How much money you need to have to be considered ‘rich’

When does a person officially become rich?

We all have our own thoughts and opinions when it comes to wealth, but surely there’s an actual amount that determines a person’s 'rich' status in the UK?

For me, a person becomes rich when they can buy a home outright, furnish it, and live comfortably on their salary.

Others, however, might think you need to be able to purchase a small island to be considered minted.

So, which is it?

Over on Reddit, people were quick to point out what makes a person ‘rich’.

What makes a person rich? (Getty Stock Images)

Speaking of what they think makes someone rich, one user wrote: “Not having to work through choice.”

As another said: “I would add to that ‘being able to spend large amounts of money frivolously without worry.’”

Someone else wrote: “Rich is a different tax bracket. They’re the ones who don’t pay tax. If you’re a PAYE employee it’s highly doubtful you’re rich.”

But according to a survey, it’s a little more than you might expect.

In reality, people are put into three boxes: below average earnings, average earnings, and above average earnings.

The way this is calculated is by comparing your salary to the people living in your area with the same family size as you.

So, if you are a family of four and earn £50,000 per year, you’re in the average to above average earning group, but not the top end of the high earning group as you’re making above 45 percent of the population, which is less than half.

Oddly, if you made the same amount as the salary above but lived alone, you’d be making more than 90 percent of the population. Which would make you rich, no?

If you want to upset yourself, go to The Institute for Fiscal Studies (IFS) website and calculate where you sit on the national average of earnings.

Anyway, according to a survey from Charles Schwab, Americans think you have to have a net worth of $2.3 million to be considered rich, which is insane.

People had different opinions (Getty Stock Images)

But for most of us, it all depends on our personal situations.

Do you have dependents? Is the location you live in affordable or not? Do you have a car, or can you afford to go on holiday?

These are things we typically measure wealth by.

There are ways you can improve your situation, though. For example, you could invest smartly, scrimp and save to set up a business, work with a financial planner to work around tax loopholes, pensions and savings accounts that give you more for your money.