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Does A Million Dollars Make You Rich?

A million dollarsIn a world of ever shrinking guaranteed retirement benefits, how much would we really need to feel secure about our long term financial stability. I used to think having a million dollars would make me rich. When your reach that milestone, you get to belong to a new club, the millionaire’s club. Millionaires lead the luxury life we all dream of right? If you were given a million dollars tomorrow, would it make you rich?

Becoming rich by having a million dollars depends on several things.

How Much Debt You Have

Having a million dollars would not have gone very far for us about a decade ago. With a residential and commercial mortgage, business loan, student loans, auto loans, and consumer debt, we were almost $750,000 in the red. A cool million would have paid that off and left us a nice chunk of change to build on, but I wouldn’t have considered us rich.

Will You Ever Earn Any More Money?

If someone gave me a million dollars today, tax free, and I never worked again, lets see what sort of lifestyle that would allow.

I’ll hide it under my mattress because I don’t trust those evil financial planners, and I think the stock market is too scary. I’m almost 40, so let’s say I’m planning on living to age 80. That leaves me a handsome $25,000 a year to live on. For that amount, I could eat lots of rice and beans and maybe have a steak on my birthday if I hit the early bird special at Shoney’s. I’m not feeling very rich.

Investing My Million Dollars

If I ignore the lifestyle inflation that must come along with belonging to the millionaire’s club and continue to work as I do now, I can invest that million dollars. If I can earn 6%, and leave the million there for another 20 years, I would have just over $3.2 million dollars beginning at age 60. You can play with rates of return and amounts of time, but if I don’t go hog wild with my million dollars, I’ll feel pretty rich in 20 years.

Is A Million Dollars Enough?

If I asked most people that I interact with on a daily basis, I think the answer would be that a million dollars is enough to make you rich. The thought of seeing all those zeros in your bank account would be amazing, but the reality is that the money might not get you very far if you don’t use it wisely. It would also be a rare fluke for most of us to get a million dollars given to us as a lump sum, so the point of this post is probably pointless.

Before you berate yourself for going through this whole exercise, I would challenge you that anyone can be a millionaire. Yes, it’s true. You don’t have to be born with a silver spoon in your mouth or win the lottery. Anyone who can invest $508 dollars a month with a 6% return for 40 years will be a millionaire. Obviously, you’ll have to invest more if 40 years doesn’t fit your time frame, but you can’t argue with the math.

Why Most People Will Never Have a Million Dollars

If everyone started investing their $508 a month as soon as they had their first real job, I bet most would never miss it. The problem is that we rack up all kinds of debt before getting that job or we start filling our lives with things we don’t really need when the paychecks start to roll in. It’s hard to catch up if you put it off for “one more year” or “until I get xyz paid off”. What would happen if we fit our lifestyles around what was left over after we made sure we’d be millionaires?

Whether you think a million dollars makes you rich or not, I’m sure most of us would like to attain or surpass that number. Money certainly doesn’t buy happiness, but it does make life lots more comfortable and stress free.

Do you think a million dollars makes you rich? Do you agree that anyone can be a millionaire?



About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. I think around 4% rate on a CD is not too crazy if you have a million to invest, the bank should be happy to give you at least that. So that gives you $40,000 a year without touching your nest egg. Which is enough to live on if your house is paid for, for most people. But it assumes you already have a house and other assets, which makes the scenario more complicated. In Guatemala you do live like a king, paid house or not.

  2. A million dollars = rich? Maybe. Maybe not. I believe it depends on the individual’s desired lifestyle and the amount of income they can generate from passive sources. The more that is generated from passive sources, the less you need in savings/investment accounts. My definition? When you can live your desired lifestyle on passive and portfolio (that may be 1M, 1.5M, 2M) and do not require earned income, that makes you rich.

    • Exactly. It certainly would not make you buy luxury cars and homes rich, but it might let you live a good lifestyle, which would give quality of life.

  3. Interesting. I’m not sure if I would feel rich or not with a cool mil sitting in the bank. I know I’ll find out though. 🙂

  4. I think a million dollars is definitely enough money to be “rich.” Having $1M+ in net worth really opens up options and opportunities for investments and really gives you a big safety net if things go wrong.

    • I sure sounds rich, even if it might not feel that way. I think I’d feel more rich if I had that amount in liquid funds and not tied into real estate.

  5. I think a million dollars would get me to where I feel “secure” and “confident in having options”, but I’m not sure I would use the word “rich”. =)

    • Secure is a great word. I would let it work for me as an investment while I continued to earn money. I don’t think I’d try quite as hard, though.

  6. I always told myself that if I won a million dollars, I would just sit on it for a year. Sure, I would put it into some interest bearing account, but I would take my time and write down what I would like to do with the money. After a year, I would know that my decision would be logical and well-thought out, not an emotial misguided one.

  7. Interesting question. I think I am a little closer to Mrs. Pop in thinking we’d be comfortable and would open up some options, but I don’t know that I’d consider ourselves rich per se. That said, I think for many it is possible to become a millionaire, though I don’t know how probable it is that many will have the commitment to put away that kind of money consistently.

    • I love the PF community. If I asked all my patients in a day if they thought a million dollars is rich, I bet all of them would say yes. I personally don’t think it means riches, and they would all think I’m crazy. I love that you guys would use it as a stepping stone.

  8. Great post, Kim. I totally agree that anyone can become a millionaire, but like you pointed out, whether or not that million would make them rich depends largely on their lifestyle and debt load. If we were debt free right now, 1 million would leave us just as tight as we are now, so I wouldn’t call that being rich. But for an extreme minimalist, that would hook them up pretty well.

  9. $1M is decidedly not rich. I think if you can afford to live on $40k per year comfortably, you’re still a good long ways away from rich….which answers your 2nd question: I think $1M will well within the reach of most people if they set their mind to it.

    So, if you could make the check out to “Joe,” I’d love a million anytime someone offers!

  10. Numbers like this are always relative. It depends on your needs, your wants, your dreams, what you do with the money, etc. If you can use the $1M to do what you want with your life, then yes it makes you rich. If not then you’ve still got work to do. It’s certainly not a magic number that actually inherently means anything.

    • It is all relative, but it’s fun to think about. I don’t think there is a magic number. It’s when you are living the life you described.

  11. I don’t think a million dollars necessarily equates to being rich. I do definitely believe that anyone can save a million dollars over the course of the year. For me, I could probably live on 25k a year but I wouldn’t feel rich.

    • I could live on that amount if everything was paid off, but I certainly would not feel rich. Now if I could keep my million in investments and keep earning enough to live, I’d be set.

  12. I’d like to have that million dollars, but for some reason I don’t think that would make me feel rich, More secure? Yes. But not rich. Call me crazy for wanting more…right now and in the future.

    • A million in LA wouldn’t go as far as a million in rural Colorado, but I think I’d still keep earning if some handed me a million tomorrow. I would only see nice patients, though. Mean ones could go somewhere else.

  13. Living in NYC, where a house in a decent neighborhood is over 1/2 a million, one million doesn’t sound “rich.” But it still is a whole heck of a lot of money. It still feels like a lot of me because I don’t need to spend that much. Though I’m not sure I could quit my job and continue living in NYC, but I can do a lot of things that I can’t do right now.

  14. Sadly, I think if most people were given a million dollars, it wouldn’t last them a year. A million isn’t what it used to be and after they bought a new home and a couple of new cars, took a vacation or two and bought a few other toys, it would be gone. If someone handed me a million dollars (thanks), it would definitely make me feel more secure. Although I always consider “rich” to be more determined by how you use your money, than by how much you have. I’ve worked with “rich” people who were very miserable and felt “poor” and with people who had very little but felt “rich”.

  15. I wouldn’t consider myself rich with one million, but it would allow me to try some new things and see where it goes. It is all about the opportunities.

  16. One million bucks would make you rich if you lived a sensible and frugal lifestyle before you hit it rich, as you’re going to be MUCH more likely to continue that lifestyle afterwards. On the flip-side, people that rack up debt and don’t save will burn through a million faster than you can say “MC Hammer”.

    • I was waiting to see if anyone would mention professional athletes and how broke most of them become after their glory days. I guess MC Hammer fits right in with that, although I guess he found God, so he might feel rich anyway.

  17. I think a million is in reach for most, but certainly not easy for everybody. Depending on your income and expenses you’ll get there more or less quickly.

    A million would certainly come in handy and ease the pressure, but it’s probably not enough to call yourself rich unless you really live a minimalist life. I could make it work, but I think I’d keep working and saving.

    • It also depends on when you get to a million. If I’m old, it would go much further. Right now, I’d keep on earning money at least until all my debts were paid off.

  18. A million would not make us rich right now, but it would certainly place us more firmly on the path we want to be on. (I’d use it to pay off all debt, buy the second house we want, and then use what’s left to fix up the current house to become a rental property.)
    Though not having to pay a mortgage might make me feel rich, since that’s a lot of extra money we get discretion over each month.

  19. Unfortunately, a million bucks can’t buy all that much, especially in New York City. You can’t even get a decent one bedroom for less than $500,000. Maybe I’d move to small house with low property taxes and invest the rest.

  20. Redundant question for someone on food stamps.

    • Thanks for your comment, but I would have to disagree. If you are looking at financial blogs, you are likely thinking of ways to improve your financial situation. I think dreaming big is a huge part of changing that situation if you are not happy with it. Thinking of a million dollars tomorrow is probably not the best idea, but you have to start with some sort of small goal and build up from there. There are tons of ways to earn an extra $500 a month, which is what you’d need to invest over a 30 year career to have a million dollars. Too many people have done it to think it’s impossible.

  21. “…get a million dollars given to us as a lump sum, so the point of this post is probably pointless.” Don’t beat yourself up too much here. This happens more than we think, through inheritance especially. I don’t know if a million dollars makes one rich, but it sure is a lot of wealth compared to what most people have. I agree that it would make life more comfortable to live and open up many investment and lifestyle options.

  22. Having enough assets to support your lifestyle in retirement or even before is a moving target. It starts with how much you need to live. I have enough to retire very well, but if I wait just i more year, I will have a pension and lifetime medical. If I wait just 3 more years, I will have an additional monthly income from Social Security. My theory is I will let my pension and Social Security cove rmy needs and use my retirement savings,brokerage accounts and additional earnings to satisfy my wants.

  23. Hi Kim,
    It seems like a $1 million dollars is a nice round number, however it doesn’t make you rich. Generating $40,000 a year espcially pre tax is not much if raisng a family. In some areas that could be considred poverty level for a family of four. You are right when you said most people will never have that many assets.

  24. I think everyone could be a millionaire if they worked hard enough at it. Unfortunately, most don’t want to do the work. This is why there is such hype around the lottery when it hits $100 million or more. Everyone wants to strike it rich, not realizing that 90% of those that strike it rich end up broke.

  25. After spending some time in financial services, I come at this from a different angle. What is considered rich will always change with the times. But I want to create a financial situation where the passive style incomes pay for my lifestyle. At that point I will consider myself rich.

  26. Having the residual income from a million dollars would make a nice supplement to a regular income. While it might not be enough to make you financially independent, it certainly could make life in general easier. You might be able to work a 4 day week instead of the usual 5. Take a vacation to Italy or take two weeks of vacation instead of one. Not be too worried that the car might need an expensive repair. If you learned to live off of your “regular” job and used the million dollar investment as a layer of security with the occasional added perk, it could make a difference in the quality of life. Just don’t spend more than the income each year and the million dollars will last for a lifetime.

  27. The word “million” can be pretty impressive but realistically it’s not really enough to make someone rich. Especially if that person needs to pay off a lot of debt. It can however make for a good start. If that 1 million is invested properly and it worked to the person’s advantage then well and good.

  28. Time and again ordinary folks have demonstrated that becoming a millionaire is possible. With a bit of hardwork and lots of financial discipline its possible, and on the latter is where most folks lose track…maintaining the discipline to save through thick and thin, invest wisely without fear or greed clouding their judgement and the patience to see it all come together.
    A million dollars would make me feel quite rich, because, well, i wouldn’t touch it…just invest the whole amount, continue working as hard and hopefully living a frugal life 🙂

    • I might take a nice trip, but I think I’d do the same. I might not work as hard, but work might not seem hard because I would not need to depend on paychecks as much.

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