- Financial experts told Mercury News that some families need up to a $US10 million net worth to be financially comfortable living in Silicon Valley.
- Bay Area residents themselves say it takes a $US4.2 million net worth to be wealthy, according to a 2017 Charles Schwab survey.
- Visit BusinessInsider.com for more stories.
In a place as expensive to live as Silicon Valley, it’s harder than ever to tell who’s truly wealthy.
Bay Area residents themselves say it takes a $US4.2 million net worth, on average, to feel wealthy and $US1.1 million to be “financially comfortable,” according to a 2017 Charles Schwab survey.
Some financial experts peg those figures even higher.
Helen Dietz, a certified financial planner and the director of wealth management for Aspiriant, told Mercury News that a family may need an annual income of up to $US1 million – so, a much larger net worth – if their financial priorities include sending their kids to a top school, living in a larger home, buying a new car, and saving for retirement. That number only increases when goals such as travel or funding a future inheritance are accounted for.
Steven Jon Kaplan, investment advisor and CEO of True Contrarian Investments, told Mercury News’Leonardo Castañeda that it takes closer to a $US10 million net worth to be financially comfortable. That’s “a reasonable, but certainly not a lavish lifestyle” in the Bay Area, he later told Business Insider.
“Many people assume they will be able to keep working indefinitely until they are 90 or 100 years old but in real life that rarely happens,” Kaplan told Business Insider. “Eventually people have to stop working and live off their accumulated investments, so unless they are getting a generous government or other pension this means that they have to generate enough income from savings.”
By the Pew Research Center’s definition, Americans earning twice the median household income or more in their city are considered upper income. In San Francisco, that’s annual earnings above $US203,428, according to US Census data.
In that vein, there’s good news ahead for Silicon Valley folk. The area is on the brink of millionaire mania, TheNew York Times’ Nellie Bowles reported. Several tech startups have gone public this year, or are gearing up to, and the cash infusion to employees and early investors will turn thousands of people into millionaires virtually overnight. Large salaries thereafter will only bolster massive bank accounts.
How much could your savings grow? Find out with this calculator from our partners:
Business Insider Emails & Alerts
Site highlights each day to your inbox.