What do you consider the working class?

I think I like Robbie's explanation the best. But I don't like the whole "Class" thing. 

The actual dollar amounts are not really all that relevant. Here is what is relevant to me: 

• If you have an emergency, how long would it take you to recover financially? Would you even feel the hit?
• If you quit your job or get fired, are you in trouble financially? How long before you are?
• How much are you able to save to your retirement, as a percentage of your income and a percentage of your spending?
• How quickly could you get a new job if you need to?
• Of your assets, how long would it take to access them in a liquid form?
• How much access to credit do you have, and how would the repayment of the debt impact your spending and savings?
• What does it cost in your area to live for the rest of your life? Is that the area you want to be?

Another post coming with some rambling.

I've always considered myself middle class. As a kid, I was probably in an upper middle class family, possibly even a wealthy family depending on your metrics. But we vacationed in a cheap area, didn't have cable, ate out once a month at most. I didn't play travel hockey, I played house league, Dad had 10 year old Mercedes and Mom had Hondas and Buick's and Toyota's that she kept for 10 years. The house was nice and big by the standards of the time, but nothing luxurious.

So were my parents frugal, cheap, miserly, or wealthy/upper middle class?  We lived in a very nice area, but there were more expensive suburbs near there. Dad could have joined an expensive country club, but he funded our college educations instead. Other than the HCOL area, we lived like a lower-middle class family, but never had to worry about money... because we lived like that. 

When I was out of college, I lived in a crappy apartment, I made $15 an hour, had a second job, drove a 20 year old car, and didn't have money to do crazy vacations or cable TV or a smart phone. But I did have money to save 35% of my salary to my 401k. Because of that, by some of the estimations above, I'm upper class today - because I was able to save what was a small dollar amount, but a large percentage of my salary from 22-25. Also because of that, I am well into positive net worth if you assume that my house is worth what I could sell it for. But right now I'm trying to figure out if we can afford to replace our AC unit so we can stop using window units. We can't, because the roof needs to be replaced soon and that is something we will HAVE to do. Gonna have to do another summer of window units. 

Also not included in this is your family status. If I made $90k as a single person, that is pretty high up on that class system. $90k for a family of 4 in Chatanooga, TN? Baller. $90k for a family of 4 in Chicago? You're doing fine, but you're not doing great. And if that $90k is 2 parents working making $45k each, that doesn't go nearly as far as one parent making the $90k. I had more fun money when I was making $15 an hour than I do now, making quite a bit more than that. 

What about your safety nets? Mine are my parents, even though I'm 31 and my wife is 32 and we're both currently employed and have a decent emergency fund. They're fine with that. It lets us build our wealth quicker, take more risks and not deplete the emergency fund - we pay my parents back when we can, which is usually pretty quickly. It means that we don't have to dig into the retirement accounts when E36 M3 hits the fan. So we have a huge leg up. I just used it to refinance our house last year. I sold my dad a guitar for $3,500, because I needed more liquidity and couldn't sell some stock because it wasn't vested yet. I bought the guitar back two months later. 

You can't say someone is in any particular class by their income, or their net worth alone, or even combined. You have to look at the whole picture. And it is going to be viewed through a different lens by everyone. 

In reply to mtn :

One of the podcast hosts I listen to talks about having something like social capital or social assets or something like that which kind of lines up with your ability to lean on your folks a little bit.  His point is that because he has family and friends, if he lost his job and got evicted today, he'd have a couch to sleep on tonight.  The theory being that he's "richer" than someone who doesn't have family/friends.  Hard to try to quantify that for sure!

LOL, I just realized I titled this thread 'What do you consider the working class?'  My intention was for it to be 'What do you consider the MIDDLE class?' as the question was structured.  I'll go back and add a comment in the first post.  

iansane said:

Robbie (Forum Supporter) said:

Lower class - $0 net worth (paycheck to paycheck)

Middle class - negative net worth (large purchases not fully paid for yet)

I don't know about these two. Most "lower class" I interact with working paycheck to paycheck tend to credit themselves into oblivion trying to afford nicer things giving themselves a huge negative net worth. 

If you can GET credit, you're at least middle class. 

Regarding the definition, I think Wikipedias definition is pretty accurate:  

The working class (or labouring class) comprises those engaged in waged or salaried labour, especially in manual-labour occupations and industrial work.[1][2] Working-class occupations (see also "Designation of workers by collar color") include blue-collar jobs, some white-collar jobs, and most pink-collar jobs

Robbie (Forum Supporter) said:

iansane said:

Robbie (Forum Supporter) said:

Lower class - $0 net worth (paycheck to paycheck)

Middle class - negative net worth (large purchases not fully paid for yet)

I don't know about these two. Most "lower class" I interact with working paycheck to paycheck tend to credit themselves into oblivion trying to afford nicer things giving themselves a huge negative net worth. 

If you can GET cheap or at least affordable credit, you're at least middle class. 

Modified that, but I agree.

Middle class is where you earn enough money to be taxed to pay for all the free stuff but you earn enough money to not get any of the free stuff.

In reply to ShawnG :

Flounder alert, flounder alert. 

Come on really?

So there is an odd class of people.  Ones who do have a considerable amount of money, but never, ever, ever use it.  It's a pretty small percentage of people- but they do exist.

alfadriver said:

 

So there is an odd class of people.  Ones who do have a considerable amount of money, but never, ever, ever use it.  It's a pretty small percentage of people- but they do exist.

How about this...

Lower Class = Don't have cake and don't eat cake.

Middle Class = Can either have cake or eat cake but not both.

Upper Class = Can both have cake and eat cake.

FWIW, I'm squarely in the have cake but don't eat cake camp...natural born worrier who despite finding good success in life, can't ever seem to really believe in myself.

Cake - cake - cake...must acquire more cake...never enough cake to feel safe.  

alfadriver said:

 

So there is an odd class of people.  Ones who do have a considerable amount of money, but never, ever, ever use it.  It's a pretty small percentage of people- but they do exist.

Potentially a flounder, but you could argue that everyone who has a net worth above a certain number is there based on the percentage of their net worth they spend every year. I don't know where that number is - either the 10's of millions or 100's of millions. 

To put some of the uber-rich class of wealth in perspective, if you made $2,000 an hour - that is $4.16M a year, with 40 hour week - you would have to work for 240 years to accumulate $1 Billion dollars - and that is assuming you never spend any of the money, or pay any taxes. If you invest all of it at 7% returns, it takes 43 years to hit $1 Billion. 

There is some wealth that is just unreachable even for the most ridiculously liberal view of the American Dream.

Here's another thought I've had I'd like people opinion on.  I think one of the reasons that the vast majority of Americans say they are middle class may be that they judge themselves, in general, in reference to those they see around them and interact with.  On the whole peoples friends, neighbors, colleagues etc. tend to be in similar socioeconomic groups.  So if someone lives in an area where $100k buys a median house, and they and they're neighbors all drive on average a 10 year old pick up truck they will look around and say 'I'm broadly the same off as everyone around me, therefore I'm not an outlier so I must be middle class'.  Someone who lives in a $500k median house area and everyone in their community leases a new Merc/BMW/Tesla/Caddy every three years will probably look around and say something similar and come to the same conclusion.

On the credit comment, I agree with mtn (dude, can you at least capitalize your screen name!?!?), anyone can get credit, but your 'status' (class/cast/branding etc.) will differentiate between that credit being a pay day loan at 370% APR (Just looked, that's the average in Michigan), a 25% APR credit card or banks bending over to offer you 0% credit cards, super low interest loans and calls asking you to invest your money with them.

On a personal level I guess I'm just as confused and conflicted as society in general.  I consider myself upper middle class, as a kid growing up I thought the same thing, but if I stand back and look at things objectively I am in a very very different situation to that which I grew up in.

There are a couple of articles in the press that have stuck in my mind over the years.  There was one titled 'working class millionaires' or something that interviewed several people in 'Silicon valley' who had been through mid level positions in a few start ups.  Sure they were living in million $ houses and driving new Bentleys, but as they were still working and hadn't hit the big IPO lottery yet so they didn't consider themselves wealthy despite their apparent success.  Another was on the BBC years ago talking about working class pride, they were interviewing people in Blackpool (a blue collar resort town from the pre cheap air travel days) where they interviewed some B and B owners and other small mom and pop type businesses.  Some literally drove Rolls Royces (not in the GRM tinkering with a classic way) but proudly declared they were still working class at heart.  People can wear what others may consider a pejorative as a badge of honor, and that's what makes humanity great, no one size fits all.  

Shouldn't have opened this thread. Reconfirming what I already know: I'm poor.

In reply to mtn :

I'm not even talking about them.  I personally know of a person who lives well under their very meager SS checks- in a very tiny home.  Would not pay for simple home improvements, like leaking plumbing, and holes in windows.  No new clothing, in spite of holes.  Not even wear new gift clothing.  Live well under the poverty level.

And yet had more than enough money to live comfortably.  Quite comfortably.  

I'm sure this is a very small part of the population, but it is curious.

Rich people who can never have enough money is a different abnormality.

In reply to mtn :

We've had similar discussion to this on here before.  I think it was something like 'what's you eff it I'm done' figure to retire and walk away.  I've always believed it's around 20 times what you are happy to live on annual.  That much should allow you live off the interest (including annual COL increases) without ever touching the principle.  For some people that may be $500k, for others it may be $5m.  

In reply to mtn :

Man I wish I'd have had someone like you in my friend circle when I was younger. I wasn't interested in the advice of boring old people, but I might have listened to someone in my own age group. 

In reply to mtn :

The classic "lower/middle/upper class" designation comes from putting a group of people into a bell curve by income. Problem is, income and wealth are not 'physical properties' (like height or weight) and therefore do not follow the traditional bell curve. The people at the top of the income scale aren't "a few inches taller" than average, they are hundreds or thousands (or millions) of multiples of the average. 

Treating a property of a population like a bell curve and assuming that it follows bell curve statistics when it doesn't is a huge logical fallacy that many people fall into (and one of the main reasons that the traditional income classes are mostly useless). 

Adrian_Thompson (Forum Supporter) said:

In reply to mtn :

We've had similar discussion to this on here before.  I think it was something like 'what's you eff it I'm done' figure to retire and walk away.  I've always believed it's around 20 times what you are happy to live on annual.  That much should allow you live off the interest (including annual COL increases) without ever touching the principle.  For some people that may be $500k, for others it may be $5m.  

This is at least my answer. 20x what you need not what you want. Even I put myself in the "middle class" because of the HCOL area I am in but by any and all metrics I am not. 

Its all relative though. I have low 8 digit net worth friends who think they are just getting by in reference to friends who are literal billionaires. 

The old joke answer of what you need to make or have saved is 3x what you have now 

RX Reven' said:How about this.

FWIW, I'm squarely in the have cake but don't eat cake camp...natural born worrier who despite finding good success in life, can't ever seem to really believe in myself.

Cake - cake - cake...must acquire more cake...never enough cake to feel safe.  

That's me

alfadriver said:

In reply to mtn :

I'm not even talking about them.  I personally know of a person who lives well under their very meager SS checks- in a very tiny home.  Would not pay for simple home improvements, like leaking plumbing, and holes in windows.  No new clothing, in spite of holes.  Not even wear new gift clothing.  Live well under the poverty level.

And yet had more than enough money to live comfortably.  Quite comfortably.  

I'm sure this is a very small part of the population, but it is curious.

Rich people who can never have enough money is a different abnormality.

That's my Mom, though she's not that extreme. She spends where it needs to be spent, but does so very frugally, in a very tiny home. She cannot spend all of what she gets from her government pension, and it ain't much.

Defining the middle class is difficult without strict criteria, but even then, it's a moving target, in part because of what I call the increasing affluence of society. When I was a kid specialty stores and products were for the wealthy, and only the wealthiest drove cars like Mercedes. Now high end specialty products are every day, and production workers in the factories I work in live in 3000 sq.ft. homes and drive Mercedes

In reply to Adrian_Thompson (Forum Supporter) :

Feel free to take it that way.

Why does everything have to fit in a convenient little box?

If you think you're poor, congratulations, you're poor.

We were poor when I was growing up but I had no clue, I only think that way now because I realise how little we had. I was generally a happy kid though.

Now, my bills are paid, food is in the fridge and the lights are on.

Globally, I'm in the 1% and so are all of you.

Some of these brackets shock me. I would say (for individuals, in a moderate cost-of-living area):

• Poor < $15K/yr
• Working poor $15-25K/yr
• Middle class $25k-75K/yr
• Upper middle class $75k-250k/yr
• Wealthy over $250k/yr and or assets over $2mil

Edit: Reading more carefully I see some of the huge brackets were for couples so they're reasonable.

"We finally got a piece of the pie"

ShawnG said:

Middle class is where you earn enough money to be taxed to pay for all the free stuff but you earn enough money to not get any of the free stuff.

Canadian perspective. You're not wrong

Robbie (Forum Supporter) said:

In reply to mtn :

The classic "lower/middle/upper class" designation comes from putting a group of people into a bell curve by income. Problem is, income and wealth are not 'physical properties' (like height or weight) and therefore do not follow the traditional bell curve. The people at the top of the income scale aren't "a few inches taller" than average, they are hundreds or thousands (or millions) of multiples of the average. 

Treating a property of a population like a bell curve and assuming that it follows bell curve statistics when it doesn't is a huge logical fallacy that many people fall into (and one of the main reasons that the traditional income classes are mostly useless). 

Yep. We're talking about this as if it is a bell curve. In reality, it looks like a very, very steep quarter-pipe.