Revealed: How Much Money You Need to Get Rich, by the Empire

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Revealed: How Much Money You Need to Get Rich, by the Empire

Being “rich”—or among the top 10 percent of earners in the US—looks very different depending on your situation.

Earning $200,000 a year in the state with the lowest threshold—West Virginia—means you’re living large, according to a report from Visual Capitalist. Meanwhile, getting that money in Washington, DC—the place with the highest limit—may mean you can’t pay your bills.

Generally, a family needs to earn between $198,000 and $387,000 in annual income to be considered among the top 10% of earners.

But the District of Columbia is weird: To be considered wealthy here, you’d need to earn a whopping $635,000 a year.

The top 10 states and DC where it takes the most money to be considered wealthy are, in order, the District of Columbia, Massachusetts, Connecticut, New Jersey, Washington, New York, Hawaii, Alaska, California, and Maryland (tied) and Rhode Island (tied).

(Realtor.com)

Visual Capitalist used information from Germany-based tax platform BuchhaltungsButler and Berlin-based data studio DataPulse Research, which compiled gross household income (pre-tax) numbers from the United States Census Bureau for all 50 states and the District of Columbia.

Being rich won’t necessarily buy you the home of your dreams

“The difference in affordability is particularly clear at the government level,” it said Hannah Jonessenior economic research analyst at Realtor.com®. “In the most expensive housing markets, Hawaii, New York, California and Massachusetts, an income of $200,000 would make only about 50 to 55 percent of homes affordable.

“The Northeast, in particular, continues to see strong housing demand driven by several major economic areas,” Jones explained. “Yet inventory has failed to keep pace, largely due to years of limited new construction. As a result, home prices in the Northeast remain high compared to many other regions.”

“Higher incomes do not equate to higher purchasing power in Connecticut’s comfort zone,” it said Evangela Brock of Douglas Elliman, based in Greenwich, CT.

Indeed, an income of $200,000 in No. 3 Connecticut would make only 73% of listings affordable—compared to 96% in the last place in West Virginia, according to Realtor.com data.

Brock notes that high-income clients in the hedge fund, private equity, financial C-suite, medical, legal, and corporate worlds are “no longer price sensitive” when buying a home in the Nutmeg State.

Greenwich, CT, attracts the uber rich. This modest home will still run you $8 million. (Realtor.com)

He says this is because of high government taxes. A buyer needs to consider not only their mortgage payments but also their annual property taxes

“A house between $3 million and $4 million here rarely has four bedrooms on the main lot, but the annual rent alone can exceed $40,000 to $70,000, depending on the city,” he explained.

As always, location matters.

Brock notes Greenwich, Darien, New Canaan, and Westport as cities most desired by high earners. Properties in these tight ZIP codes will cost you more than, say, Hartford or Bridgeport.

“At this level, it’s not just income,” he says. “It’s about lifestyle, reputation, and long-term value.”

Libby McKinney-Tritschlerluxury real estate expert with the AFA team at William Raveis, notes that high-income earners in Connecticut’s waterfront “earn more than $200,000 to $250,000 a year, which creates a buyer pool that is financially strong but also incredibly savvy.”

Most notable are commuters from New York City who migrate to the bucolic state for a less expensive lifestyle, more community, better schools, and “long-term roots.”

Manhattan: It’s tough even for a millionaire

Big pay may roll out the red carpet in Kansas, but Manhattan co-op boards aren’t easily impressed. (New York is ranked 6th.)

New York City co-op boards are notorious for turning down potential deep-pocketed buyers despite offers of cash. The facilitator Livvy Dunne the latest bold word to find i no through the cooperative board.

Not only are co-op boards legally allowed to reject applicants for any reason. Boards also want to see much more than a high salary.

“In New York City, it’s not enough to have money to buy,” Lisa K. Lippman of Brown Harris Stevens explains to Realtor.com. “Since co-ops take up about 60% of our property, and 90% of the property near Central Park, buyers looking for a co-op typically need to have twice the purchase price for the board to be considered.”

Lippman cites the Upper East Side near Fifth Avenue (Billionaire Row), the West Village, and Tribeca as the most competitive areas—even for the wealthy.

Location, location, location: The West Village in New York City attracts the wealthy. This 1830 townhouse with a carriage house needs some work and is listed for $5.5 million. (Realtor.com)

Sonia I. Christian-Bendt of Berkshire Hathaway HomeServices New York Properties agrees that money is king. A high salary won’t get you anywhere in certain parts of Manhattan unless you put a large percentage of it into your savings account.

“It’s not just about income, it’s about liquidity,” he says. “In high-value co-ops in New York City, anywhere from 20% to 50% or even 100% is what the boards are looking at in terms of the purchase price—and the purchase price in liquid assets.”

One of his clients, who is looking to buy a co-op on Sutton Place on the Upper East Side, was recently told he needs two years’ worth of monthly maintenance at closing. High-end co-ops can easily have a monthly maintenance fee of $10,000—so a buyer would need another $240,000 in savings to get approved.

Dear Ameer of Coldwell Banker notes that California (No. 9) is no better than the East Coast, depending on location.

“I’ve worked with couples where one is a teacher and the other works in corporate, for example, and it’s a challenge to find a home that meets their needs that isn’t a money pit,” he told Realtor.com. “In Orange County, a price tag of $1.5 million may seem like it should buy a nice home, but it’s usually something that needs some degree of work.”

But don’t lose hope. If you don’t bring in a lot of money, you can still live big in certain states, especially those below the Mason-Dixon line.

The five states where it costs the least amount to be considered wealthy are, in order, West Virginia ($198,000), Mississippi ($200,900), Kentucky ($204,300), Arkansas ($206,000), and Oklahoma ($206,800).

District of Columbia

Annual income required to be considered wealthy: $635,000

Median home price: $540,000

“High income earners in DC who are willing to be in Georgetown have been waiting for that opportunity and are having a tough time with limited inventory and constant competition,” Tracy Shively of Douglas Elliman told Realtor.com.

Those who can’t get into that high-end area look to other hot spots: Kalorama, Woodland Normanstone (a small affluent neighborhood in Woodley Park), Wesley Heights, Kent, and Burleith in North Georgetown.