Editor’s note: This article was first published in November 2014. The linked claim that Bill Gates earns 1 million dollars a day without doing anything dates from 2014 or earlier.
Thomas Corley, author of Rich Habits, explained, through his study of more than five years on the daily habits of the rich and the poor, that in his view a person is rich when they meet these two requirements:
- They have a gross income of $160,000 or more.
- Their net liquid assets are worth $3 million or more.
But even with these two requirements, for Corley being rich is more complicated still, because there are many more variables that can make one person rich and another not. And it isn’t just a financial test; it’s a lifestyle test too.
So, to settle the question, Corley shares some variables from his research that, in his opinion, would definitely make you rich.
If you pass these 11 tests, then you are a rich person.
(Also read: A former Goldman Sachs banker explains what being rich really means)
1. You no longer have to work to fund your lifestyle. If you work, it’s because you want to, not because you need to.
2. The income you earn without working exceeds your living expenses. This means the passive income generated by our assets. For example, Bill Gates earns $1 million a day without doing anything.
3. You can afford to take as many holidays as you like during the year. Even if that means a holiday 365 days a year.
4. You can pay for any medical expenses that come up, whether for you, your spouse or any other family member, including the cost of home care and services.
5. You can afford to buy a new car for yourself and your family members without needing a bank loan.
6. Even if you got divorced, neither you nor your family would see your lifestyle change.
7. If you wanted to, you could afford to pay for a good university for all your children and grandchildren without changing your lifestyle.
8. You own your properties outright, whether that’s your family home or your holiday home. In other words, there are no mortgages of any kind.
9. You can cover large unexpected expenses without affecting your lifestyle. In other words, a big emergency fund. (Read: 5 reasons to have an emergency fund)
10. You have no financial restrictions on your activities. You can do whatever you want, whenever you want, regardless of the cost.
11. You have zero debt.
If you meet these 11 requirements, you are truly rich. But above all, focus on point number 2, which is about acquiring assets that generate income greater than our expenses. Ultimately, that point is the only one that can measure the health of your personal finances.
In fact, your financial task in life is to build assets and, every so often, check how much money you are bringing in that way.
With that said, and going by this definition… how many rich people do we have around here? 🙂
Further reading
- How a lack of money cripples your brain when it comes to personal finance
- 12 things millionaires know
Featured image: Mike McBey, CC BY 2.0, via Wikimedia Commons.
.jpg){kind=link}