WHEN it comes to wealth, many Australians have different views.

But when you talk about the general definition of being able to not have to work anymore, there’s a magic figure that will achieve that.

Griffith University financial planning expert Katherine Hunt said based on commonly used figures in the industry, a couple would need $2 million together in unearned income — income from private means, most commonly investment earnings, rather than from working.

For an individual the figure would be higher — about $1.5 million — and it doesn’t include money from working.

Dr Hunt said this would be based around Australian government figures that say to have a “comfortable retirement” a couple would need a combined unearned income of $120,000 a year.

That means they would need to have about $2 million invested conservatively to produce that income.

“When you think about being wealthy, for most people it’s the ability to choose not to work anymore, and most people in that bracket choose not to work anymore,” Dr Hunt said.

“They end up with a lot more time on their hands and more ways to spend it.

“If you achieve the $2 million mark that’s it, there's definitely no need to work again.

“They’re considered wealthy and are able to self sustain.”

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Dr Hunt said in Australia the most common path to achieve this and be considered wealthy as property investment.

“Because it’s so popular, the trouble is they think they’re wealthy because they say ‘I have five investment properties’ but the net assets are very small because most of that is debt,” she said.

“They feel like they’re wealthy but if you look at what their actual net asset is, not so much.”

The average spend a year for an individual in Australia is about $50,000 while that figure is only $60,000 for two people living together.

The latest figures for the United States reveal Americans need an average US$1.4 million to be “financially comfortable”, up from $1.2 million a year ago.

According to the second annual Modern Wealth Index from investment services company Charles Schwab, published by Bloomberg, to be considered wealthy an American would need $2.4 million.

The average amount Baby Boomers required to be considered wealthy was $700,000 higher than the figure needed by Millennials.

Although 18 per cent said wealth was being able to afford anything, 17 per cent said it was “loving relationships with family and friends”.

The index reveals that having a written financial plan can lead to better daily money behaviours.

“Planners” are more likely to have a higher overall Modern Wealth Index score, be regular savers, and effectively manage their debt.

Terri Kallsen, executive vice president and head of Schwab Investor Services, said planning was critical to achieving any goal.

“It’s like establishing an exercise regimen to get in shape − we need to take the same approach to keep our finances in good health and on track,” Ms Kallsen said.

Originally published as The amount you need to be ‘rich’