Q3 2022: Top 20 World Cities by High Net Worth Individuals

[Steely Dan]

Originally Posted by lio45

I should add that to me, that brownstone lady, and a renter who has in her bank account the exact post-taxes amount that the brownstone lady would keep upon selling at current market value, are exactly as “wealthy”.

(The renter is more liquid, but not more wealthy.)

yeah, no one's got a gun to old brownstone lady's head forcing her to get by on food stamps.

she could always cash out into plenty of liquid cash-flow and rent in a more modest abode.

reverse mortgage also wouldn't be out of the question in such a situation if she was hell-bent on staying in her brownstone.

[Crawford]

Originally Posted by lio45

The question of whether someone with $2M of assets is “wealthy” is a legitimate one, but the question of whether that lady has a net $2M of assets (wealth) isn’t.

Right.

I mean, in a country that deifies homeownership, there's a separate issue of cash-poor households in high value homes.

My Aunt in CA lives in a home on a street where lots go for about $6 million, but is a coupon-cutting pensioner who lives a pretty modest lifestyle. She'll likely never move. In places like Bed Stuy, Brooklyn, there are grannies on food stamps living in paid-off $3 million+ brownstones. They might not fit the stereotype, but they're (by most measures) fairly wealthy. The wealth will probably only be realized by children/grandchildren.

[lio45]

Originally Posted by Steely Dan

yeah, no one's got a gun to old brownstone lady's head forcing her to get by on food stamps.

she could always cash out into plenty of liquid cash-flow and rent in a more modest abode.

reverse mortgage also wouldn't be out of the question in such a situation if she was hell-bent on staying in her brownstone.

Originally Posted by Crawford

Right.

I mean, in a country that deifies homeownership, there's a separate issue of cash-poor households in high value homes.

My Aunt in CA lives in a home on a street where lots go for about $6 million, but is a coupon-cutting pensioner who lives a pretty modest lifestyle. She'll likely never move. In places like Bed Stuy, Brooklyn, there are grannies on food stamps living in paid-off $3 million+ brownstones. They might not fit the stereotype, but they're (by most measures) fairly wealthy. The wealth will probably only be realized by children/grandchildren.

Exactly. There's a reason the term "cash-poor" exists, and has a different meaning than "poor", which also exists.

[iheartthed]

Originally Posted by Crawford

My Aunt in CA lives in a home on a street where lots go for about $6 million, but is a coupon-cutting pensioner who lives a pretty modest lifestyle. She'll likely never move. In places like Bed Stuy, Brooklyn, there are grannies on food stamps living in paid-off $3 million+ brownstones. They might not fit the stereotype, but they're (by most measures) fairly wealthy. The wealth will probably only be realized by children/grandchildren.

For me the distinction is if that person could sell their current home and easily move into a similar home? "House rich" people would struggle to do that. I'd agree that they aren't "poor", but they're also not what I'd call "wealthy". Wealthy people don't get priced out of their own neighborhoods.

[JManc]

Little old ladies in free and clear $2 million brownstones are an outlier. Most people have mortgages. I have several co-workers who own homes in the area and most likely are no where near close to being paid off. They have equity but nothing like someone with $2 million in an index fund. My wife and I looked into moving into townhouse that was 2x as much as our current one and ultimately decided against it because we would tie up the difference in cost of new place.