5 signs you're rich, even if it doesn't feel like it

ShutterstockHere’s how to know if you’re doing better financially than the majority of Americans.
  • Many high-earners believe being “rich” is a subjective term – but data suggests there are ways to tell if you’re financially better off than most Americans.
  • If you have little debt, can retire on time, and have large savings, these are signs you are in a better financial state than most.
  • Visit BusinessInsider.com for more stories.

You don’t need to have a lot of money to feel “rich,” according to high-earners.

Many assume being “rich” means being in the top 1% of earners in some of the wealthiest cities in the US, or being able to buy a flashy mansion or spend your life flitting from luxury vacation to luxury vacation.

But rich can also be a state of mind, say high-earners who took a pay cut to follow their passions. Former investment banker Kristin Addis told Business Insider she feels richer earning about 40% of her previous six-figure salary while she travels the world. Nick and Dariece Swift, who also left their jobs to make a fraction of their former income, said they’re happier earning less. The self-made millionaire stars of “West Texas Investor’s Club” say their relationships are more valuable than the money they earn.

While these folks may think “rich” is a subjective term, there are some indicators of wealth that can’t be easily questioned. Here are five ways to know you’re rich:

You don’t carry a lot of debt

If you can carry little to no debt, chances are you might be richer than you think, says a wealth advisor for millionaires. One in four Americans have student loan debt, and household debt reached record highs in 2018.

If you’re one of the lucky ones that can hold on to a portion of money you earn, you have more wealth than most: “Most people fail to realise that in life, it’s not how much money you make. It’s how much money you keep,” writes Robert Kiyosaki in the personal finance classic, “Rich Dad Poor Dad.”

You can live comfortably below your means

Living within your means, or spending less than you earn, might not sound like a big deal if you’re already doing it, but most people are not able to. Just 46% of respondents in a 2015 report released by The Pew Charitable Trusts said they make more than they spend, and only 47% had consistent and predictable household bills and incomes month to month.

If you make more money than you spend on bills, you’re doing better than almost half the country.

A financial planner told Business Insider many millionaires he advises live within their means: “They’re not living below their means by any standard, but they also aren’t purchasing lavish cars and living in oversized houses with Olympic-sized swimming pools.”

You can save easily

Nearly one in five Americans have nothing saved, according to a 2018 Bankrate survey. Lack of a high-paying job, high expenses, and debt are the major culprits for lack of savings, respondents to the survey said.

If you are able to save anything at all, you’re doing better than most Americans.

You’re going to be able to afford to retire as planned

Low savings spells bad news in retirement. A 2019 survey by GoBankingRates found 43% of Americans will retire broke. Respondents said they don’t save for retirement because they do not make enough money, or they struggle to pay bills.

Traditionally, “retirement age” is 65, but that’s changing as more Americans find they’re unable to float 20-plus years of living without a paycheck. Bloomberg reports on data from the US Bureau of Labour Statistics that found nearly 20% of Americans age 65 and older are still working, and points to a finding from the TransAmerica Center for Retirement Studies that finds about half of those still working are motivated by financial issues.

If you can afford to retire when you want to, you are in a better position than many older Americans are.

You aren’t stuck

“What I have realised over time is that in many ways, money spells freedom,” self-made millionaire and NastyGal founder Sophia Amoruso wrote in her book, “#GIRLBOSS.” She continued:

“If you learn to control your finances, you won’t find yourself stuck in jobs, places, or relationships that you hate just because you can’t afford to go elsewhere. … Being in a good spot financially can open up so many doors. Being in a bad spot can slam them in your face.”

Yu Han and Kathleen Elkins contributed to an earlier version of this story.

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