In Money, Wealth

Our Thresholds for Wealth: The 5 Levels of Money & Independence

My partner and I were talking about wealth and income, and we thought about minimum wealth thresholds that would change your life, and we came up with our own rough map of it.

I do distinguish between income & wealth – You can be a high income earner without much wealth, or you can be a low income earner with a lot of wealth saved.

The ideal combination is High Income Earner + Wealth Saved, obviously, but we should all be clear that Income does not equal Wealth.

DISCLAIMER: All of this is extremely privileged thinking.

I understand 100% that the median income and wealth is NOWHERE near to what we are describing here, and people can be equally as comfortable on a lot less. This is just personal opinion / musings for our situation.

So talking about WEALTH…

These are ‘agreed’ upon levels by bankers, wealth people, etc.

  • UHNW (Ultra High Net Worth) – Having assets of $30 million USD or greater
  • VHNW (Very High Net Worth) – Having assets from $5 million USD to $30 USD or greater
  • Wealthy – Assets from $1 million to $5 million

Then we also have the idea of 1% in Canada.

Top 1% in Canada Metrics

This is the total wealth to make it into the top 1%. Not sure if this is individual or household, but based on the sources used, it seems to be household net worth not individual as I suspect it would be difficult to split the two (more data points).

I feel like this distinction is important – individual or household – because it helps single people (or even people like me), understand what it means when we are tracking our own journeys, not our journeys with someone else.

And seeing in the statistics that most of these households are headed by white men, you could reason out that they may have partners who make less/don’t work at all, so the whole net worth that you see, should truly be split in half.

Here’s the top 1% in Canada for households

  • Age 25 $405,737  CAD
  • Age 30 $811,472 CAD
  • Age 35 $1,622,945. CAD
  • Age 40 $2,434,417 CAD
  • Age 45 $3,651,626 CAD
  • Age 50 $4,868,834 CAD
  • Age 55 $6,491,778 CAD
  • Age 60 $8,114,724 CAD
  • Age 65 $9,737,667 CAD
  • Age 70 $8,114,724 CAD
  • Age 75 $6,491,778 CAD
  • Age 80+ $5,680,307 CAD

And here it is if you split it out by household versus individual (50%):

Net Worth Canada Percentiles – Top 1%, 5%, 10%, and 50%  in Net Worth

Again, this is likely household, not individual.

  • The top 1% of net worth in Canada in 2021 = $9,737,000
  • The top 2% of net worth in Canada in 2021 = $2,500,000
  • The top 5% of net worth in Canada in 2021 = $980,000
  • The top 10% of net worth in Canada in 2021 = $840,000
  • The top 50% of net worth in Canada in 2021 = $482,000

Canada’s Net Worth Dollar Amounts Between Percentiles

  • The amount of net worth required to go from 90 to 95% = $140,000
  • The amount of net worth required to go from 95% to 99% = $8,757,000

Average Net Worth Canada Statistics – Provinces

  • What is the average Net worth per household in Canada? $679,792
  • Average net worth per household in British Columbia (BC) = $943,742
  • Average net worth per household in Ontario = $714,796
  • Average net worth per household in Alberta = $700,171
  • Average net worth per household in Quebec = $470,325

Average Net Worth Canada Statistics – Cities

  • Average net worth per household in Vancouver = $1,144,204
  • Average net worth per household in Toronto = $966,698
  • Average net worth per household in Calgary= $840,417
  • Average net worth per household in Montreal = $520,725

And if we look at what you need to earn to be in the 1% of earners:

Source & Source

1. Basic minimum bare bones living

This is what my partner grew up in, and my mother lived through. We are talking no money for anything but food and rent. Sometimes neither in my mom’s case.

In my partner’s case, his parents were just so scared of not having any money that they didn’t spend any of it except on basic essentials – shelter and food. Even clothing wasn’t considered essential, and they welcomed ALL secondhand clothing which has given my partner a complex about wearing anything secondhand. It was so frugal that his father even once considered not buying a fridge when it broke because he wasn’t sure they needed it.

His mother was a typical woman living under the patriarchal mindset and didn’t say a word (or felt she had the right to), so she hauled their fresh milk, yoghurt and food for 5 people back and forth, TWICE A BLOODY DAY for A MONTH before his father saw it was unsustainable and bought a fridge. I can’t say I love this story because WTF… but that’s how far they went.

My mother just didn’t have food. She starved. She stole food where she saw it, even from household pets when their owners left scraps of food out for them on the steps, and to this day feels guilt and hatred for pets (which makes no sense to me to be honest, as these pets helped feed her in a way).

2. Comfortable living but not financially independent

This is where we were about 5-ish years (?) ago. We didn’t have enough to stop working and while we were debt-free, we still had to save and invest because we needed to cover expenses.

We were very comfortable – we can/could afford everything easily while we still worked. My partner really saved every penny in those years because he hated his job so much he wanted to quit at any cost.

Me, I didn’t hate my job as much, so I was still happily spending (you can see my wardrobe spending over the years as an indicator here), and content to save, but not like him. I also had side incomes, which he did not have, like my dividends which now cover 100% my basic bare bones expenses for the most part but with NO luxuries or extraneous spending on anyone or anything.

I didn’t have enough in dividends at that point in my life, but I was working towards it.

At this point of wealth, some people might have no debt but a mortgage to clear, and once they clear their mortgage, maybe they have a bit more money saved to actually retire on the wealth saved later on.

3. Financially secure

We are here now.

He still doesn’t have any side incomes aside from dividends (not enough to cover his half), so he is not as YOLO as I am. He doesn’t want any side incomes either because he doesn’t like to work. He’s a bit of a self-proclaimed lazy person and he knows that side incomes take time to build up, and he can’t be bothered. He’d rather choose to live on less and be super frugal, than to work hard and build up income like me.

Regardless of our methods, we are both fine to never have to work again if we don’t want to (he doesn’t want to, I still do). But we still have monetary challenges like not being able to plonk $500K-$1M down on a house without feeling it in our pockets.

We still have to work for the extra things we want that are luxurious but not required for life and living – we definitely have the distinction in our heads between this.

4. Give zero fks rich

We aren’t sure what the threshold is for this at first but we are thinking $10M or higher would be a significant amount of wealth where you truly can buy any “normal” thing you want (like a $1M-$2M house max but not $200M), and live very comfortably and stress-free.

In our lifetimes I’m not sure we will reach $10M, but that’s how we see things.

I personally am aiming for $1.5M in the next 2 years, then $2M in the next 10 years, which will bring me into my late 40s. From there, I have 20 years to decide if I want to keep doing this part-time work thing (our house location will decide this, as I will have to be mostly remote for contracts), or not.

Either way, hitting more than $3M by the time I am 65 would be my tentative goal, but the maximum I think I could hit in my own lifetime, given my working style (50% of my career), propensity to be lazy with a good work-life balance, is $5M.

I couldn’t possibly imagine hitting $10M unless something drastic happens but as I abhor lotteries, and don’t really invest in penny stocks or trends, I do not see this happening.

5. Rich beyond belief

This level is $50M or higher I think. I mean even at $11M that’s rich beyond belief to me, but we were trying to come up with thresholds that would make us think: OK there’s nothing to say at this point. There’s so much money, I am not even sure what you’d do with it all.

At this level, your things become more luxurious but the “needs” stay the same.

Your car, is no longer even a luxury car, it’s now a chauffeur who drives you around. Or you have a private jet that you own.

Your house is now not just a comfortable 2000 square foot – 4000 square foot home with or without people to help out occasionally like hiring a weekly cleaner, it’s 10,000 square feet with full-time staff.

That sort of thing.

I am not sure it is any more intrinsically enjoyable than at the lower levels of 3-4, because it is in the end, just stuff and services, but it all depends on what you consider to be useful for your life.

If you’re into having a personal chef and housekeeper, driver, etc.. then by all means that’s your thing – go for it!

Otherwise, for us, we do not really like having strangers or ‘staff’ in the home (just a personal thing, I don’t even like the idea of cleaners), so that would do nothing for us.

Where we would use that money is likely in something like a home with even more space around us that no one can encroach on, as that would really boost our lifestyle in our minds.

Anyway, those were just some nighttime musings. Do you ever think about such things, or are we weirdos?

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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  1. LynxAcres

    I’d say we’re at level 2. Living comfortably, only have a mortgage for debt, but definitely not financially independent.

    Personally, I hate cooking and cleaning and 100% would have a full-time housekeeper if I could afford it. 🤣 But then again, I want to farm full time. Not cook and clean full time. 🤷🏻‍♀️

    1. Sherry of Save. Spend. Splurge.

      HAHAHH!! That is definitely unique to hear you want to farm full-time and not cook/clean full-time. I feel very similarly.

  2. Anne

    I don’t think you are weirdos. We’ve been talking about this with my husband, who’s older than I am and also more wealthy. He could stop working already, but doesn’t want to. Especially since I am not going to retire any time soon. I will most likely have to work until I’m 65, if I want to have a decent pension. I come from a family where women live long, so I need to have enough wealth in case I live to be hundred…. I am on level 2 and might be able to reach level 3 in a couple of decades. And that’s definitely enough for me, I don’t really see the point of getting any richer. Unless it is to help others., like donate millions for vaccines or things like that.

    1. Sherry of Save. Spend. Splurge.

      That’s it — I don’t see the point of millions upon millions. $3M at the end between the two of us should be enough to cover our family and ourselves. I am personally aiming for $3M individually, so it may end up being $5M for both of us together, but we shall see.


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