What Salary is Lower, Middle, Upper Class ? (Indiana, Minnesota, New Mexico)

[newenglandgirl]

What "class" would you say a young man (n his 30s) is in who comes from a wealthy (really wealthy) family and graduated from an ivy league college and is unemployed longtime (living on unemployment and maybe some of his parents' dough)?

Is his "class" based on his upbringing and education, or his promise, or his actual income?

[cpg35223]

See, I think there is a definite trap in defining class by income range. For example, an arbitrary number such as $75,000 would be a very good salary in one place and practically poverty level in a place such as New York or San Francisco.

As we learned upon moving, middle class income in San Diego is considered top-end income in our mid-sized Southern city. As a result, we could take the equity from our modest home in a middling San Diego neighborhood and buy a much nicer home in a top-shelf suburb and still have a lower house payment and property taxes that are unbelievably low. Meanwhile this city's services and schools are excellent and would stand toe to toe with just about anything back in California.

Instead, I think better yardsticks for lower, middle, and upper class have a lot more to do with lifestyle and economic health. For example, what is the savings rate like? What can the family afford in terms of activity without racking up debt? Does the family live in a low-crime area with quality schools? Do both parents need to work? After all, haven't we seen enough people buy McMansions over the past decade, only to find that they were living on borrowed time?

[newenglandgirl]

Jesus was lower class all his life.
The Buddha was originally upper class.
St. Francis was originally upper middle (merchant) class.
They all had the same message.


Many fine artists and writers are in lower income brackets but are often highly educated, "refined," sophisticated in lifestyle, intelligent and even brilliant. They blow apart the prevailing stereotype for "lower class."

"Classes" as indicator of who people really are is an outdate mode of classification (old Russia, old Europe, early U.S.). It's like the GDP. In a wholistic way, doesn't judge much other than dollars. You make eirhter a little or a lot and you either live intelligently/humanistically or small/selfishly. What's the true measure of human worth?

[mysticaltyger]

Originally Posted by cpg35223

Instead, I think better yardsticks for lower, middle, and upper class have a lot more to do with lifestyle and economic health. For example, what is the savings rate like? What can the family afford in terms of activity without racking up debt? Does the family live in a low-crime area with quality schools? Do both parents need to work? After all, haven't we seen enough people buy McMansions over the past decade, only to find that they were living on borrowed time?

You made some good points throughout this post...but this last part has some dicey aspects as well.

Jean Chatzky, in her book The Difference, mentions there are a lot of "high income paycheck to paycheck" people out there. Maybe there are not quite as many now, but I don't think the percentage of people who live this way has changed by more than a few percentage points. People in high status professions such as doctors and lawyers are particularly prone to living at or beyond their means, say the authors of Stop Acting Rich.

[destinedtodave]

I think that besides gross income we have consider discretionary income. With some bad financial planning, a couple kids, car and high mortgage payments, someone making 100k would be middle class in my opinion. If they are single, then I'd put them at upper middle class. Of course, I'm not talking about Manhattan here-I know people like to come on this thread and brag about how someone else's "middle class" would be lower class in their 'hood.

I have pretty strange circumstances as an American overseas. My income puts me in the OP's lower middle class. But the thing is, I eat extremely well, party and go to world class clubs weekly, take a weekend trip every few weeks, and only work around 32 hours a week.
Due to some contractual benefits (including a free apartment) and a lower cost of living I'm able to save $1000/month after entertainment/buying random stuff/etc. Obviously this would vanish if I had a kid or anything, but then again I'm 22. I'd say that due to my discretionary income and free time I am middle class. I suppose reading "4 Hour Workweek" influenced my thoughts on this or at least gave me confirmation. It's useful to put you in a different mindset if you can get past the boastfulness of the author. Sometimes it seemed like I was reading a paperback version of a 3am infomercial.

I think to be truly upper class, you need to have as much discretionary income to finance pretty much whatever you want. For someone, this might mean 150K/year which allows them to buy hundreds of acres of land to build and go hunting on. For another, it could be 10 million. Honestly, I think a lot of people are setting the bar of upper class a little bit high. One reason of this was the explosion of wealthy appearances in the last 30 years. Owning a Mcmansion (however distasteful) or Lexus indicates real wealth but the majority of people enjoying these things are eye neck up in debt.

So, instead of looking at gross income we should view cash available after taxes, rent/mortgage, and other necessities. This will help even the playing field between places like San Francisco with Tallahassee.

[miyu]

Originally Posted by DonnaReed

Not for NY. Those numbers are quite low.

My take:

$30,000 wouldn't make lower middle class. I'd consider that low-income.

Your Upper Middle Class ($60,000 to $100,000) is closer to lower middle class or fairly equivalent to what we call "working class".

Your salary for Upper middle class $100,000 I'd consider the low end of middle class.

And upper middle class, I consider $200,000 or $250,000 to $500,000.

I agree with this. This is more on-par with reality esp with 2 income families. I was in the lower class all my life (and lived as such). But as of last year I moved into the lower end of middle class. Woohoo. Still can't afford a home.

[newenglandgirl]

Originally Posted by miyu

I agree with this. This is more on-par with reality esp with 2 income families. I was in the lower class all my life (and lived as such). But as of last year I moved into the lower end of middle class. Woohoo. Still can't afford a home.

In many areas of the country on your new salary you should be able to afford a modest but nice home, before interest rates climb back up try for it asap.

[mysticaltyger]

Originally Posted by decafdave

I think to be truly upper class, you need to have as much discretionary income to finance pretty much whatever you want. For someone, this might mean 150K/year which allows them to buy hundreds of acres of land to build and go hunting on. For another, it could be 10 million. Honestly, I think a lot of people are setting the bar of upper class a little bit high. One reason of this was the explosion of wealthy appearances in the last 30 years. Owning a Mcmansion (however distasteful) or Lexus indicates real wealth but the majority of people enjoying these things are eye neck up in debt.

You made some good points here. One other point I'd make is what kind of effort it takes to eanr your income. If you're working 80 hours a week to pull in 150K in New York City, that's different than earning 40K or 50K in investment income and being able to live wherever you want where your money will go a lot further.

[mysticaltyger]

Originally Posted by marcusj245

One economics professor I had claimed that, even now, there are only (2) types of classes: rich and poor. The "so-called" middle class, according to him, "are just poor people that do not starve."

That sounds a tad melodramatic to me. But I do agree that what separates the rich from everyone else is they get their income from investments and don't have to go to work every day.

[mysticaltyger]

Originally Posted by littlelamb3

The problem with people on Long island/Manhattan is that most live way above their means. Our household income in 160k on Long island, and we have always lived way below our means. We own a ranch home and drive smaller, economical cars. Most people have serious debt and live above their means, that is what got our country in trouble in the first place. I said for many years, when those HUGE homes were going up, that most could not afford them, and I was right

Bingo Problem is, it's not just Long Island/Manhattan people who overspend. It's most of the US.