A year ago, Wealth Report readers told me how much money it took to be considered “rich” in their town. The answers ranged from a $500,000 income in Manhattan to $1 million to $2 million in total net worth in Kansas City.
The point, of course, is that wealth is relative. Being “rich” depends on where you live.
Now, the folks at U.S. News & World Report have come up with a more scientific process of defining “rich” in various towns. Basically, they used census data to calculate the top 20% of earners and top 5% of earners in 40 metro areas. Then they did some division and multiplying to calculate top-wealth levels for childless couples and families of four (methodology fanatics can click here. Be warned, as readers astutely pointed out to me, the numbers are averages, which can be highly skewed by extreme earners).
Here is how much household income it takes to be in top 5% in the following communities:
Atlanta–Couple (no kids), $268,264. Family of four, $536,528.
Colorado Springs, Colo.–Couple, $207,472. Family, $414,943.
Dallas–Couple, $267,344. Family, $534,688.
Honolulu, Hawaii–Couple, $235,190. Family, $470,380.
Kansas City, Kan.–Couple, $219,300. Family, $438,600.
Las Vegas–Couple, $240,359. Family, $480,718.
Los Angeles–Couple, $315,996. Family, $631,992.
New York–Couple, $359,494. Family, $718,989.
San Francisco–Couple, $359,061. Family, $718,123.
Washington, D.C. –Couple, $347,917. Couple, $490,436.
I don’t doubt the tabulations. But I would bet that people living in these communities with the above incomes don’t feel “rich.” Americans always look up when it comes to wealth. So if you asked someone in Colorado Springs with a household income is $414,943 or more, they probably would think of themselves as upper middle class. And they probably wouldn’t guess they were in the top 5%.
Then again, in the current crisis, maybe those with incomes of $400,000 or more would consider themselves rich.
To read complete article:
http://blogs.wsj.com/wealth/2008/10/15/what-it-takes-to-be-rich-in-your-town-part-2/
