Just how rich is rich, really?
We all have our own idea of how much money it would take to fulfill our financial fantasies. Some say they want to be 'comfortable.' Me, I'd like to be rich.

By MP Dunleavey

Editor's note: Columnist MP Dunleavey and six other women have come together online to strip away the myths surrounding money, speak frankly about their finances and liberate themselves from debt. Follow the quest for financial fabulousness of these "Women in Red" every other Monday in Dunleavey's column on MSN Money.

Do you want to be rich? I want to be rich. At least I thought I wanted to be rich. But what is rich, exactly?

Not everyone attaches a dollar amount to that word, and not everyone uses the R word to describe the life they want, as I discovered when I asked the Women in Red that question.

But we all have vague, beautiful ideas billowing through our heads:

Carole: "I want to own a home in New York City; I want security, stability. I want the flexibility to be able to do what I want."

Lyndsey: "Being rich means not living paycheck to paycheck. I'd like to own a nice house, a nice car -- to help out my parents and my brother, if they needed it."

Beth: "My idea of rich would be to pay any bill I get the instant I get it. To quit my current job and maybe find one that inspires me each day. To travel wherever and whenever I want. To ensure my extended family is financially secure. So maybe just being comfortable is enough for me."
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Wealthy vs. comfortable
I can't tell whether my financial comrades think it would be tacky or unrealistic (or both) to just admit that -- hell, yeah! -- they'd like to be rich. Or whether they value stability and "being comfortable" more than wealth.

See, I like the idea of being comfortable. But the more I consider what it would cost to be comfortable, I think I'm actually aiming for rich. Not only is my personal definition of "rich" at a crossroads right now, like most Americans I find that the golden threshold keeps moving farther and farther out of reach.

A 2003 Gallup poll found that although only 2% of Americans describe themselves as rich, 31% said they thought it was very or somewhat likely they would be rich one day. That number jumped to 51% for 18 to 29-year-olds -- and plunged to a sobering 8% for Americans 65 and older.

According to Gallup, the public's median definition of "rich" was an income of $120,000 -- or assets of $1 million. We asked the same question of money-savvy MSN Money readers, and a majority of the more than 11,000 who responded felt that they would need at least $5 million to consider themselves rich.

How rich is rich?
As Dr. Evil would say in his most evil voice, for some people "one MILLION dollars" wouldn't even buy the R in rich. For others, it might be a small fortune.

That's because what constitutes wealth is not only subjective, but confusing.

Take Brice. She was the only one in the group who admitted to a specific desire for gobs of money (besides yours truly). She wants to be capital-R rrrrrrrrrich -- and she was also the only one with a target amount in mind.


Brice would like to own a couple of houses ("and be able to afford the mortgages comfortably"), a couple of cars, be able to "take great trips" and pay for her children's education. And shop without fear or guilt.

How much would that take? "Millions," she said emphatically. "At least $10 million to $20 million."

In the eye of the beholder
My stars. It had never occurred to me to want $10 million.

Brice's estimate may be way beyond what most Americans would call rich, but there's an amazing variation in dollar amounts that people attach to that four-letter word.

* Those who earned less than $30,000 thought that a household income of $74,000 would qualify as rich.

* Those who made $30,000 to $50,000 said an income of $100,000 would be rich.

* And people in the top half of earners were more likely to say that an income of $200,000 earns you the right to the R word.

So the less money you have, the less money you think you'll need to become rich. And the wealthier you are, I suspect, the more money it takes to make you feel rich.

How to define wealth
In short, how you -- and I mean you, personally -- determine what constitutes wealth depends on your expectations.

A million bucks, wisely invested, will yield an income of about $40,000 a year, if you follow the financial planning rule of thumb that says you can only draw income equal to 4% of your assets (a must if you're not working and want to be sure your money lasts as long as you do). That's comfortable, but hardly rich.

Carole started out saying she really didn't want to be rich. But when I pressed her to clarify what her desired not-really-rich lifestyle would look like, she ticked off the following:

* A two-bedroom home in downtown Manhattan.
* A car (and a garage to go with it).
* Between $200,000 and $500,000 in savings.
* $500,000 in her retirement accounts (which is about 10x what she has now).
* A couple of getaways per year.

"So although I just said I don't want to be rich -- that's a couple of million right there," she said, quite surprised.

Other versions of rich
Before you all start sending me angry mail about how unrealistic the New York lifestyle is, let’s turn to Beth, who lives in Oregon.

She and her husband are squeezing every penny, trying to save enough for both their daughter's college education and their own retirement -- on a joint income of about $92,000.

They are crossing their fingers that they'll be able to swing a one-week trip to California this year.

In order for Beth to be "comfortable" -- i.e. quit her job for a more inspiring one, be able to provide for her family and "travel wherever and whenever" she wants -- she and her husband would need a lot more cash coming in. How much would it cost to have both freedom and family security? Perhaps another $50,000 per year, perhaps more.

Stephanie, 27, a newcomer to the Women in Red who lives in Chicago, has a combined income with her husband of about $69,000. Like Beth, she doesn't want to be rich, but comfortable. She estimates that amount would be about $180,000 a year, almost triple her current income

Right now, she and her husband live in a modest apartment and pay $850 per month in rent. Someday, they'd like to have kids, and Stephanie admits to having a secret fantasy of being able to buy one of the lovely, million-dollar houses she sees for sale in her neighborhood.

Let's say they saved their money, made a modest down payment of 10% ($100,000), and took out a 30-year mortgage at 7%. Their monthly payments would be about $7,000, including property taxes. Even on a $180K income, which sounds mighty plush, they couldn't afford that.

Can anyone afford to be rich?
My point is -- and this is why my own definition of rich is at a crossroads -- that it's damned hard to afford the ordinary things in an ordinary life. Forget anything near what most people envision as rich!

If you dream of luxurious vacation homes, retiring early or sailing the south Pacific in your yacht, remember that it takes more money than you'd think to be rich. Paying your yacht staff, berthing fees -- not to mention the cute little nautical outfits -- phew! Imagine what that would add up to.

Edward Wolff, a professor of economics at NYU who studies wealth, points out that even the people we think of as being "rich and famous" -- i.e. movie, rock and sports stars -- may not be as rich as you think.

"These are people with big incomes, but that doesn't necessarily translate to big wealth," he says. "Just getting it is half the battle -- then you have to maintain it, and that takes a continuous flow of big income."

What does it take?
About half of the very rich have inherited their wealth, Wolff says. "The rest of the super-rich tend to be business owners or have an (ownership) stake in their work."

Now, you don't have to be among the Forbes 400 to be wealthy (you'd need $600 million just to hit the bottom of the list). But you do need to ask yourself some hard questions:

* Even if you just want to be "comfortable," does your vision of that include some things that go well beyond mere comfort?

* If you want to be rich, what does that look like? What kinds of decisions (about your career, for example) or sacrifices would you have to make to get there?

* If you're not aiming for rich, could you be happy with what you have instead of living a life of fruitless self-torture because you're not?

* Or, will this be the moment when you face the fact, as I am, that what you do for a living will never make you rich (nor will your parents). And thus, will you decide to switch gears?

These are big questions, but they're essential. At some point in this crazy world, you have to level with yourself about who you are, what kind of life you want, what will make you content. Are you on the path to great wealth? Or have you achieved what millions of others might consider -- what you yourself might want to consider -- a very wealthy life indeed?

Rich, after all, is relative -- as the folks at Poke, a creative agency in London, want to remind us. They created something called the Global Rich List.

Based on World Bank data, this little calculator tells you how rich you are compared to the rest of the world. By their estimate, I'm in the top 0.7% of the world's wealthiest individuals. Now that's rich.