This is the pretty standard upper middle class lifestyle, would just say the majority do it through debt and their personal balance sheet isn't that impressive. A lot of employees in the 300-500k range in major metro areas fall into this category with minimal net worth accumulation. I have a lot of college friends in this group. Becomes ideal if you own a business that generates more or big liquidity sell event. If an employee, would be beneficial to delay a bit and build that financial foundation first. It is a nice lifestyle, and sounds like you have no problem affording it responsibly.
At what point does money become irrelevant?
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Exactly. Hard for people to understand unless they live it. $10k/m seems excessive to some where it's almost like living normally to others.
I'll have all liabilities paid off by this time next year. Not trying to go into this depression with liabilities.
If I were to budget I would get those cars paid off asap. Utilities/insurance/gym/gas seems expensive but I could see it being that much.
Dining out is very high. Daycare I'd just leave my kids with my parents. Luxuries, ok I guess. Total is $11.5k and could be reduced to $6k, which is reasonable. That's just me though. I think if I were to do it it would be..
Cars - $0
Utilities/insurance/gas/gym - $750/month
Dining out - $250/month
Day care - parents, so $0
Luxuries - $500/month
I'm actually a little surprised you're only spending this much as I thought your NW was around $20 mil? Or maybe I misunderstood.
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cars will be paid off soon was still buying more assets during that time.
dining out also includes ordering in. Probably about 3-4x a week and sometimes I pay for friends.
day care is a must as I don’t have family around.
net worth is not that high currently, although there were opportunities. That was what my recommendation of what your net worth would need to be to not be employed and live an upper middle class life.
if you’re employed, $300k+ would be enough to live an upper middle class life.
also, fyi - people with money typically aren’t spending as much as you think. There’s typically a phase where you act stupid. Once that phase passes or wears out, you settle down. That’s what happened to me and many that I’ve seen/know.
I look and dress like the average joe and purposely don’t try to stand out too much. Not trying to get robbed or targeted as it has happened to friends.
Once you get to the level where you are considered "rich", you realize there is very little upside to looking like it to the public. If you own a business, your employees resent you and want more money, your clients think you are ripping them off, the people who are attracted to that are either users, fakers or criminals. Myself and a couple of friends rented some high end sports cars a while back on vacation and all the attention it drew was not for me. Could not imagine doing that every day. The people who look "rich", 99% of the time are not. Of course there are exceptions, but just anecdotal observation
Do you live in the suburbs or the city? I actually enjoy dressing nicely and wearing a nice watch, but I never wear my rolexes when running errands or anything. I'm surprised your friends have been robbed for looking well put together. Thought that stuff typically only happens in democrat run cities where there is basically anarchy.
Wonder what you mean when you say someone looks rich. Are we talking about someone who wears well fitted clothes without brand labeling, or what?
EyeBRollin
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Weird comment. No one bats an eye at looking “put together in NYC.”
My wife and I are on the upper end of middle class >$150K and our monthly expenses are less than half that. And I don’t live in a cheap area. $2K month car note? Insurance is $200 / month. And how does one spend $2.5K a month shopping and dining out with an already $1K grocery bill?
I've worked sales in NYC for 7 years. Worked in business tech in Silicon Valley/SF for 5 years. Currently left and moved somewhere to red state burbs.
Got into a fight with homeless in SF. My friend was robbed at gunpoint in Cupertino (silicon valley) and they stole his wallet/rolex. This was infront of tens of people. Another friend's house had attempted burglary in Palo Alto. My one friend has the lamborghini SUV and he doesn't even drive it locally as he doesn't want to be followed home so he mainly uses it to pick up friends from the airport lol.
It's not even looking rich anymore. Those looking to rob know which areas to go and how to scope out places. In silicon valley, my friends and I went to a local plaza and were eating at a really nice and popular sushi place. His porsche was broken into and they went under the passenger side seat to find his laptop. They broke the window. Usually they have a car driving around slowly pretending to look for parking with really dark tinted windows and another person will hop out and scope out the cars. When they find one, they make sure coast is relatively clear, smash and grab. They will do this infront of many people as well. It doesn't need to be an empty place.
Most of the time, you're fine but you just need to be unlucky and at the wrong place at the wrong time.
Car - luxury cars (its 2 cars) and I put decent size down payments as well to keep payments around $1k/m.
Groceries - When you have a kid, grocery bills tend to go up. We like to buy a lot of fresh things (fruits/veggies/meats), plus the kid just throws away a bunch of the food anyway. I would say normal grocery store shopping is like $200+ a week ish and costco is probably $400/m. Then you have diapers and wipes which probably brings everything closer to $1.5k
rough rounding in these calculations but should be fairly accurate ball park.
Dining out/luxuries - I collect guns, watches, eat at nice restaurants, drink the most expensive wine (my current area doesn't have crazy expensive stuff so its like $100 wine), starbucks, etc.
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I know friends that live upper class life and have the money. They still look and dress normal. Have $40k - $100k watches, drive super cars, fly first class, etc. Could have been me as well but made some bad decisions during my partying phase.
Currently working on my next project, so if ya'll know any back end engineers, LMK!
I used to think in my 20's that $200k+ was upper class. I make more than that and can tell you it's not.
Have a friend that makes almost $700k/year. I would consider him barely upper class. He takes home I think $35k/m ish. Spends about $15k/m. Probably would still need to fly economy to travel overseas. No luxury cars, has a minivan and drives a beater lol.
Granted he lives in LA.
Have a friend that makes almost $700k/year. I would consider him barely upper class. He takes home I think $35k/m ish. Spends about $15k/m. Probably would still need to fly economy to travel overseas. No luxury cars, has a minivan and drives a beater lol.
Granted he lives in LA.
EyeBRollin
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It is upper class. $100 wine and $2,000 / month in car payments with a down payment are upper class. I don’t know any middle class folks doing that.
This is a complicated and nuanced question, depends how you calculate it, but do not consider 200k upper class in a major city. You aren't living in the best areas and you have to run a really tight budget. Maybe how it has been technically defined but all the assets rich people own has gone up way out of reach of someone starting to make 200k now
Put together and having 10-100k on your wrist is completely different. Can vouch for all in the crime California, I live there
No, that is how I dress. I wear nice dress clothes and dress shoes every day. 99% of people have no idea what my dress shoes cost. I tailor a lot of it. I was more referencing the 150k+ autos, designer clothes with name brands plastered everywhere and 10k+ watches. Something people who are not rich would assume rich people wear
EyeBRollin
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$200K is the top 5-10% of annual earners even in a major city. That’s just the statistical reality. By definition that is not middle class. Middle class would be the 25-75 percentile, maybe an extra 5% in either direction for leeway. The median household income in NYC area is still only about $70K.
Granted, $200K is not “fvck you money” which is probably what people associate with rich and I get that is the basis of this conversation. But let’s try to keep things in perspective. To 98-98% of people living on earth, having $150K worth of luxury cars in the driveway financed at $2,000 / month and $40,000 watches on the wrist is just obscene.
People in the top 5-10% of earners do not need to have a “tight budget,” just need to be more objective about lifestyle inflation.
Would say $200k is still middle class and not upper middle class. This is 2016 income not adjusting for inflation. $200k still seems middle class here, especially if you're close to a major city.
Are you part of the middle class? This calculator can tell you
What it takes to be considered middle class in every state.
www.hellawealth.com
Average car payments - that's $700 over 70 months to be exactly in the middle.
Average Auto Loan Payments: What To Expect | Bankrate
Understand the current state of auto lending with a full rundown of average car loan payments by credit range for new and used cars.
www.bankrate.com
EyeBRollin
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Did you not see the data? It says median HH income is $70K, and no where in any state in the table does $200K fall in the range of middle class. $200K is top 10% income every where in the United States.
This one is shocking. People are paying $700 / month for 6 years just to drive a new vehicle? This country really has gone down the drain.
Need to factor inflation and adjust for it as that data is from 2016. Average home prices increasing by 50% since 2016.
There's little real "middle class" left in America. This is also misleading when you look at averages/median. Makes people feel better when they're in better ranges among the population but policies in America are crushing society to the point where it's the rich and poor only. Statistically, if you feel like your in the upper middle class but can't drive a nice car, can't eat at nice restaurants, can't afford nice things every now and then, then are you really at approaching the upper end of American of what people envision as the American lifestyle?
You break into the upper class of being wealthy when finances aren't an issue.
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I see a family income of $150k as just enough to live a normal life considering the standard of living in most metro/suburban areas. Hard to save enough up to be wealthy to enter upper class. Budgeting is an issue and needs to be closely monitored. Vacations are normal in the $2k-$3k range. Middle class americans used to be ballers and travel the world but middle class now would be hard pressed to make a trip with the family overseas. The definition of what you're referencing is enough to live normally, as the normal is a much lower standard than what it used to be.
Different ways of seeing it. Governments are always changing definition of almost everything to fit their narrative to control the populace. The "middle class" definition is no different from the jobs numbers, inflation, etc.
The majority of countries don't have a middle class. Just the rich and the poor, and we're heading that way.
EyeBRollin
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2016 prices to 2023 is closer to 30%, not 50. For a family of four that is still at the upper extreme in every state.
Sorry but that is just false. Don’t conflate average with median they do not represent the same values. Average is inaccurate as it includes outliers such as billionaires. Median means the point at which 50% of incomes are higher and 50% are lower.
The real inflation is the American lifestyle. Driving a nice car has nothing to do with being middle class. In 2023, most average earners in the USA have a smart phone and computer with internet access, a vehicle, access to grocery markets, a place to stay, and cable or streaming options. Yet middle class is having a brand new Mercedes in the driveway?
Finances are not an issue at $200K+ income. The disconnect is you are defining class in discretionary spending rather than “essential” spending. Middle class families live in middle class neighborhoods. The kids go to public schools. They drive average vehicles. They may go to Disney or on a road trip once a year.
If your definition of middle class is international vacations, private schools, luxury SUVs, country clubs, and cul-de-sacs, yes you will not afford it on $200K. Problem is, none of that stuff has ever been “middle class.”
This is ridiculous and very area dependent. 200k in NYC, DC, SF, LA is not much. I am not referencing the statistic salary numbers but quality of life/what you can afford in different regions etc. You are no where close to living in the nicest areas and aren't able to live a lifestyle that would previously would be considered upper class in those cities. 200k in middle america is very different. If you wanted to live in the nicer areas in NYC, on 200k you would absolutely be on a tight budget if you could even afford it at all.
200k living in a average neighborhood in NYC in my opinion is not upper class. Don't really care of the distribution numbers. Has to do with net worth as well. If you do not have a 7 figure net worth, even more in major cities, you arent in that group either
Are You Rich? U.S. Net Worth Percentiles Can Provide Answers
See the U.S. net worth percentiles and what Americans think is the magic number for them to be considered rich.
www.kiplinger.com
- People with the top 1% of net worth in the U.S. in 2022 had $10,815,000 in net worth.
- The top 2% had a net worth of $2,472,000.
- The top 5% had $1,030,000.
- The top 10% had $854,900.
- The top 50% had $522,210.
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