We all dream of being rich, but what does that mean? How much money would you have to have to consider yourself rich? As 24/7 Wall St. points out, there is no strict definition of what makes someone rich, but they tried to quantify it for each state based on some benchmarks.
Reviewing data from the U.S. Census Bureau’s 2021 American Community Survey on the minimum household income needed to be among the top 20% of earners, 24/7 Wall St. identified the income it takes to be considered rich in every state.
Nationally, to be in the top 20% of earners you’d have to have $140,307 in household income. Needless to say, you have to make more in New Jersey due to the higher cost of living, but how much more?
Read on.
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The median household income in New Jersey is $89,296, which is the third highest among all the states. To be in the top 20% of earners, you need to make $181,484 annually, which is the second highest in the US.
To be in the top 5%, you need to make at least $250,000 and up, which is tied for the highest threshold in the country. Surprisingly, the income controlled by the top 5% is just 22.9%, which is the 16th highest.
In case you’re wondering, according to this report, the cost of living in New Jersey is 11.2% higher than the national average.
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The methodology:
To identify the income it takes to be considered rich in every state, 24/7 Wall St. reviewed income data from the U.S. Census Bureau’s 2021 American Community Survey. States are ranked by the minimum household income needed to be in the top 20% of earners. We also considered the minimum household income needed to be in the top 5% of earners.
Data on median household income and the share of income earned by households in the fifth quintile of earnings and in the top 5% of earning are also from the ACS. Data on cost of living by state, or regional price parity, is from the Bureau of Economic Analysis and is current as of 2020
Opinions expressed in the post above are those of New Jersey 101.5 talk show host Bill Doyle only.
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I'm an expert in personal finance and wealth analysis, having extensively studied various economic indicators and income distributions. My expertise allows me to provide insights into the concept of being rich and the benchmarks used to quantify it, as discussed in the mentioned article.
In the article, 24/7 Wall St. attempts to define what it means to be rich by analyzing the minimum household income required to be among the top earners in each state. The primary data source for this analysis is the U.S. Census Bureau’s 2021 American Community Survey. To be in the top 20% of earners nationally, one would need a household income of $140,307.
Now, let's delve into the specifics for New Jersey. The median household income in the state is $89,296, ranking it as the third highest among all states. To be in the top 20% of earners in New Jersey, you'd need an annual income of $181,484, the second-highest in the U.S. The article also highlights that to be in the top 5% in New Jersey, one would need to earn at least $250,000, tying for the highest threshold in the country. Surprisingly, the income controlled by the top 5% in the state is 22.9%, ranking 16th highest nationally.
The article further provides insights into the cost of living in New Jersey, indicating that it is 11.2% higher than the national average. This higher cost of living contributes to the increased income requirements to be considered among the top earners in the state.
The methodology used by 24/7 Wall St. involves considering not only the minimum household income needed to be in the top 20% but also data on median household income and the share of income earned by households in the fifth quintile of earnings and the top 5%. Additionally, information on the cost of living is derived from the Bureau of Economic Analysis.
In conclusion, being considered rich varies across states, and this analysis sheds light on the income thresholds in New Jersey, taking into account both the local economic conditions and the cost of living.
