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How much money makes you “wealthy” in Colorado?

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Have you ever wondered how much money it would take for you to be considered rich or wealthy? While people may have different definitions of wealth, it is commonly thought of as having great material resources or assets. Read this article to learn what is considered wealthy and what experts recommend to help you build your wealth.

Large houses on a hill in a wealthy Colorado mountain town.

What is considered “wealthy”?

What does it mean to be wealthy? To some, wealth may be a quantifiable number like a person’s net worth or income. To others, wealth may relate more to their values. Being wealthy may mean less about the dollars and cents and more about a person’s freedom and opportunity to pursue the things that they value in life.

Whatever your definition of wealth may be, it’s usually related to money in some way. To be wealthy, you need to have enough money so that you’re not living paycheck to paycheck. You should be able to cover your living expenses and financial obligations, plan for the future and spend on the things you value.

So how much money is enough? How much do you need in your bank account to be considered wealthy?

According to the 2022 Modern Wealth Survey conducted by Charles Schwab, the average net worth of an American to be considered wealthy is $2.2 million. They also reported that to be it takes a net worth of $774,000 to be considered “financially comfortable.”

In Colorado, it was surveyed that the average net worth of a wealthy person in Denver is $2.3 million, while it takes a net worth of $671,000 to be considered “financially comfortable.” This number may change depending on where you live in the state and what the local cost of living is.

How to measure your wealth

If you’re trying to measure your wealth, you can use the following methods.

Net worth

Net worth is one of the most common ways of measuring a person’s wealth. You can calculate your net worth by adding up all of your assets and subtracting your debt and liabilities.

Your assets may include things like your retirement accounts, stock market investments, cash in your checking and savings accounts, businesses and real estate.

When calculating your debt and liabilities, look at things like credit card debt, personal loans, student loans, car loans and any other debt obligations.

There is debate on whether or not you should include your primary residence and mortgage in your net worth calculation. In most cases when determining wealth, it is not recommended to include the value of your primary residence in your net worth. However, it may make sense to include any increase in value from the original purchase price.

For example, if you originally bought your home for $300,000 and it’s now worth $400,000, you could include $100,000 in your assets.

When looking at net worth, it is also important to consider your net worth by age. It may not be fair to compare someone who is in their twenties to someone who is older and has had more time to earn, save and invest.


Another metric that people use to compare and measure wealth is annual average income. Having a higher income can help a person build wealth because it gives them a greater ability to save and invest in cash-flowing assets which can help compound wealth over time.

Income can include wages you earn from a W2 job, investments, business/self-employment and side hustles.

In Colorado, the median income of individuals and households in 2020 were $36,934 and $75,231 respectively.

To be wealthy in Colorado, you need to earn significantly more. It was reported that the minimum you need to make to be in the top 20% of earners was $143,596 with the average income being $249,285. To be considered in the top 5% of earners, you need to make at least $440,000.

How to grow your wealth

While not everyone wants to or needs to be rich or wealthy, building your wealth can help you improve your quality of life, stress less about your personal finances and make you more financially resilient when times are tough.

Use these strategies recommended by experts to help you build your wealth.

Pay yourself first

One of the best ways to save more money and build wealth is to learn the concept of paying yourself first. This means that when you get paid or receive money, you prioritize putting money into your savings account.

One of the biggest mistakes that people make when it comes to their personal finance is thinking they’ll just save whatever is left over after they’ve paid their bills at the end of the month. By prioritizing saving and paying yourself first, you are more likely to stay on track to your financial goals.

Spend your money on buying assets

Many wealthy people will also prioritize buying cash-flowing assets over buying luxury goods. By buying assets like real estate, businesses and other investments, you can increase the number of income streams you have. This will allow you to save and invest more which will, in turn, increase your net worth.

Don’t overspend

Overspending, especially on items that you don’t need, can hinder your ability to build wealth. As you continue to increase your income, try to avoid spending more money on increasing your lifestyle, also known as lifestyle creep.

For example, if you get a new job that pays significantly more, you don’t need to buy a larger house or a new more expensive car. Instead, you could use the extra money to increase your savings rate or contribute more to investments.

This isn’t to say you shouldn’t reward yourself for your hard work. The key is finding the balance between spending on things you value and saving for your goals and building your net worth.

Protect yourself against losses

We’ve all seen stories of people who get rich and then suddenly lose it all. This loss could be caused by a variety of different reasons but making sure you have downside protection is key. As they say, getting rich and staying rich are two entirely different games.

One of the simplest ways to protect yourself against losses is to make sure you’re properly diversified. Diversification is important because it spreads your risk across different assets to make sure one event doesn’t have too great of an impact on your portfolio.

Be strategic with debt

Knowing how to use and manage debt is a very important financial skill. Debt, if used correctly, can be used to improve your wealth. Debt should be used for things that can provide value in the future, such as to pay for education or to buy assets.

It's extremely important to pay off the debt that has high interest rates so that you don’t erode your wealth through interest payments. Missing payments or carrying too high of a balance can also negatively impact your credit score.

Improve your financial literacy

Many successful people will attribute their success, in part, to having a learning mindset. The same is true for money and personal finances. The more you can learn and become financially literate, the easier it may be to understand your finances and build wealth.

Learning about money through free resources, or asking experts and professionals can help you make better financial decisions. Use these tips to help you build your net worth and hit your financial goals.

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