L.A. insiders, and those of you from other states...is $250k/yr rich? (Simi Valley: real estate, apartment)

[69Charger]

OK here is something that always bugs me. Some people, mainly tax collectors and those in the hood, think that making $250 grand a year makes you rich. Honestly, I don't really think it matters where you live, you're still not rich. Especially in L.A.

Look at it this way, at that salary level, yes you are successful. There is no doubt about it that you are successful. But are you RICH? Absolutely not. You still have a mortgage, and a car payment (a nice car), but that's not rich.

$2.5 million, I would say, is entry level rich.

[disgruntled la native]

250k is never rich, but if you have no dependents it's very, very comfortable. WIth a family you're about upper middle class.

2.5 million a YEAR? You know how few people make that? "Rich" in LA is a high six figures, maybe low seven if you have a big family.

[69Charger]

Not necessarily $2.5/mil a year, but able to sustain that in revenue, or residual, etc.

Can you fly around the world, or buy exotic cars on a whim, @ 800k/yr?

A couple of multi-millionaires I know told me that $5 million is the new "million".

[adr3naline]

It's all about cashflow.

$250k for a single person with no debt and a modest apartment/home, I'd argue Yes, they're rich. Not wealthy, but rich.

$250k for a family of four financing a 3br house, I'd argue No.

But rich is a very subjective term. To me being "rich" is having enough liquid funds to lose your job or make a large purchase and not really care. My household income isn't too far off this number but we have sizable student loan debt and don't yet own property in LA, so I would never consider us "rich."

[BRinSM]

Rich is relative and subjective. Someone who makes $15/hour is definitely going to think someone who pulls down a quarter of million a year is rich. If you one day went from a salary of $30k to $250k you probably would feel rich for at least a little while. Having said that, if you're a family that pulls down down $150k/year in a city like LA and worked for years to get to that point, you probably know that an extra $100k will allow for a house in a nicer neighborhood along with better vacations and a fancier car, but it will not make them to be what I consider rich.

To me, being rich is when you can't outspend your income (within reason). Being rich is when you don't work but your net worth continues to increase. Being rich is when your pay is guaranteed and attached to a golden parachute. Being rich is when you're not a slave to a job, any job. I live comfortably, but I'm in a world of hurt if I lose my job. Therefore, I don't think I'm rich.

[JohnG72]

$250K is high income in LA.

Its rich if its a sustained income basically anywhere outside of urban west and northeast coast.

If you make $250K in say OKC or LV or Florida, even with a family you have tons of dispensible income. If you are marginally frugal youre a multi millionaire in 15-20 years. This is primarily due to housing, state taxes, gas, and lack of expensive entertainment options.

In LA its a good single income anywhere(assuming you are ok with renting) and its still a very good family income in places like Simi Valley, Valencia, and Rancho Cucamounga. Its not at all a high amount for inner circle LA for a family.

[thatguy950]

Net worth vs income

[LoveMeSomeSFVHouses]

I think everyone agrees you're comfortable but not rich.

And 100% on the 5M is the new 1M. That sounds about right to me!

[socal88]

$250K/year is a great income. Dollars may not stretch as far in LA, but it's still in the top 5% or so.

If you're a single person on that salary who doesn't need more than a condo or a small house, you'll have a lot of disposable income to enjoy good restaurants, entertainment, trips, etc.

If you're supporting a family of 4, you'll still be comfortable, but definitely not at that point where you can buy an extra fancy car especially if you have to pay private school tuition.

Ultimately, it depends on your spending habits and what you prioritize. If your goal is to pay a greater share of your income to live in a nice home in a good neighborhood with minimal spending on luxury products and not going to pricey restaurants often, then it's doable.

Assuming someone doesn't have a massive family they're supporting, $250K is plenty to live a comfortable life in LA.

[jm1982]

Originally Posted by 69Charger

OK here is something that always bugs me. Some people, mainly tax collectors and those in the hood, think that making $250 grand a year makes you rich. Honestly, I don't really think it matters where you live, you're still not rich. Especially in L.A.

Look at it this way, at that salary level, yes you are successful. There is no doubt about it that you are successful. But are you RICH? Absolutely not. You still have a mortgage, and a car payment (a nice car), but that's not rich.

$2.5 million, I would say, is entry level rich.

But making $250,000 or more doesn't necessarily one is going to have a mortgage of car payment.
Although I'm sure plenty do .
Thing is it's hard for many to not increase their lifestyle once they make more money .
It's takes discipline.

I agree one isn't rich if they make $250,000 yr and spend it all by the end of the year on lifestyle.

Like some other posters I'd say rich is if you don't have to work and still have money coming in from passive or mostly passive investments to support your lifestyle . Stocks , real estate and other investments .

Some make millions a year and end up broke . Like many NFL players .