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Even a majority of the upper middle class fall into the "living way above your means" trap. You would think having the mean's to save would compel them to plan for the long term. With habits like this I'm surprised this country hasn't completely fallen off the cliff yet.
Just 45 percent of upper-middle-class households (income from $75,000 to $99,999) saved anything in 2012, according to the Fed study. That means the other 55 percent didn’t save for a house, retirement, or education. About 16 percent spent more than they earned and went further into debt.
The low rate of saving and thin emergency cushion wouldn’t be so worrying if it were just a hangover from the Great Recession. Households normally cut back on saving when someone in their household loses their job or takes a pay cut. It can take several years to make it up. But the low-saving trend predates the recession.
I wouldn't define the middle class as "well off". They didn't save anything because they most likely spent it all from either living in a high cost of living area or spending it on stuff they didn't need.
In some areas of the country if you make that little you can't afford rent. The majority of those in those areas arent upper middle class. Its all relative
Income does not define how wealthy you are. I've heard about doctors who make 500k but spend 600k. They are living paycheck to paycheck, no different than a hamburger flipper...only difference is that instead of a Red Box DVD and pizza for the weekend...they can go to the lake and party on their yacht. But come monday, they are both back at square one.
Most of them are probably playing Keeping Up With the Joneses and have little to show behind the status symbol house/car/clothes/etc.
The book, The Millionaire Next Door, details this well.
ahh upper middle class is.....75-100K got it.
In some areas of the country if you make that little you can't afford rent. The majority of those in those areas arent upper middle class. Its all relative
It's not really all relative. That word is thrown around too loosely. Going by that logic of relative where do you draw the line? Someone can say that the poorest of the poor in the USA make only 8K a year so they are suffering and I can chime in with "well they are making 20 X the income of someone from a backwater third world country so it’s all relative!!."
Point is if that word was used for EVERY scenario that it can easily be used for; there would be no point in having statistics. But that’s not the way the real world works. Fact is when you look at the USA as a WHOLE that income level defines you as being in the upper middle class. It doesn't matter how little that amount buys you in "some" areas of the country.
Quote:
Originally Posted by ginmqi
Income does not define how wealthy you are. I've heard about doctors who make 500k but spend 600k. They are living paycheck to paycheck, no different than a hamburger flipper...only difference is that instead of a Red Box DVD and pizza for the weekend...they can go to the lake and party on their yacht. But come monday, they are both back at square one.
Absolutely correct. That was basically my point of posting that article. Even people with college educations (many of whom have advanced degrees) fail to grasp the simple concept of budgeting.
Even a majority of the upper middle class fall into the "living way above your means" trap. You would think having the mean's to save would compel them to plan for the long term. With habits like this I'm surprised this country hasn't completely fallen off the cliff yet.
That is not upper middle class unless there are no kids in the household. It does tend to irritate me to some degree when you lump together based on income without regard to household size. $80K/yr for a single individual with no children is very different from $80K/yr for a family of five!
$80K/yr for a family of five can actually be quite tight if it comes from both parents working full-time, and thus having to incur hefty childcare and commute costs and making it difficult to find time to cook.
11-03-2014, 07:33 AM
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Quote:
Originally Posted by griffon652
It's not really all relative. That word is thrown around too loosely. Going by that logic of relative where do you draw the line? Someone can say that the poorest of the poor in the USA make only 8K a year so they are suffering and I can chime in with "well they are making 20 X the income of someone from a backwater third world country so it’s all relative!!."
Point is if that word was used for EVERY scenario that it can easily be used for; there would be no point in having statistics. But that’s not the way the real world works. Fact is when you look at the USA as a WHOLE that income level defines you as being in the upper middle class. It doesn't matter how little that amount buys you in "some" areas of the country.
Of course it matters how much that amount buys you. Otherwise you have a statistic that doesn't mean anything.
The term "upper middle class" loses all meaning when it's just a number. Upper middle class is not the same number in Manhattan as it is in Bumblescum Oklahoma or the Congo.
It matters little if the 'well off' do or don't save for a rainy day. They are well off because they already have excess income and/or wealth that they can tap into if the unfortunate need arises.
Folks with incomes below $100K can only become well off over a long time span if they save, do all the right things, don't ever screw up and remain lucky with both their economic choices and timing. Living in a high COL area and having a family makes this all the more difficult.
If that overspending doc is overstretched economically, and does not have reserves, he or she is not 'well off'.
Of course it matters how much that amount buys you. Otherwise you have a statistic that doesn't mean anything.
The term "upper middle class" loses all meaning when it's just a number. Upper middle class is not the same number in Manhattan as it is in Bumblescum Oklahoma or the Congo.
I completely agree. It's absurd to say "It doesn't matter how little that amount buys you in "some" areas of the country", when those areas of the country are where the majority of the $75-100k families are living.
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