Wealthy think they're middle class

[GreenER]

But, just so it gets said, most people in the world don't live in the US. The worldwide median household income is a bit less than $10K per year. Everybody on this board is "middle class" or doing even better. By present-day worldwide standards, most people here are stinking rich. By historical standards, even more so.

So true. Travel brings perspective. I feel impoverished at times if I compare my situation to some on this forum but I feel incredibly wealthy in so many ways. I have enough to meet my needs. I have enough to afford luxuries, like the best local organic foods. I can afford to travel economically. And I can afford to retire in a couple of years and maintain my same lifestyle without a 20% reduction! All of this with having worked only slightly more than half time for the last 25 years. So many people in the world are struggling day to day. I feel extremely lucky! Plus I just found out in this forum that I'm in the top tier of wealth for my age group. All of this in a service profession! I can't complain and I thank my parents for having instilled frugality in me at a young age and for telling me social security wouldn't be there for me so It wad all on me to save for retirement. Thanks M & D!

 

[Rick_Head]

True, but we don't have servants a la Downton Abbey so I find it hard to think of myself as stinking rich.

Yes, location matters.

While we are probably UMC by income, well-to-do by NW, a friend in a "second/third world country" has 2 servants in a nice (rented) house and lives on less than US$25K/yr including a 2 month trip to Canada every summer. We have no servants and I managed a month in "said 2/3 world country" several years ago. We do not live on US$25K/yr or even twice that and we own our house.

 

[MRG]

You may be special, but for many people, without money there goes roof, food, health and wife.

Ha

I get what Dallas27 is saying and your point too Haha. You're both right. Yes, you do have to have enough to pay for a home, food, health issues. After that is achieved, it's the flip side. A 4000 sq. ft. home does not make someone twice as happy as 2000 sq. ft. home, and cars, planes..... Least that never worked for anyone I've known.

Sent from my SAMSUNG-SGH-I337 using Early Retirement Forum mobile app

 

[Amethyst]

Poor-mouthing is so common (not just engineers by any means) and I've never understood it one bit. Why would anyone want others to think they are poor? Are people afraid others will ask them for money? (You can always say no, unless the other guy has a gun). Me, I'd prefer that others think I was successful.

Amethyst

I worked with engineers who made well over $100k, and ((many had wives who had similar income. Yet they wouldn't even concede to being upper middle class... insisting they were poor.
e.

 

[RetireBy90]

Anyone ever heard of Maslow's hierarchy of needs? I don't remember all the levels he said people go through from basic security to self actualization but he pointed out how once a person reaches a certain level it is the human condition to look at a little more. Used to be at the top of my group, now I'm at the bottom of next higher group.

 

[Gumby]

A universal human drive and the basis for the 10th commandment.

 

[someguy]

Poor-mouthing is so common (not just engineers by any means) and I've never understood it one bit. Why would anyone want others to think they are poor? Are people afraid others will ask them for money? (You can always say no, unless the other guy has a gun). Me, I'd prefer that others think I was successful.

Amethyst

I think I can answer this easily and I suspect it won't be a shock to many here: jealousy. Many people get jealous of those around them having (or seeming to have) anything they don't. Out of that group, there are some who are willing to act on their jealously and that is what I am trying to avoid. I'm not talking about potential thieves/muggers. I'm talking about work peers, bosses, friends, etc.. All have varying degrees of influence on my path and success, but cumulatively it can add up.

Once I'm fully FIREd, I imagine this will matter a lot less to me.

 

[jerome len]

If 35k is middle class you have to remember that the bottom 47% supposedly receive some type of government support. So, most under 35k have more, money or services provided my the top 53% taxes.

I really consider the wealthy to be those that live in expensive homes.....1m or more.....fly 1st class or fractional jets......eat at steak houses, costing around $100 per person.....buy their clothes at upper end stores.....not Target or Macy's.

What do they earn? I'd guess 75k or more and they are at or above the middle class in my opinion. this is hard to define......another thought......I'd consider middle class or wealthy to be those that LBYM.......they are the most secure in maintaining their way of life over the long term.

 

[Ronstar]

The whole categorization into classes is ridiculous. It's totally subjective. From the numeric levels of the categories to whether one's class should be based on income or net worth (or whatever else). And there are external factors - in some areas income may be $30K - somewhere else it could be $150k for doing the same job. In some areas, COL may be 10 times that of other areas. IMO, people can categorize all they want. But none of it has any use as far as I'm concerned.

 

[pb4uski]

+1

Perhaps economic class is a frame of mind rather than a function of income or wealth.

And likewise, social class is a function of behavior rather than income or wealth.

I know some people of modest means who are classy and people of ample means who are vulgar.

 

[Amethyst]

I sort-of get that sense of self-preservation, although clearly, the gambit doesn't fool people at work who know what one makes.

Anyway, people get jealous when you're smarter than they are, too. I haven't heard of anyone playing dumb at work for self-protection, though. Then again, that might explain why some inept people keep drawing paychecks - like the secret millionaires on this forum, it's all an act, and they are secretly very productive.

Amethyst

I think I can answer this easily and I suspect it won't be a shock to many here: jealousy. Many people get jealous of those around them having (or seeming to have) anything they don't. Out of that group, there are some who are willing to act on their jealously and that is what I am trying to avoid. I'm not talking about potential thieves/muggers. I'm talking about work peers, bosses, friends, etc.. All have varying degrees of influence on my path and success, but cumulatively it can add up.

Once I'm fully FIREd, I imagine this will matter a lot less to me.

 

[Car-Guy]

I do know a few people in the"higher" class (by just about anyone's financial standards) but it sure didn't give/buy them much class.

 

[Chuckanut]

This reminds me of a speaker we had a church back in the 1980's.

The church was starting a drive to fund some needed maintenance and increase the usual yearly pledges. A lawyer from another church was asked to speak to the congration about giving and sacrifice. It wasn't bad until he mentioned how a few years ago, legal work and fees dried up at his firm. He informed us that since bonuses were not given out some lawyers "who routinely earned $250,000 a year had to find a way to survive on only $170,000 that year".

I remember seeing the pastor's eyes roll.

 

[ExFlyBoy5]

I agree that the whole classification system is just a bunch of hooey. I have never made a considerable amount of money and as the charts above list, I never made it out of "middle class" to the "upper middle class" but I am retired. This isn't to say nah nah boo boo to those that aren't retired, but I know plenty of folks that earned DEEP in the 6 figures and don't a have a pot to urinate into. I think it boils down to a couple things...the continued class warfare that consumers have fallen for. There is a reason there are so many ads everywhere...people keep buying all that crap. So, in order to keep up with Jones', you have to keep on spending. It isn't vogue to have a nice savings account, instead having a 6,000 SF McMansion and a 6 series on lease is the sign of "success". And, this all helps to drive the other issue that is so rampant...jealousy.

 

[imoldernu]

Going back to the original article...
Why so many wealthy Americans think they are Middle Class

It opens with:

By Treasury Secretary Jack Lew’s reckoning, being a millionaire does not constitute living high above the ranks of ordinary people. Lew said last week that back when he was in the private sector enjoying six- and seven-figure pay packages, “My own compensation was never in the stratosphere.”

and concludes with:

While Lew’s comments leave him open to charges that he is out of touch with economic reality, he is not alone, as surveys show many Americans also have misconceptions about income distribution.
A recent study by Harvard University and Bangkok’s Chulalongkorn University found Americans grossly underestimate the divide between CEO and average worker pay.
Such misperceptions were recently spotlighted by comedian Chris Rock in an interview with New York magazine. Of inequality, he said: “People don’t even know [about it]. If poor people knew how rich rich people are, there would be riots in the streets.”

What I read into the article was that the average citizen does not relate to the real wealth differential between their own status and that of the public and private leaders who make the laws and define the economic structure that is America.

Anymore than one can envision the daily life of a Warren Buffet, can one who lives in the rarified social scale of Washington or The Hamptons... relate to the outlook of young persons who have seen their life formed in the poverty
of the projects in Chicago.

For some of us here, including myself... little exposure to either extreme, but whatever the sense of what "should be", IMHO, a subject that will be in play for long time in the future.

 

[braumeister]

I'm pretty sure that if you asked most politicians, they would say there are only two classes in this country.

The rich, meaning Warren Buffett, Bill Gates, and Larry Ellison

The middle class, meaning everyone else.

 

[6miths]

If 35k is middle class you have to remember that the bottom 47% supposedly receive some type of government support. So, most under 35k have more, money or services provided my the top 53% taxes.

I really consider the wealthy to be those that live in expensive homes.....1m or more.....fly 1st class or fractional jets......eat at steak houses, costing around $100 per person.....buy their clothes at upper end stores.....not Target or Macy's.

What do they earn? I'd guess 75k or more and they are at or above the middle class in my opinion. this is hard to define......another thought......I'd consider middle class or wealthy to be those that LBYM.......they are the most secure in maintaining their way of life over the long term.

Doesn't pretty much 100% of the population get government support. Land their jets at the airports, drive their Lambourghinis on the roads, rely on police, fire, ambulance, and so on.

 

[Bikerdude]

So by income I'm middle class but by net worth I'm rich. So which is it.

 

[Major Tom]

So by income I'm middle class but by net worth I'm rich. So which is it.

Whichever one you want it to be.

 

[Bikerdude]

Whichever one you want it to be.

Well if that's the case then its a useless endeavor.

 

[explanade]

Most if not all here have unrealized gains.

If you try to liquidate it all at once, then you have about half after taxes?

So you can only redeem a few percent at a time, to last decades and to minimize taxes.

Your withdrawal rate defines you!

 

[Redbugdave]

It is difficult to quantify...you can make x amount of money to make it within a certain class of people. With that class of people you can expect certain things. I don't think it works out that way in the real world. Too many variables.

I think it all boils down to Quality of Life. Some make a lot of money, and lot goes out, too. Money has something to do with it to a point, but it really boils down to whether you are happy or not. That's why I can look around at other people and not feel superior or inferior. I have several friends making a bundle of money and rich beyond my dreams and there's no way I would want their life or lifestyle. And...I am younger than most of them still working, spending my time and life the way I want and pretty darn happy. Sometimes in the real world, the classes are reversed. I don't see it as a caste or class system. Maybe the wealthy feel like middle or a lower class because they are not really happy.

 

[NW-Bound]

So by income I'm middle class but by net worth I'm rich. So which is it.

Or how about expenses? An early retiree may have any income he wants by arranging his investments between before-tax and after-tax accounts, and to draw from his before-tax accounts or not. So, expenses define his lifestyle better than his income does.

 

[heeyy_joe]

If you're not subject to federal estate tax you're not rich. If you are subject to it and not rich you probably own a farm or ranch.

 

[samclem]

The idea of "classes" in modern America just doesn't have much utility. It serves to obscure and is emotionally-loaded without having any compensatory ability to make a complex issue easier to handle (the sign of a useful category label).

Political labels are much the same right now. "Conservative" means zero unless you know if the person is a "social conservative" or a "limited government conservative" (which, historically, would have been known as a "liberal).