When defining how much wealth you want it is important to first define what wealth is. It can’t simply be income because I think most people would agree that the person who earns $100,000 a year and spends $60,000 is better off (wealthier) than the person who earns $1,000,000 and spends $1,060,000. (Amazingly Congress does not believe this.) A few years ago I stated it this way:
Wealth is not about cash, it is about cash flow – to be wealthy all you really need to do is flow less cash out than in.
While I still believe that statement to be true, I consider it to be an incomplete definition of what it means to be wealthy. If you have more cash flowing in than flowing out then I think it is safe to say that you appear to be heading toward being wealthy as opposed to heading towards poverty but there must be a reason for keeping that extra cash flowing in which gets to the heart of what it means to be wealthy.