need less money than you think. Jenius Bank’s recent survey found that most Americans have simpler dreams and humbler goals. Just being able to pay off debt, save for a comfortable retirement, and leave some money for your children or other loved ones are all part of a rich life.

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