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. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. “…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.

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