Net Worth To Be in America’s Upper, Middle & Lower Class

In the United States there is high diversity between different so-called classes of people and their net worth. This is purely based on their finances and how much they have in assets, investments, and cash and not reflecting on how hard they work or how much value they add to the economy.

The net worth numbers in this post are also not the income someone makes, it’s how much of their income they invested, saved, or used to acquire assets. This is the median net worth that people that designate their self in different classes have accrued for an example of what is normal.

Net worth is the total value of every asset that an individual owns subtracted by all their liabilities. Put simply, it’s how much you own versus how much you owe.

Net worth formula:

Assets – Liabilities = Net Worth.

What are the 5 social classes in the US?

During their polls, Gallup has asked Americans to designate themselves into one of five social classes: upper class, upper-middle class, middle class, working class and lower class. These five classes are the way that researchers generally approach their studies and polls. [1]

The average American family has a median net worth of $121,700, according to Federal Reserve data.[2]

What net worth is considered upper class in the US?

The top 20% of Americans are considered upper class with a median net worth of $608,900.

The upper class in the US tend to be less price sensitive to spending money than the lower 80% of Americans. They tend to replace their cars whenever they want, they can fund their kids college education, and they feel no financial pressure on everyday purchases. This net worth level of people are usually great at both earning and investing. They are close to being millionaires but not quite their yet, but have more financial options than other people enjoy. This is the lower level of wealth in the US getting into the top 20% of net worth, but the beginning of the upper classes.

What net worth is considered upper middle class?

The next 20% of Americans from the top are considered the upper-middle class with a median net worth of $201,800.

The upper-middle class in the US are the people that are above average in net worth. Of course, this is based on net worth and not income. Anybody in the US can achieve this level of net worth simply by building their investment portfolio up over a long period of time or through eventually paying off the mortgage on their house.

Getting to this level of net worth tends to be determined by your ability to invest consistently over time and not get too deeply in debt. The speed with which you reach a multiple six figure net worth can depend on your income and discipline.

What net worth is considered middle class?

The middle 20% of Americans are the middle class with a median net worth of $104,700.

According to Pew Research, 90% of Americans think they are in the middle class.

“It’s a sense of security. It’s a certain amount of income. It’s a certain amount of human capital. It’s a certain amount of engagement in your community. All kinds of things make you middle class.” — Jeffrey Wenger, senior policy researcher at the RAND Corporation.

It takes most people time to get to the middle class lifestyle. They must be established in their career and have a good income, own their own home, and get to stage in their life where they are comfortable.

They tend to drive nicer cars, have mortgages they can afford, live in good neighborhoods, and have enough income to go out to eat regularly and take nice vacations.

They tend to have at least a six-figure net worth which is usually due to the equity in their home and their 401k plan at work.

What net worth is considered working class?

The next 20% down, the working class has a median net worth of $43,760.

The working class or lower-middle class have a few differences from the middle class. They tend to not have as much discretionary income and so they don’t eat out as much in casual dining restaurants and tend to rely more on cooking and grocery shopping.

They also don’t tend to take expensive vacations like cruises or travel to other countries. They also tend to rent instead of having a mortgage. Some in the working class also work two jobs to make ends meet or save for their kid’s college.

Most of the working class don’t even know that they are in the lower-middle class because they have comfortable lifestyles overall and don’t want for much. Most of the time their net worth is in their 401k plans.

What net worth is considered lower class in America?

The bottom 20% of Americans designated as the poverty class have a median net worth of $6,030.

A two-adult, two-child household is considered poor if the household income is less than $26,246 a year according to the US Census Bureau. A household with less than $6,030 in net worth is also considered poor.[3]

This is where almost all of us start out at unless we were very financially savvy as kids and saved up a lot of money or are parents gave us great departing gifts as we moved out. Most of those struggling in the “lower class” in this sense have income problems, not spending problems.

Most people at this level live hand to mouth and have paychecks that just barely pay their monthly bills. It is very difficult to ever accrue any level of net worth if you can’t save or invest and can’t buy your own home.

Another term for this net worth level could also be the “broke class”, as it includes college students starting out with little net worth but great income potential and higher income earners who spend all the money they make. 40% of those earning over $100,000 a year live paycheck to paycheck. 53% of those earning $50,000 – $100,000 a year also have just enough income to pay their monthly bills.

People with no extra money will feel the pressure at this financial level. Many others have a zero net worth or even a negative net worth due to debt. Net worth is one of the best measures of personal finance because it shows how good you are at keeping what you earn. Income just shows earning power and not wealth building skills through saving and investing.[4]

Image created by Holly Burns

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