How do the rich stay wealthy
A wealth researcher explains when you are rich
Who in our society is rich? The billionaire, the Porsche driver or the one who can eat in a restaurant every day? Business Insider asked wealth researcher Wolfgang Lauterbach. The professor at the University of Potsdam says: "99 percent of rich people in Germany are entrepreneurs".
Because: It is not income that determines who is rich, but wealth. “Everyone wants to build wealth,” says Lauterbach. “Assets create security and independence. It can be inherited and helps to protect against life risks ”. A job with a high income can be gone quickly. The wealth that entrepreneurs in particular have is more permanent.
A wealthy person doesn't have to own a mansion and drive a limousine. You are rich if you can live on the interest and income of your wealth alone - i.e. you don't have to work.
Rich already with 35,000 euros per year
Lauterbach brings the following example: someone receives 60,000 euros in interest per year from their assets. After deducting taxes, he has 35,000 euros to live on. Not much, but: "This person is rich in freedom, he can do what he wants," says Lauterbach.
If the banks have their way, however, this person is not necessarily rich. They define the so-called "high-net-worth individuals" as rich - people with financial assets of one million dollars (940,000 euros). Anyone who has this amount available quickly, for example as cash in the account or as an investment in shares, is considered rich by credit institutions. But not who has invested the amount in real estate, for example; then he cannot quickly convert the wealth into money.
The federal government has chosen for itself who is poor and wealthy. In Germany, anyone who has less than 1000 euros net per month as an individual is at the poverty line. This value corresponds to 60 percent of the median-weighted net income per capita. Wealthy people are those who earn twice the median-weighted net income per capita: 3500 euros net per month. This includes, among others, many doctors.
"There is no limit to the top"
The government defines poverty and prosperity in terms of income, but not wealth. “There is no upper limit,” says Lauterbach.
There are 120 billionaires living in Germany. TSG Hoffenheim owner Dietmar Hopp is worth around 9 billion euros. But compared to Bill Gates, his fortune is also small - the Microsoft founder posted nine times as much with around 82 billion euros. There may be a definition of wealth after all. Lauterbach says: “You are rich if you don't have to work”.
This article was published by Business Insider in April 2017. It has now been reviewed and updated.
- What is the loudest bluetooth speaker
- What is the full form of the LLB
- How safe is the USA for tourists
- How is someone awarded academic bullying
- Should I buy a BlackBerry Z30?
- Why can't I bring soda to school
- Can you get addicted to Adderall?
- Who is the most outstanding person at all?
- Reading changes people's personality
- Can a hacker hack social media?
- Why is Mary Queen of Scots important
- Why is hospitality such a stressful industry
- Which are the most durable smartphones
- Does it really work to give up hope?
- Which is Australia's smallest state
- Is it okay to eat quinoa every day
- Why are Indian IT managers micromanagers
- Should Gymshark leggings be tight
- What do Arabs eat for breakfast?
- Why do some Americans hate Arabs
- How many websites are created each year
- Islaendisch for German speakers easy
- Who or what is FISA
- Should someone masturbate before sex
- Are there any benefits to corruption
- Why shouldn't a man get married?
- Do you think swearing really works?
- How do I start an environmental business
- What are the symptoms of scoliosis
- How did Hitler lower unemployment
- Men like to be called by women
- Which company paid the most taxes?
- What is cryogenic treatment