Predicting When You’ll Feel Rich and Ways To Guarantee That You’ll Never Feel Rich

You want to get rich. Everyone does. It’s just taboo to say so. No one wakes up and says “Hey I want to be as average as possible”. On this side of the web wanting to get rich and admitting so is encouraged (maybe you’re rich already)! Now that we have people visiting from all over the USA, we think it’s time to predict exactly when you’ll wake up and say “Well. Looks like I’m officially Rich!” from a purely financial perspective.

Feeling Temporarily Rich

One Time Windfalls: Almost everyone will feel temporarily rich several times in their lives, we think this is primarily due to one-time windfalls of income. Maybe you got your very first investment banking analyst bonus check, maybe you just closed your first $1M+ property sale and maybe you were gambling for fun at Vegas and won $10,000. Either way… you’re going to feel rich temporarily. From what we have seen, most people will feel temporarily rich when they receive a one-time windfall that pays for approximately one month worth of living expenses.

Large Currency Exchange Gain: If you spend some time traveling at some point in your life you’re going to visit a specific location that you enjoy. It could be Russia for the nightlife or it could be Brazil for the beaches and happy go lucky people. Either way, if you enjoy your first visit imagine what happens if you return to find that your currency has appreciated by some 20-100%! We’re using a wide range but the numbers are not out of the realm of possibilities. Going back to a place you enjoyed and seeing the cost plummet will make you feel temporarily rich for the month or so you spend in that location. For those in the United States, the recent currency moves over the past 2-3 years should have everyone feeling a lot richer.

Feeling Rich Based on Income and Passive Income

Basic Calculation – Relative Wealth: At this point in time. If you’re making $50K a year you’re in the top 1% worldwide (top 0.31% to be exact according to the global rich list). So congratulations on being in the 1% already. The problem is that you won’t feel rich because your environment is not Subsaharan Africa or Thailand, you’re living in the greatest country on earth: the United States. Here? $50K is approximately equal to the median household income so you’re smack dab in the middle. You’re unlikely going to feel rich due to your environment… take a look at the chart below for more details (2013 data).

Median Income

As you can see, the median income and average income varies across the country. This will be a major determinant in feeling “rich” or not. Importantly, we also raise the bar a bit more and say that you must look at the Average income. The reasoning is pretty clear, the median is going to be lower than the average. There is a floor to earning ($0) and there is no cap (if Warren Buffet walks into a room of 50 people, the average net worth is significantly higher than the median). In that scenario, the average should be to the right of the median on the bell curve. The basic calculation to feel rich from what we have seen? ~2-3x Average Income

Location Scenario – Relative Location: It gets more complicated. Lets say you’re living in a major city and absolutely loathe it. Well even if you make 3x the average income… you’re not going to feel rich! There are a lot of unhappy people making a ton of money living in a place they absolutely hate. This is a big problem because it says that being rich could require more income if you’re forced to live in a city you don’t like at all. This is a bigger balancing act and from what we’ve seen it takes another full multiple to feel rich (locked into a city you don’t like). The calculation to feel rich in a place you dislike? ~4x Average Income

Now the plus side is that you may be able to reduce the necessary income to feel rich if you absolutely love the city you’re in! Generally speaking, if you spent the last two years traveling the world and found a place you love, you’ll need less money to feel rich. Psychologically it is quite difficult to give up money (any money addict will agree) so the multiple isn’t quite a full turn but somewhere around half a turn. If you find a city you love you’ll feel rich with ~1.5-2.5x average income.

Feeling Rich Forever – Passive Income: The main premise in feeling rich forever is that it is relative to your passive income (not semi-passive income). A well run business or a high paying career could go away tomorrow. Sure this is less likely with a business. But. The potential for it to go to zero is still there. This is why “feeling rich forever” is relative to your inactive income. If you receive $10M tomorrow, you’ll feel rich forever due to the passive income generated by the money.   The simple calculation = 1.5x your annual spending in passive income.

Feeling Broke Forever

The calculations to feel rich are pretty straight forward. The problem is that life is complex and there are many “curveballs” that will prevent you from ever feeling rich. Most of these curveballs are psychological where people become addicted to status items or beating everyone else in the race to the “highest net worth” game.

The Constant Comparison Game: No matter what, you’re not going to be the richest person in the world. Constantly changing the people you “compare yourself with” will lead to nothing but unhappiness. If you live in a major city it is practically impossible to become the richest man there and if you do succeed in that… you’re going to become famous which involves another whole host of problems. Importantly, getting relatively rich is the name of the game over here. Trying to become the richest man in the world usually leads to a life of constant work and stress. Figure out how much money you’ll need to live a life you enjoy, multiply this number by ~30 and put the blinders on. Trying to beat the guy who owns 1,000 income producing real estate assets is not going to make your life any easier!

Ignoring the Full Picture: The second easiest way to feel broke forever is to ignore the fact that life is a mosaic. Would you take an extra $1M in order to be overweight for the rest of your life? Would you trade $1M for a personality that leans to pure risk aversion (See no fun life experiences). Would you hand someone half of your net worth to be five inches taller and more muscular (we sure hope not). In short, ignoring the full picture makes most people envious. They see one piece of a person’s life and ignore the rest that they wouldn’t touch with a 10 foot pole. Instead, recognize that a person can be successful in one category while unsuccessful in many other categories… ask for advice on the piece that they are good at (ignore the others).

Earning Income You Hate: When you start with nothing, there is absolutely no way you’re going to enjoy everything you do. You’ll be forced to do dirty work to succeed even if you think it is “below you”. There is no choice. However, once you have a large war chest of cash, you can become much more selective in your income streams. Working in a position you loathe just to earn more money does not make sense if you don’t need the additional income. If your passive income already covers all of your living costs with a large buffer as well, doing things you hate will ensure that you’ll never feel rich.

Giving Up Your Freedom: This is a very common mistake. Once someone feels rich they load up on items that cause recurring costs. Huge recurring costs include stretch mortgages, car payments and addictions to status goods. Feel free to buy a few high end items just avoid that ones that kill your cash flow. Cash flow is significantly more valuable that one-time charges because the one-time costs can be avoided in year two but a recurring payment can last up to 30 years.

Not Valuing Your Time: This one catches a lot of people by surprise, if you’re already well off financially does it make sense to put off things that *can’t* be done when your older? It really does not make sense. Spending late nights working on a project you enjoy makes a lot of sense. Spending late nights working on a project you loathe when you could be attending a once in a decade event does not. If you have the means to do as you please, don’t wake up in 3-5 years and say “I wish a did XYZ”. There are no second chances when it comes to time (money can be made and lost rapidly).

Concluding Remarks: Everyone will feel temporarily rich at least a few times in their lives, in order to feel rich we estimate the following 1) you’ll need 2-3x the average income in your city, 2) 4x if you’re in a city you dislike, 3) 1.5-2.5x if you love the city you live in and 4) if your 100% passive income gets to 1.5x your annual expenses you’ll feel rich *forever*. Now if you’re interested in feeling broke forever we can recommend: 1) comparing yourself to everyone, 2) only looking at one trait of every single person, 3) continuing to work in positions you loathe, 4) giving up your freedom with heavy debt load items or recurring payments and 5) choosing money over life experiences when you no longer need it! Hopefully everyone got a good laugh out of the last five items, however, if you walk around this week see how many people fall victim to these psychological facts (there are many especially in high paying professions!).


  1. ABC says

    I have identified some mundane hacks that make me temporarily feel rich. Or it might be more accurate to say I’ve identified little things that make me feel poor & purchase their opposite.

    Some are little things, like always having glass-bottled water in my fridge or always having a super clean car interior.

    Everyone can probably think of some relatively inexpensive luxuries that make them feel like a million bucks.

    It sounds silly & petty, but these are great ways to reward ourselves for working hard & keeping momentum going.

    • Wall Street Playboys says

      Interesting hack, if you’ve got a busy schedule and really feel rich by having a clean car for example you’ll probably obtain a lot of “utility” by hiring a cleaning service on a monthly basis. So long as it doesn’t hurt the passive income stream of course!

    • says

      People are also willing to splurge extra on these little luxuries where they wouldn’t otherwise.

      (i.e. upgrading to a premium ice cream cone).

      Lots of money to be made!

  2. Passive Income for Freedom says

    The 1.5x in passive income seems to compare pretty well with an older post where I think the math was something around 4x annual rent expense is when you start to feel rich, since most people use about 33% of their income on rent. That gives you a number that is pretty darn close to that 1.5 number or about 1.33x and if we look at it more closely it means that living in expensive cities requires an even higher net worth since the yields are usually lower. I think the cities with the highest median incomes are going to have rental yields that are much lower so if you’re happy in a city towards the top or even the middle of the chart, the amount you need is significantly reduced!

  3. says

    Being location independent makes me feel rich. That’s FEEL, mind you. I don’t actually want to go anywhere cus it would take time away from working.

  4. says

    You mentioned Brazil’s example of foreign exchange gain. Nothing more real than that. USD/BRL on Aug 1’11 1.58. USD/BRL on Sep 1’15 4.05. Impressive the number of foreigners who have become millionaires in Brazil without making any effort. During this period, chinese, americans and europeans invaded the noble real estate market of Sao Paulo. The retired foreigners of Rio saw their buying power quadruple in 4 years. A gorgeous bonus in the final stretch of life.

    • chriogenix says

      the same thing happened in Colombia going from 1,800 COP to 1 USD up to around 3,000 COP to 1 USD. flip side is your property/investments are worth less dollars so there’s a trade off but there has been quite a bit of appreciation in select markets at least in Colombia, not sure about Brazil. Many wealthy South americans who got their money into dollars/euro have seen tremendous growth of their capital(ie 4:1 just on base capital, not including returns), most notably the Santo Domigos who got out of some Colombian investments and into dollar denominated assets. its been a wild ride. There’s a lot of great cities to live in in Latin America, definitely something to look into if you have passive income or are location independent

  5. Jacob says

    Ideal Man According to WSPs

    · Often is introverted/hardworking/has few friends when in early 20s (because he’s working)
    · Has a laundry list of contacts that are spoken to on occasion, and group of work related contacts spoken to regularly in order to build income
    · Frustrated in 20s because so far from ideal self and works 14 hour days in first job (this is pretty extreme, can’t say I’ve done this)
    · Doesn’t believe in serious relationships, knows marriage is a scam
    · Spends multiples of average local income to bang hotter women, understands that the hotness of girl he gets scales upwards with the spend multiplier (this is so true) and splitting the tab with a 9 is suicide
    · Has a healthy diet and exercise regimen (mandatory!)
    · Doesn’t hold a grudge against family members, appreciates that they gave him a shot
    · Is in Sales/Wallstreet/or Tech position with equity in company
    · Doesn’t compare himself to others, only himself (for the sake of happiness)
    · Lives in a city he likes where he can leverage his income/wealth (no San Francisco, worst place on earth)
    · Earns at least 2x local average income, doesn’t think moving to a 3rd world country where he can afford it because it’s cheaper is an appealing idea or an accomplishent
    · Doesn’t do work he doesn’t enjoy when financially independent, is willing to do work he hates when first starting out
    · Understands he needs to get jacked/ripped and take himself less seriously/not judge people if he is Asian/Indian
    · Understands that spending $10M between age 20-40 is better than $100 at age 60-80 because you can’t enjoy it as much when you are older, time value of money, etc.
    · Understands that nobody wants to see him surpass them
    – Is not boring, knows a performing art
    – Can speak multiple languages
    – Has saved $1M at age 30 at a minimum​
    – Has 1.5x yearly expenses in yearly passive income (feels rich)
    – Is an athlete/can squat 2x weight/easily bench weight/run and in top 10% of health
    – Doesn’t spend a lot of time socializing or meeting women but is still successful in these areas, doesn’t burn bridges, very long term close friends
    – Understands that women aren’t as interested in younger men, and that dating becomes easier in late 20s

  6. A says

    Fly to Thailand. Stay in 5 star hotel for $100 a night.

    Bam. Lower middle class taking a rich person’s vacation.

    • Wall Street Playboys says

      That is definitely a good option for guys that are in their 20s. They can work extremely hard then take a expensive vacation to low cost areas. Once they do they tend to see they are making the right decisions.

      • A says

        I did it. I am/was 24 and went for 2 weeks. Gives you appreciation of what life might be like in a few more years of hard work.

      • Wall Street Playboys says

        Good stuff! Smart, most people go for a month and say “ahh I can quit my career today!” Missing the bigger picture of being able to live a great life *forever* once they make it which is a lot closer than they think!

  7. Brian says

    I thought the New york city area would require a lot more than 109k. Areas like washington dc, san francisco, san jose, and seattle seems to be pretty ridiculous with those numbers.

  8. Hans says

    Hi, I am a subscriber, but I don’t receive any emails when you posted something new. Is that normal or did something not work with the subscription?

      • JJ says

        Pre tax is for people comparing salaries/wages where personal tax circumstances skew the results. If you’re comparing to yourself, of course it’s only what you’re left with that matters.

        Excellent article guys. Especially the point that living in a place you don’t like requires more money to feel rich. The tragedy of course is that a middle class job will lock you into a city and never pay you enough to make you like it if you don’t already.

  9. Kitty says

    Easiest way to feel rich.
    Starve from sunrise to sunset.
    When you eat plain bread at sunset you will feel rich beyond imagination.

  10. Shut Up Macklemore says

    I have come to find over the years how tough it can be to have fun, keep a level head, and succeed in a career, at times even impossible. For instance, you guys recommended Investment Banking as a career but we’re talking working 80+ hours a week in your 20s. You also recommended working in Silicon Valley as a high paying career but the quality of women there, well I will just reference your post about NYC vs San Fran in that regard.

    One thing that gets me and I think a majority of guys in their 20s is that end picture, it really does, and I guess it’s because we hear countless stories from losers in their 30s but hardly any from winners. Here we are grinding, working hard, and building that good future for ourselves but at the same time wondering if in our 30s it will be too late. This type of stuff makes a lot of guys snap and just pop, go from seeing the big picture to just living in the moment. I think this is single-handedly the biggest cause of FOMO.

    We see so many people around our age group out, having fun, hooking up, partying, sleeping around, and “experiencing life” as we grind those 70+ hrs a week. Then here some of us are wondering if by the time we make it into our 30s, if we will really have those same opportunities or if we will just feel like a huge misfit like that old guy at a party.

    Even with dating and women, knowing that yes you can get hot girls in your 30s but at the same time realizin that some frat boy in college or some young douche in a club got for free.

    Or with social life, if we will ever be able to make friends the same way given that we will lose so many of our fellow men to marriage.

    I guess at this point all we can do is grind, make that money, and hope that we can have that fun but also share that story….

    Or that might just be selling motivation to everyone!

    • Wall Street Playboys says

      The notion that being a frat guy is a good thing is beyond comical. We have no idea what world everyone lives in, at 30 with a million bucks in your pocket… there is no competition. You’re in the top 0.01% unless you got aspergers or something…

      • Jay says

        I think it is a good topic to address, which is when should you transition from purely making money to going out on dates based on your location or perhaps moving locations as well. For example, I would imagine San Francisco would have a higher age transition period just because the quality of women there are inferior to that of New York. Some things to think about.

      • Wall Street Playboys says

        Not sure what you mean… if you have a million bucks, are in shape and 30 or so… you can do whatever you want. Location isn’t relevant you just move.

        If in shape and rich and around 30 + asking for “advice”… well probably some sort of personality disorder. If you were going out here and there in your 20s your “game” is good enough.

        Now you know why we stopped posting about such topics and don’t care. Many people reach this by 25!

      • quantsandbottles says

        Actually have Aspergers. No point in complaining about it though. Going to leverage my talent in numerics to break into a quant hedge fund, and eventually start one myself. Meanwhile working on social skills/game like a mofo whenever I have the chance. Already starting to get laid (though very inconsistently). Maintaining health and looking good/dressing well are actually slightly easier due to my attention to detail. That being said at what point should I zone in on my strengths instead of my weaknesses? Just don’t want to end up as a socially inept millionaire

      • Wall Street Playboys says

        Get into a quant hedge fund first and spend your free time working on your social skills. The fact that you have a medical disorder and don’t even have a problem with trying to fight against it means you’ll figure it out. Depending on how severe it is you may have to dedicate more than the 1-2x a week we recommend and go out a tad more to avoid developing any issues.

        Based on your comment though it seems like you’re going to be fine!

  11. FormerlyNY says

    I strongly agree with the part about cities and location, it has a massive impact on your happiness and just the quality of life you have. It gets me that not enough people across the web talk about this sort of stuff but it is one of the main things that contributes to happiness in life from my experience. I envy the man who had the chance to grow up in a city he was a good fit for.

    The one part it has a big impact on, from what I have experienced, is dating and women. I don’t mean moving to a third world city but just a city within a country.

    A while back I moved from NYC to Miami and in regards to women, it was the best decision I made in my life. In NYC I had to fight for a 7 and it seemed like unless you were in some very exclusive places, it was a city of 6s and 7s. The women I met there were the most narcissistic of women anywhere in the country, total ice queens with huge sociopathic tendencies. If it was not for European women staying in the city, the dating scene there would absolutely suck.

    Not sure what it is with American women in NYC but they do tend to embody some of the worst traits of western women.

    Moved to Miami, the quality of women I was hooking up with went way through the roof and the opportunities were endless. Unfortunately, the job opportunities in Florida aren’t all that great even though the women are some of the best looking in the country.

  12. Jay says

    I like how you said “stretch mortgages” because it represents the objective reality of owning a home. There’s one extreme that favors “homeownership” a lot (i.e. Asian parents and middle class) by saying things like “Well after 30 years you’ll at least have a house!” “Oh my god, you’re missing out on the tax deductions!” And then there’s the other extreme that favors renting all the way (i.e. young men bad at math giving out financial advice to even more clueless young men) saying you always need the “flexibility”. Fact of the matter is that any purchase outside the ‘minimum viable housing’ (which I’d personally describe as a studio for a single young male, 1 bed for a childless couple, 2 bed for a family) is going to be a “stretch”. A stretch means a guaranteed loss in savings and thus future income.

    It doesn’t matter if you’re paying high mortgages and thinking the higher value house is worth it, it isn’t worth jack shit if it isn’t making you more money and keeping you enslaved. And renting more than needed when you’re not financially independent is also keeping you enslaved. That’s the reality, if you’re stretching and worrying about renting or buying, you’re worrying about the wrong thing.

    • mate says

      What would you advice for the extremely expensive cities like Hong Kong or London?
      (Background: single guy fresh grad optional to live with family.)

  13. Kwasi says

    You guys should do a post on expat life. I think it is a smart idea if you are making the move to find more investments and while simultaneously being aware of how the dollar would give you more buying power. I’m only mentioning it because an earlier comment seemed to be against it. (Ideal Man scenario). I have friends who take advantage of having 2 passports (the second of course in a country where the Dollar has a lot of buying power). They have managed to milk living in both places for their financial benefit.

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