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?


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Written By
Sydney White is a Texas-born stay at home mom who enjoys spending time with her family, bargain hunting and, of course, writing. She is currently the editor-in-chief of


  1. 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.

    1. 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.

  2. $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!

  3. 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.

  4. 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.

    1. 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.

  5. 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.

    1. 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.

    1. 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.

  6. 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.

    1. 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.

  7. 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.

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