What is the middle class?

[Left]

I'd like to see a "yaught" :D

is the crazy cat lady actually "keeping" the cats or are they strays on the streets that lived in the cardboard before she took it?

I wonder if movie stars/musicians and sports athletes consider themselves upper or middle class? I don't see athletes being "cultured" enough to be "upper", and movie stars, well they just have to act like they are to get people believe them. Not sure about musicians though since they are "employed"

Does a lotto winner become "upper" class by virtue of having a large sum of money?

[sbdebeste]

Class is societal and not purely economic. To me, if you're upper-class there almost-by-definition has to be some ostentatious display of wealth. I don't care if you make 10x my salary, but if you still live like I do - sharing 600sqft in a rental with a giant hole in the bathroom ceiling and cockroaches/mice all up in your 30-year-old cabinets - then you're not upper-class. If the most obvious aspects of your life don't inspire materialistic envy then you're probably not upper-class, either.

On the other hand if you personally hire someone full-time in a domestic capacity, you almost certainly *are* upper-class.

[JLee]

Top Class- Mansion, yaught, sports car
Low Class- Homeless, crazy cat lady
Middle Class- Everyone in between. A lawyer earning 500k a year can be middle class in my mind if he lives in the suburbs in a basic house with a Toyota and hobbies include watching kids sports.

The reason I think why the MMM community is mainly upper class is because the lower class people that actually would benefit from living more frugally don't have the time/money to loiter the internet. Most of the people on this website are so sick and tired of their $200k job that they are looking for a simpler life with less pressure and stress. Most people on this forum want to quit their jobs and retire early. I'm a bit different, I earn 50k, still share a rented house with other 20 somethings and am just generally frugal. I like saving money and talking about money.

I have a sports car that's also a Toyota. Where do I fit!? :P

[neo von retorch]

Class seems to be about appearances and entitlement. Attitude and behavior. Not about income or wealth.

[coppertop]

Also people in the USA sometimes move up and down the ladder. Most people who are poor don't stay there, people who consider themselves middle class sometimes end up living in poverty for awhile, and generationaly people will move up and down.


Divorce will do that to a person. I was married to a man who made quite a nice salary; we lived in a 4-BR colonial in a nice subdivision and drove nice cars.  Then he decided he no longer wished to be the breadwinner nor to be the married father of three, so he quit his job and moved out to "find himself."  I had not worked in 17 years, having left the world of work to raise my children.  At age 42, I had to sell my home and rent a not-so-nice house; bought an old Buick and finally found a job making $10 an hour in 1998 - not enough to raise three teenagers on.  I went from living a nice lifestyle to barely making ends meet.  The funds from selling my house had to be split with the ex; and I was awarded the princely sum of $100 a week in child support - which did not arrive regularly.  Even had I diligently saved during the 20 years I was married to him, he'd have walked away with half.  Divorce can be a killer to one's financial situation.  Happily, I eventually obtained a better position and am making a decent living wage now. The kids all attended college and have advanced degrees and all are doing well, so it turned out much better than I thought it would at the time.  It wasn't the end of the world, but you couldn't have convinced me of that at the time!

[Phil_Moore]

The BBC did a Class Calculator test last year which combines economic, social and cultural factors to tell you your class.

http://www.bbc.co.uk/news/magazine-22000973

Obviously not meant to be taken deadly-serious, but there are definitely factors to class in the UK which aren't necessarily income/wealth based. Where you are from, who you know, your accent, whether you are a vestige of aristocracy etc. etc.

[jeromedawg]

First, I don't think $200K/year can be considered middle class - this is in the top 10% of the population.
I would say that middle class should be between the 30th and 70th percentile of the population, give or take.
However, there is no strict definition on "middle class" and therefore constant arguments about this.
Another issue is that middle/upper class can be thought of both in terms of actual wealth (net worth) as well as income. This can really change what you consider each person to be.

I would say that you can have a really high income ($200K/year) and still feel middle class because of several things:
1. You spend all your money on stuff, and there is always more stuff to buy
2. You live paycheck to paycheck, because of spending so much money
3. A lot of your money goes to debt repayment (credit cards, auto loans, etc') which is pretty much money down the drain.
4. You know people that have much nicer stuff, so by comparison, you don't think of yourself as high class
5. Similar to #4, you think of upper-class as truly wealthy people that you see on TV (movie stars, singers, CEOs of large companies) and don't realize they are the top 1% (or less) and instead think you need at least as much to be considered upper-class.

Thanks for the response, I mostly did this to stir up conversation. I would like people's opinions. I want to know what others think and why they think it.

 I would love to see my families expenses but my dad is... Embarrassed. There problem is definitely "stuff." Clothes, coffee makers, computers, iPads, desks (yes for realzies,) I can only imagine the food expenses is astronomical, subscriptions, every channel you could possibly imagine, wifi TV's ect... I can see you all thinking now "how did he think he grew up normal?" Well up until 8 years ago it was a single income household probably around 100k at the time with 6 kids and 12k/year in child support. Looking back I can see how when the second income began to come in it was all eaten up in lifestyle inflation.

LOL! Are you me? You basically described my dad, word-for-word. Well, almost - I think you could lump my mom in there too and it would be done: "Clothes, coffee makers, computers, iPads, desks (yes for realzies,) I can only imagine the food expenses is astronomical, subscriptions, every channel you could possibly imagine, wifi TV's" - yep, sounds about right. My dad has like 2-3 ipads, 2-3 other types of tablets, at least 2-3 desktops, 2-3 laptops, and every imaginable (but useless) gadget you could conjure up. They both have a ton of clothes, probably multiple coffee makers, multiple desks, and half a garage full of crap they both take from the school district [stuff being thrown out or given away] my mom works at. They could donate so much but they really hoard a ton of stuff. My mom is a frugal shopper who buys stuff mostly for the 'game' of it - she'll just buy a bunch of useless trinkets, items, or other things that are generally worthless just because she found a crazy good deal on them and thinks it's a great value to give as a Christmas and Birthday gifts. Both my parents are retired but my mom still does stuff on the side for the school district (and meets the quota on the $40k max you can make as a retired person, for crying out loud). Recently they explained to us and gave us a rough picture (but enough to understand) of their financial situation. Both are on pensions, and are also bringing in a good amount from investments. They are definitely on a six-figure mostly non-working income, which I find to be incredible. No wonder they go and buy so much crap! My mom is cheap on spending but my dad will just go buy whatever so that kind of balances itself out. But I don't think they could support their 'lifestyle' without all the money they make. I definitely don't consider them "middle-class" at this point but growing up I guess I would say we were "upper-middle" - my dad definitely didn't go crazy buying a ton of gadgets while we were growing up. But we did always have gadgets around. Now it's just ridiculous though.
It's just crazy understanding how well-off they are, and really makes me wonder if my own family could get to and sustain that sort of financial freedom. One step at a time, I guess...

[hexdexorex]

Don't know if this went out yet

http://www.economicpopulist.org/content/only-20-are-middle-class-most-dont-come-close-5679?google_editors_picks=true

[darkadams00]

Definitions of class are usually based on:
1) Income stream
2) Income source
3) Income perpetuity
4) Income spent

There are pros and cons to every one of these definitions that would cause a person under one definition of middle class to move to upper class or lower class under other definitions.

Under (1), a person has to make a certain level of income to qualify. But this ignores the fact that a person might face extreme hardship in the event of a job loss or personal tragedy. In the words of Millionaire Next Door, this person is Income Statement wealthy and could face difficulty if a continued stream of income is the only source of financial stability.

Under (2), a person's income is mainly derived from the investment of capital rather than the trade of hours for currency. But this implies a higher class for a person who is willing to live off $20K annually over the person who is still earning $100K annually. Per Millionaire Next Door, this person is Balance Sheet wealthy and is probably more secure than the strict wage earner. Of course, security here is also measured by how close a margin this person cuts his budget with respect to his revenue stream.

Under (3), a person's income is derived from the investment of capital, the hourly wage/salary, or both. Once a person is truly FI, then perpetuity (or a reasonable estimate of perpetuity) is assumed. Again, this might then become a (2) situation, but then the same $20K vs $100K issue recurs.

Under (4), a person's status is defined by his/her possessions and experiences. Since these are somewhat correlated to income, a higher earner in (1) might also be a bigger spender here. This is the criteria the FI/RE folks living off lower income via moderate investments would often fail. They choose not to chase extravagant things and/or experiences, but many people would say those folks are just unmotivated--similar to a "trust fund baby." When a person is significantly younger than typical retirement age and voluntarily lives off an income less than the American median, much lower than their peers, and/or much lower than they would earn if still working, then many would classify that person into a lower class simply because of the apparent lack of spending and the absence of a typical middle-class lifestyle.

Personally, I tend to think that a person who is FI or on track to become FI and can manage daily finances with a reasonable amount of "No" is middle class. If a person is FI and doesn't even have to consider "No" for most decisions, that person is upper class. For me, this bases status on net worth, passive income, and above average ability to spend--all at the same time. Whether a person chooses to work or chooses to spend at that point is really irrelevant because they really do have a choice that is not predetermined by their financial situation.