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It Takes $4.2M Net Worth to Be Considered Wealthy in Silicon Valley [pdf] (aboutschwab.com)
15 points by 11thEarlOfMar 10 months ago | hide | past | web | favorite | 2 comments

My definition of wealthy is being able to afford food, clothing, and housing, as well as some luxuries, without having to work.

And by that definition, you could make it work with $4.2M in the Bay Area, but it depends on your lifestyle.

Even with a median home of $1.7M, assuming you own it, you'll still need $20K/year just for the property taxes. You'll need transportation, which will cost you about $5000/yr because you probably live in the suburbs so you either have a car or two or use a lot of Uber/Lyft. You'll need food, which maybe if you're super frugal you can get down to $200/wk per person, so lets say 2 people, that's another $20K/year. Let's say you use thrift shop clothing and can get away with paying only $500/yr for clothes. So we need about $45K a year after taxes. If you manage to get all your money from long term cap gains, you'll need pretax earnings of about $57,000/yr for subsistence living for two people, which if you can find a nice 5% per year return, you'll need about $1.2M.

So for two people to live a minimal lifestyle in a median home with an amazing investment return that is very tax efficient, you'll need $2.9M.

But most people want more than substance living, can't get that kind of return or tax efficiency, have more people in their family, and want more luxuries.

A million dollars ain't what it used to be:


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