Being rich is a relative concept – what might be considered wealth in one state could be a mere drop in the bucket in another. From the bustling streets of New York to the laidback vibes of Mississippi, the definition of “rich” varies as much as the accents across America. This was an interesting look at some states across the country on how much someone would need to to earn to land in the top 20%, or if you were really raking it in, the top 5% of earners.
Rich vs Wealth
For the sake of this article, the terms “wealthy” and “rich” may be used interchangeably, there’s actually a difference between the two. Being rich typically refers to having a high income or a substantial amount of money. It’s more about the money coming in. On the other hand, being wealthy is about net worth – it means having a proper balance of income, investments, assets, and overall financial stability.
A wealthy person doesn’t necessarily have a super high income, but they have accumulated wealth through savvy money management, smart investments, living below their means, and growing their net worth over time. So while a rich person might earn millions per year, a wealthy person has diligently built up their assets and net worth to achieve long-term financial security. Being rich is more about cash flow, while being wealthy is about establishing a solid financial foundation.
A Look At The Data
In a recent study by GOBankingRates, a personal finance platform, took a deep dive into the income thresholds required to be considered wealthy in each state for 2024. Armed with IRS data, they calculated the earnings needed to rank among the top 20% and top 5% of earners regionally. Buckle up, man, because these numbers might just blow your mind (or your bank account).
North Star State
Let’s start with the Land of 10,000 Lakes: Minnesota. To be part of the top 20% earners club in this northern state, you’ll need to rake in at least $145,571 annually. Not too shabby, eh? But wait, there’s more – the average adjusted gross income for this group is a staggering $250,361. That’s enough to make your neighbors green with envy (and your bank account greener).
But if you really want to live like true Minnesotan royalty, you’ll need to aim for the top 5%. Brace yourselves, because the minimum income requirement for this elite group is a whopping $441,274. That’s more than enough to buy your own slice of the Minnesota Vikings (or at least a really nice pair of fuzzy slippers for those brutal winters).
Neighbor to the East
Now, let’s take a quick trip to Wisconsin, Minnesota’s cheesier neighbor. In the Badger State, you would need $124,665 to be part of the top 20% earners. That’s like trading in a fancy import for a good ol’ American-made pickup truck. But hey, who’s judging? The average income for this group is still a respectable $211,049.
Alright, let’s take a step back and look at the bigger picture. When it comes to the highs and lows of wealth in America, the disparities are as vast as the country itself.
The Midwest
On the other hand, Mississippi sets the bar much lower, with a mere $101,447 needed to be part of the top 20%. That’s practically pocket change compared to the flashier states (but let’s be real, who doesn’t love a good bargain?).
Down south, things start to mellow out a bit. In Tennessee, an income of $115,174 will put you in the top 20%, while in Florida, the threshold is slightly higher at $122,779. These numbers might not seem too outrageous, but remember, you’ll also need to factor in the cost of alligator wrestling lessons (just kidding, sort of).
Out West
Moving out west, the numbers get a bit more eye-watering. In California, you’ll need to earn at least $171,387 to be considered wealthy. But let’s be honest, that’s probably just the down payment on a studio apartment in San Francisco. I remember when I was onboarding at my last job in 2017, I was in a group of new-hires in the Bay Area. I was talking to a woman next to me that would be relocating to California for her role. She said, she’s had a Realtor looking for homes in the price range of around $1.2M. I bet the look on my face was hilarious! I couldn’t believe it. Coming from my Minnesota where the median home price was around $330k.
Northeast
And if you thought that was steep, wait until you hear about the Northeast. In New York, you’ll need $158,336 to join the top 20% earners club. That’s more than enough to buy a lifetime supply of pizza and bagels (but good luck finding affordable housing). And we have New Jersey, (Home of Thrash Metal veterans Overkill) where you need to make at least $180,558 to be considered part of the top 20%. That’s probably because the cost of living in the Garden State is higher than the hairspray budget of a 1980s hair metal band. And, in Connecticut, you’d need to make $602,707 to be in this elite group, the highest among all states. This is due to Connecticut’s concentration of high-income jobs and proximity to New York’s financial industries.
Now, let’s address the elephant in the room: what’s the cutoff for being considered truly, filthy rich? According to the personal finance site SmartAsset, if you have $1 million in liquid assets, you’re considered to have a high net worth. But if you’re aiming for the ultra-high net worth status, you’ll need assets ranging from $5 million to a staggering $30 million or more. Suddenly, your six-figure salary doesn’t seem so impressive, does it?
But hey, don’t let these numbers get you down. At the end of the day, wealth is subjective, and true richness comes from within (or so they say). Just remember, whether you’re living it up in a Minnesota mansion or a Mississippi mobile home, happiness can’t be bought – but a nice pair of fuzzy slippers certainly doesn’t hurt.