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October 26, 2007


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I'm English, so middle class isn't really defined by income. As with all English classes, its more or less defined by the values that you have, and is evident in the way that you speak, dress, socialise, the car that you drive, the names that you call you kids,... Basically, nearly everything is a subtle class indicator.

My mom brought home less than $25k a year in the late 90s and early 00s when I was in high school (counting support from my dad) and I still considered ourselves lower middle class. Though now that I am now more worldly, I am aware that we probably did not fit the common definition of middle class after all.

I would say the lower end of being able to live the middle class lifestyle without serious debt is 30,000 for an individual and at least an additional 10,000 per additional person in the household. The high end is probably 100,000 for an individual with an additional 10,000 per additional peron in the household. Personally, I think someone who makes 6 figures and considers themselves anything less than upper middle class probably has trouble managing money.

That said, there are a couple of caveats:
1. How do you define exceeding the middle-class lifestyle? The average house size is much bigger these days than it was 25 or 50 years ago.
2. Some areas have really expensive real estate that makes owning a home prohibitively expensive for even the relatively wealthy.

I am not sure if either more traditional notions if what middle class means or a definition based on absolute levels of income are either useful or relevant. As an example, a person on $50K a year with a heavy mortgage, a family to support and some expensive habits is probably in a much worse position (financially speaking) than single person with no mortgage earning $40,000 a year and spending considerably less than take home pay. It seems to me that it would be better to define either by some measure of lifestyle/education/values or a measure of relative wealth/income. Neither measure is likely to be capable of achieving a widely accepted definition.

The term middle class should change from place to place. A person who makes $100k in San Fran is making an equivalent salary to a person who makes $52k in Atlanta. Some would say the San Fran resident is not in the middle class because of the six figure income but pretty much everyone would say the person in Atlanta is middle class. We really need a cost of living adjustment, similar to what we do by adjusting inflation on the dollar, to define the middle class.

Paul Moyer beat me to the punch. You can't really discuss middle class without looking at a household's location. I live in NYC and by the articles standards we're doing pretty well but my wife and I are trying to figure out how we can afford to buy a house without extending all of our income. Certainly Middle Class means something different now than it did 20 years ago, if it means anything at all.

Location adjusted net worth excluding primary residence

This is just my personal opinion, but I think being middle class is a slippery term to describe people who are "getting by" economically. Perhaps it's more of a state of mind and way of life than it is a matter of just numbers.

Simply, it should be defined by net worth. However, location would play a significant role as mentioned above.

Salary is useless determining what class you are in. What if a multimillionaire is living off only 60k/year in interest and reinvesting the rest? That would not make him middle class.

Another example, if your making $100k/year and you just start off your career and have to pay for $50k school debt, $25k wedding, come up with 50k down payment on a home, etc. the 100k + salary won't get you very far. Compare this to a 40 year old who has absolutely no debt, the 100k/year sounds a lot better now!

The vast majority of people in this country think of themselves as "middle class" - the only exceptions I've met either spent most of their childhood on welfare/assistance, or at the opposite end of the spectrum, they come from old money. I know a few young people (<30 years old) who have earned large amounts of money; they are wealthy (at least on paper), but still would call themselves "middle class", because that is how they grew up.

I make over 100K alone, and I still consider myself middle class, maybe upper middle class, but still not "upper 20%". I live in very expensive area - lower NY State, Westchester county, and the life here is really expensive. At the same time I don't think simply dividing the income by half is valid. A lot depends on circumstances. If you are trying to buy a home in this area and find that a one bedroom condo costs 300K and a one bedroom co-op 170K, you feel yourself lower middle class. At the same time if you bought your property in the 90s or decades ago, have low or paid mortgage, than there is not much reason to adjust for location. Property taxes are higher and food is more expensive, but 100K with paid mortgage in Westchester is still more on the average than 100K with a large mortgage in a cheaper area, at least unless you own a property with ridiculously high real estate taxes e.g. over 10K a year.

I'd agree about net worth. But then you have probably exclude the primary residence - you have to live somewhere. And what about 401K? Can you count all of it or shall you adjust it for taxes?

Another issue is job security. To me, as long as you are dependent on your job, you cannot really consider yourself "upper 20%".

I don't think in American the way you dress or the cars you drive is any indication of class - you can drive a Mercedes, wear $1000 suits and be heavily in debt. You can also drive a Honda Civic, wear a $40 dress and be rich. But this depends on definition of class.

I think middle-class is not defined by a dollar amount. I think that middle-class, first of all, means not being poor. That is, being able to afford the necessities as well as a range of luxuries (depending on whether you are lower/upper-middle-class). Furthermore, middle-class is also defined by not being financially independent. As long as your financial obligations (mortgage, car payments, tuition, etc.) compel you to continue working, then I think you are middle-class.

Once you achieve financial-independence, you either leave the system (i.e. Your Money or your Life) and you might still appear middle-class but are not compelled to work or you become so wealthy that your investments allow you to work voluntarily while allowing a lavish lifestyle.

Truthfully, though, if you asked most Americans, I bet they will tell you that being upper-class means having a jet-setting life like Paris Hilton's. Therefore they will never feel they are "rich enough" and are middle-class no matter how many 100s of thousands of dollars they earn.

i completely agree with toby on all that he said. try reading the book called CLASS by Paul Fussell. its an older publication and its a little foolish in some aspects but overall, the idea is that class isnt how much money you make. its how you act, how you see yourself, how others see you, your interests, and of course your financial worth. above all, its a mindset. check it out

You know, the NY Times did extensive reporting on this subject last year: the special section is available here:
They realize what I think most of the posters also acknowledge, which is that class is not just economically defined, let alone defined just by salary or net worth. Eduation and living habits and tastes also play into it.
Most people assume they are middle class, unless they have extensive exposure to those who are at other ends of the bell curve and can more precisely place themselves within the whole spectrum.

This is a consumer society so I would define it by how you live, what you spend and what that spending buys you. You can live better on much less in middle america, but incomes are much less there too. Overall, I think the tradeoffs roughly balance unless there is an influx or outflux of people in or out of the area. You can be wealthy and still live middle class.

I agree with Anitra. I am a fee-only planner, and I have some very wealthy clients who still consider themselves middle class. The only reason is they grew up middle class. They struggled for the majority of their lives building a business and then the wealth, in numbers, showed up near the tail end.

Personally, I love these types of folks. They have money but are tied to their roots. They remember where they came from, and they try to help others who were in their position. I am bothered by the folks who have attained money, and then create a sense of entitlement or prestige. They abandon their roots for snobery.

I second the encouragement to read Class by Paul Fussell. Very interesting. I like to think of myself as Class X because I've unplugged from the system of expectations and signals.

I think it would be useful to consider the middle 50% of household income figures, the middle of the bell curve, to define the middle class. (A percentile rank system.) At what point does a person cross over from middle class income to upper class?

Last year, if you earned $60,040 or more in household income, you were in the top 25% of earners in the USA. (Top quartile--above middle class.)

If you earned $99,111 or more, you were in the top 10%.

If you earned $137,500 or more, you were in the top 5%.

If you earned $328,048 or more, you were in the top 1%.

So the transition point is $60k. I think a lot of folks would be surprised by that. But the Lifestyles of the Rich and Famous we see on TV, being so ostentatious, makes everyone feel poorer. Paris Hilton is a freak. She certainly isn't rich by income wealth--only asset wealth from family, which rarely lasts beyond the fourth generation.

"But the Lifestyles of the Rich and Famous we see on TV, being so ostentatious, makes everyone feel poorer"
This is so true, and this is one reason so many people earning over 100K consider themselves middle class. After all, you cannot afford a mansion in Beverly Hills or in NYC suburbs or an apartment on Central Park West on 100K a year. Most people, myself included, think of "upper class" as those who can spend a cost of a small apartment on a single diamond necklace.

It is also difficult to think of oneself as "upper class" if one serious illness can wipe you out completely.

OK, I have to agree with Beastlike and a few other comments on this. Perhaps it makes sense to review net worth and assume above some number (say $10 million) would put you in the rich category.

Perhaps I may get some criticism on this but I feel that earning less than $1 million per year will still be upper middle class if there is no significant savings to fall back on... reason is most jobs like this in a corporation are quite demanding and often can go away with little to no notice and you can go from being comfortable to no cushion pretty fast.

One thing is for sure- the slow loss of the dollar purchasing power will make everyone adjust upward their definition of 'rich' in dollar terms in the coming years.

-Big Cheese

check out
It's a whole site devoted to these questions. They have a video done by a talented teen and her documentary interviews kids from very low to very high income backgrounds and they all think they're middle class. People are uncomfortable acknowledging poverty or wealth!

If you have enough money you don't have to work, you are rich and above the middle class.

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