Are You Middle Class (Calculator)?

[Koolau]

Quote:

Originally Posted by Andre1969 She later added, “There’s a lot of ambivalence about being rich, and wealthy people resolve that by thinking of themselves as hard-working and implicitly middle class.”[/I]

Yeah, I consider that I was born lower middle class, w*rked my way up through middle, middle class and feel I've arrived at upper middle class.

Folks say to me "you live in Hawaii, you must be rich." I live in a condo not unlike 10,000 other such dwellings. I drive along Kalaneanaole Hwy or through Diamond Head area and see these mansions up on the hill, overlooking the Pacific and wonder: How rich do you have to be to own one of those? I figure "Upper Class." But who knows. I know I can't afford a $10 to $25 million dollar place. But some folks can. YMMV

[ShokWaveRider]

Our income changes based on what "We" want it to be at any given time, Net Worth less so. For retired folks I think Net Worth and investable assets are a better indicator.

On another note. A lot of folks identify as "Middle Class" when in fact they are not. There are really 3 Middle Class designators, Lower Middle, Middle and Upper Middle.

We sensibly identify ourselves as Middle Class by our lifestyle. Although our net worth and investable assets puts us into the upper 5th. percentile.

[Venturer]

Elvis said it pretty good many years ago!
Well, they said you was high-classed
Well, that was just a lie
Yeah, they said you was high-classed
Well, that was just a lie
Yeah, you ain't never caught a rabbit
And you ain't no friend of mine

[GravitySucks]

I substituted my withdrawals and SS for income and it comes in solidly middle class for my middle cost of living zip code. Sounds right. Next 5 year spending plan should lift me up out of the middle though.
Wealth wise I know I’m in the 90 percentile so hard to say it’s middle class.
When working my highest earnings were in the top 20 percentile for at most for 5 years. But my savings and investing put me in the top 10% of wealth - something I’ve been oddly proud of.

[LateToFIRE]

“No, not rich. I am a poor man with money, which is not the same thing"

I really like this tagline! I think describes me very well. Grew up in less than ideal circumstances (vast understatement), now decidedly not middle class according to the calculator, though I will never feel rich maybe owing to my background.

Once you start talking about upper levels of income, what is not captured is that this cohort varies a lot from year to year. For example, my compensation is highly variable - in a good year, I'm a one-percenter, in a bad year, I might get knocked down a couple of notches. Also, big liquidity events, like sale of a business or property, can push someone into a higher percentile (and higher tax bracket) for a year. This is why the income one-percent is not a static membership - there is a lot of cycling in and out of that bucket from one year to the next.

NW is a much better measure of inequality.

[street]

Income for me is very little but doesn't show the whole picture with the calculator. I'm a pauper in a sense but is a false view.

I'm by no means a rich person financially.

[aaronc879]

This calculator was clearly intended for those who are still working full time rather than retired folks.

Due to my chronic pain I have been doing almost no work at all so I am lower class for income. I assume I would fall into middle class for net worth although much lower than anyone else on this forum.

[brett]

Does it matter?

Never understood why people are so concerned about where they sit on the this so called scale or the income scale. Where they live, what vehicles they drive. It has always seemed like insecurity to me.

Will it alter your self image, will it increase your financial resources?

One garage across the street has two new BNW's in the drive. A 5 and an SUV. The one beside it has a brand new Audi SUV and for shame a four year old Merc SUV. Beside us....Acuras.

Do we care that we drive a 2006 Accord and a 2007 Solara? No. But is this a good gauge of our financial resources, our pre retirement income levels, or our past level of employment? Whether we are middle class, lower middle class, upper middle class? I don't knw....but who really cares?

[Phroig]

I’m in the same boat as the other posters who are still working. There’s a difference between an arbitrary calculator classifying you as high income for where you live, and feeling like you’re rich. Rich to me is Mcmansions and country homes, Bentleys, and private jets. I’ll never have that kind of money. That’s OK.

[Car-Guy]

All of these calculators say I'm well into the upper class (financially ) Sure doesn't feel like it.

When I drive through a big city I see so many new fancy high dollar "homes/neighborhoods" and lot's of very expensive cars running around. Are all (or most) of those bought with borrowed money?

[SumDay]

Duh....

Quote:

Your household has a much higher income than most in your Zip code.

[Sue J]

In our area our household income is right in the middle. Since our area has a lot of families my guess is that they are still working and have a mortgage payment. We don't have a mortgage payment so our middle sized income seems quite comfortable.

As for "class", that's another discussion!

[Koolau]

Heh, heh, I'll just revert to my old adage. I have enough.

[audreyh1]

Quote:

Originally Posted by Jerry1 So what is my income? When I was working, I was clearly over middle income. Now, I think of my spend as essentially a surrogate for my income. I could use our SS and pension but that doesn’t capture interest and dividends and then there’s capital gains which if unrecognized I guess shouldn’t be counted. Since it doesn’t consider net worth, I think it’s missing a big piece. There’s probably multi millionaires on this site that hardly have any income (recognized) and spend very little but who are clearly middle class or more. FWIW, it said I’m basically middle class though I can attest that if it wasn’t for low class, I’d have no class at all.

I would just use household taxable income as I think the IRS statistics are generally used for these kinds of classifications.

[LateToFIRE]

Quote:

Originally Posted by Car-Guy All of these calculators say I'm well into the upper class (financially ) Sure doesn't feel like it. When I drive through a big city I see so many new fancy high dollar "homes/neighborhoods" and lot's of very expensive cars running around. Are all (or most) of those bought with borrowed money?

Two thoughts on your comments/questions:

1) Why don't you feel upper class (financially)? Doesn't feel like it because we humans tend to accept our present circumstances as "normal" (see "hedonic adaptation). Also, it's all relative and we tend to compare ourselves to those further up the ladder, rather than those down the ladder. Hence, in our own heads, we're always thinking we're in the middle.

2) Are all those big homes and fancy cars bought on borrowed money? Yes, and no, and everything in between. For sure, there are a lot of people living high on the hog on borrowed money. But, I have also seen that there is unbelievable wealth out there, far more than you can actually see. And I don't mean the folks you see in headlines, I mean, folks worth $10mm, $50mm, $200mm... statistically rare, yes, but in high concentrations in the big coastal cities, living upper middle-class lifestyles. Also, at those wealth levels, debt is utilized as a tool, not a crutch. The wealthy absolutely love using OPM (other people's money).

[Irishgirlyc58]

Quote:

Originally Posted by ElizabethT Agreed. All references to 'Class' in this regard should be permanently replaced with 'Income.' 'Class' denotes behavior. There is no intrinsic correlation between income level and class, i.e. behavior. Or elongate Class to what it probably was originally- Classified. (Higher (Income) Classified, Middle (Income) Classified, Lower (Income) Classified.

If you read Bridges out of Poverty it explains the difference in people’s priorities and thought processes based on being in poverty vs middle income vs wealthy.
It’s actually very interesting and is helpful when you are working with people in poverty- as I was.
The middle class often looks at people in poverty and can’t understand why they make the choices that they do but there are actual human reasons for their choices and the majority of us would do the same if we were in chronic poverty.
Of course this is a generalization and there will be exceptions but I can tell you from 35 years of working with people in poverty- who grew up in poverty and poverty is all they have known that there is a difference in how they navigate life with their decision making.

[street]

Quote:

Originally Posted by Irishgirlyc58 If you read Bridges out of Poverty it explains the difference in people’s priorities and thought processes based on being in poverty vs middle income vs wealthy. It’s actually very interesting and is helpful when you are working with people in poverty- as I was. The middle class often looks at people in poverty and can’t understand why they make the choices that they do but there are actual human reasons for their choices and the majority of us would do the same if we were in chronic poverty. Of course this is a generalization and there will be exceptions but I can tell you from 35 years of working with people in poverty- who grew up in poverty and poverty is all they have known that there is a difference in how they navigate life with their decision making.

Very interesting! Just living and seeing poverty all your life I can see that same pattern of living continue. Not an easy road going forward.

[Jerry1]

Quote:

Originally Posted by Irishgirlyc58 Of course this is a generalization and there will be exceptions but I can tell you from 35 years of working with people in poverty- who grew up in poverty and poverty is all they have known that there is a difference in how they navigate life with their decision making.

Quote:

Originally Posted by street Very interesting! Just living and seeing poverty all your life I can see that same pattern of living continue. Not an easy road going forward.

I think the same is true at any level. I’m sure that people who grew up in wealth and wealth is all they have known that there is a difference in how they navigate life with their decision making. My guess is that most people don’t move too far from what they’re born into. Of course a lot seem too, but I bet statistically most do not.

[Irishgirlyc58]

Quote:

Originally Posted by Jerry1 [/B] I think the same is true at any level. I’m sure that people who grew up in wealth and wealth is all they have known that there is a difference in how they navigate life with their decision making. My guess is that most people don’t move too far from what they’re born into. Of course a lot seem too, but I bet statistically most do not.

The book Bridges out of Poverty also goes into the behavior of wealthy people. They definitely have their own ways that may seem foreign to others.
But I didn’t focus too much on that because I didn’t work with wealthy people. [emoji23]

[Koolau]

Quote:

Originally Posted by Irishgirlyc58 The book Bridges out of Poverty also goes into the behavior of wealthy people. They definitely have their own ways that may seem foreign to others. But I didn’t focus too much on that because I didn’t work with wealthy people. [emoji23]

It's all very interesting and I'm sure there are undergraduate and graduate university courses that study poverty and wealth. But I don't see this as germane to the discussion of "what is middle class" and the current question "are you middle class" in terms of income and/or savings.

Once again, I'll mention my BFF who is half a million in debt at age 78 (NW - minus $500,000.) HE lives a middle class life. Nice house, nice cars, toys, travel, eating out, etc. He and I w*rked at the same megacorp and though our w*rk assignments were quite different, we made about the same money.

SO, is such a person "middle class" because he couldn't handle money and is deeply in debt - yet gets pension and his/hers SS that allows a very nice life style?