We've got the poor, the middle class, the upper class, and the rich. This article looks at the definition of upper class based on income and several other factors.
When you think of the words “upper class,” what do you imagine? I often conjure some passengers sitting on a British Airways flight. They are literally sitting in a section of the plane called Upper Class. Weird.
Let's be frank. Upper class has a somewhat arrogant tone to it. I don't know anybody in America who uses the term upper class when speaking. I don't know any socially normal person who calls himself upper class either. Perhaps it's a European thing.
In America, we use the term “mass affluent” or “aspirational class” instead of upper class. Or we just say middle class. Nobody in America would ever publicly say they are upper class unless they want to get beat over the head. Instead, people would much prefer to say they are middle class.
Middle Class Is The Best Class, Not The Upper Class
The best class is the middle class because you can blend in. Nobody attacks the middle class for making too much money or being a burden on society. The majority is the middle class, which also provides comfort in numbers.
As a middle class citizen, you also don't get taxed as much. You generally also get more government support. The middle class earns somewhere between +/- 25% of the median household income in your city. Nationwide, the median household income is roughly $65,000. Therefore, the middle class earns somewhere between $48,000 – $81,000 a year.
We can consider the poor as anybody earning somewhere around the Federal Poverty Limit per household size. I say anything up to FPL +25% is considered poor. If you are poor, I hope you subscribe to Financial Samurai and other sites to help you get out of poverty.
Now that we've defined poor and middle class, let's look at the definition of upper class.
Definition Of Upper Class Based On Income
In a 2018 report, the Pew Research Center found that upper class Americans grew their income faster between 2010 and 2016 ($172,152 to $187,872) versus middle-income Americans ($74,015 to $78,442).
The report states, “the wealth gaps between upper-income families and lower- and middle-income families in 2016 were at the highest levels recorded.”
This is obviously true since we've had a massive bull market since 2009. It is especially true the upper class has gotten even wealthier post pandemic. Upper-income families likely worked at faster-growing, more profitable companies that pay higher salaries.
Further, people who have been regularly investing since 2009 have seen their wealth soar. The S&P 500 and real estate are both up tremendously.
Those who hoarded cash or simply spent all their money did not see their wealth grow nearly as much. Only recently, has median household income reached new highs. It went nowhere between 2000 – 2016. In 2021, the median household income is roughly $68,000.
An upper class income is usually considered at least 50% higher than the median household income. Therefore, an upper class income in America is $100,000 and higher.
However, an upper class income also depends on where you live. In San Francisco, earning up to $115,000 for a family of four qualifies you for subsidized housing!
Income By Household Needed To Be Upper Class
According to the Pew Research Center, below is the income by household necessary to be upper class. The greater your household size, the greater the income needed.
- $78,281 for a household of one
- $110,706 for a household of two
- $135,586 for a household of three
- $156,561 for a household of four
- $175,041 for a household of five
In other words, to be upper class, you need to make at least $75,000, the threshold where researchers discovered in 2012 making more does not necessarily increase happiness. Adjusting for inflation, that threshold is closer to $100,000 today.
To play it safe, to be considered upper class, your household should make at least a six-figure household income. Inflation really has a sneaky way of catching up to all of us. I believe most Americans can make a six-figure income at almost any age.
Of course, making six-figures in Des Moines is going to go a lot farther than making six figures in New York City. I've written extensively about how households may need to make $300,000 to live a middle-class lifestyle in big cities today.
Therefore, it's up to you to adjust your household income figure accordingly. If you can make a similar amount of income and relocate to a lower cost area of the country, then this is something to consider as well.
Upper Class Is Relative To The Median
Everything is relative when it comes to finances. Pew defines the upper class as adults whose annual household income is more than double the national median. In 2022, the national median household income is around $75,000, up from $68,000 in 2021.
Therefore, as a whole, the typical upper-class household in the new decade has a median household income of over $130,000. $130,000 is a good household income amount. However, it's not a high enough income to be considered rich.
To be rich, a household will likely have to make multiple six-figures a year. After all, the next level above Upper Class on a British Airways flight is Rich Class! No, I'm just kidding. British Airways also calls First Class, First Class.
Other Definitions Of Upper Class
It would be a shame to only define upper class based on income. We can also define upper class based on behavior, background, and status. However, people who view upper class mostly based on status are likely just snooty people just looking to protect their own status.
Besides defining upper class by income, we can also define upper class by:
- Net Worth
- Education
- Occupation
- Culture
- Travel
- Language
- Fitness
- Creativity
If you have a master's degree or higher, you may be considered upper class. Around 13% of Americans have master's degrees and only around 2% of Americans have doctorate degrees. In comparison, roughly 35% of Americans have undergraduate college degrees. All societies tend to respect scholars.
If you have a net worth 50% higher than the average American, you can be considered upper class. After all, it's not so much how much you earn but how much you keep.
If you know two or more languages fluently and have traveled to at least five countries, you may be considered upper class. Roughly 60% of Americans do not own a passport.
If you are in good shape, perhaps you can be considered upper class since 60%+ of Americans are overweight. Living longer is generally an attribute of the upper class. Although, extremely wealthy people die young as well e.g. Steve Jobs at age 56.
If you don't qualify for student loan forgiveness or need student loan forgiveness, you are probably upper class as well.
Finally, if you are a very thoughtful person who is always looking out for others, I say you should be considered upper class. The average person is too selfish or too busy to help other people. Being a kind person who also stands up against injustices is my favorite definition of being upper class.
Upper Class Is Also A State Of Mind
The definition of upper class can, therefore, be a combination of income, net worth, occupation, education, behavior and a variety of other factors. Everything is relative to the average or median.
I believe a big part of being upper class is having more freedom and happiness than the average person. At the end of the day, your goal is to have enough money to be happy. If you have enough money that's generating some passive income to allow you to take weekday siestas or do as you please, you are probably upper class.
But if you proceed to combine your elevated happiness and freedom and mistreat other people, you immediately get downgraded to low class.
I'd love to retire the definition of upper class from now on and just use the term “mass affluent.” Mass affluent sounds so much better in this uncertain world. To say or think you are upper class is a surefire way to a demotion.
Suggestions For Getting Into The Upper Class
1) Invest In Real Estate To Be Upper Class
Every mass affluent person I know invest in real estate in some form or another. With the migration to lower cost areas of the country thanks to the rise of work from home, real estate in the heartland looks attractive. You can earn higher cap rates than coastal city real estate.
Real estate is my favorite way to achieving financial freedom because it is a tangible asset that is less volatile, provides utility, and generates income. Stocks are fine, but stock yields are low and stocks are much more volatile.
The combination of rising rents and rising real estate prices builds tremendous wealth over the long term. Meanwhile, there are more ways to invest in areas of the country where valuations are lower and net rental yields are higher thanks to crowdfunding.
Take a look at my two favorite real estate crowdfunding platforms.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. The real estate platform has over 300,000 investors and manages over $3.5 billion.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends.
I've personally invested $810,000 in real estate crowdfunding across 18 projects to take advantage of lower valuations in the heartland of America. My real estate investments account for roughly 50% of my current passive income of ~$300,000.
2) Stay On Top Of Your Money Like A Hawk
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Then make sure you run your financials through its Retirement Planner to make sure your financial future is on track. There's no rewind button on the road to financial freedom. Best get it right the first time!
Subscribe to the Financial Samurai newsletter here. The upper class love to educate themselves as much as possible about life and their finances. The more you read about building wealth, the more you will take action.
3) Read The Best Personal Finance Book To Enter The Upper Class
If you want to reach upper class levels of wealth, purchase a hardcopy of my Wall Street Journal bestseller, Buy This, Not That: How to Spend Your Way To Wealth And Freedom. BTNT is jam-packed with all my insights after spending 30 years working in, studying, and writing about personal finance.
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Upper Class Definition By Income And Net Worth is a Financial Samurai original post. I've been writing about achieving financial independence since 2009. Sign up for my free weekly newsletter here.
Literally have never used the terms “mass affluent” or “aspirational class”
Labels…. why?
Live your one time life the best you can. Be responsible, accountable, respectable, happy, and ever improving.
I’m in the “upper class” but the low end. I think it’s definitely true that the rich are upper class but not everybody in the upper class is rich. I also agree with people who say there is more to being upper class than just money. A lot of it has to do with attitudes and social etiquette.
I personally prefer the terms Affluent and Wealthy as opposed to Upper Class and Rich. I would privately think of myself as “upper class” but wouldn’t ever say that in public because it sounds… kind of mean. I would personally identify as “Entry-level Affluent”.
I also think that wealth is a lot to do with freedom. Like if you make half a million a year but your’e a stressed out CEO working 80+ hours a week in an office and never enjoy your life, I think you’re less wealthy than someone making $80k-$100k a year who works from home as their own boss doing something they love, only have to work 20 hours a week to get that income, and can wake up whatever time they like and have full control of their own schedule and can do whatever they want more or less with their day.
Very interesting point of view, I’ve learned a lot, thank you for sharing!
I find it rather ludicrous to continually attempt to redefine labels such no one’s sensitivities are disturbed. “Mass affluent” is a ridiculous label that most people would not comprehend. “Entry-level affluent” is also a confusing, non-descript label. However, the term “upper class” comes with a set of negative assumptions, yet “upper income” has been around for many years, is more accurate, and would be less offensive to our delicate new generation, not that I care whose sensibilities I violate, as no one tends to be concerned if their choices offend older Americans.
Ok boomer
Spoken like a true Millennial. Because after all, it’s all about you. Even though Mommy and Daddy coddled you your whole life whenever you cried (at which time you were still in your 30’s) and the world owes you everything.
Spoken like a true closed-minded Boomer.
Labels/terminology changes/updates over time as society changes. Do you still use racially offensive labels that used to be used back in the 50s and 60s? Of course not, because society has changed and deemed those terms not acceptable.
While some new labels/terms are definitely confusing [I constantly have to lookup ‘SMH’ or ‘TLDR’], ‘entry level affluent’ seems pretty obvious.
While the above commenter who replied “Ok Boomer” is also closed-minded and lacks class, same as the OP, older Americans aren’t concerned if their choices/actions offend younger Americans.
Plenty of Boomers [and generations right after Boomers] think it’s all about them as well.
I like the terms Affluent and Wealthy instead of upper class and rich. I would privately THINK of myself as upper class but wouldn’t SAY that to anybody because it sounds snotty. But I would probably use the term Affluent to describe myself, but not in front of anybody making less than me. You can be Affluent and not have achieved wealth yet, but all wealthy people would also be affluent (but not all affluent people are wealthy… when we’re using money as the barometer and not our “feelings”.)
But I do agree that freedom is wealth so… if you made $300k a year but worked 80 hour weeks and didn’t have any free time and had to be up super early and in an office in many ways you are much LESS wealthy than someone who makes $80k a year, works from home for themselves doing work they love, only putting in 20 hours a week or so, and waking up whenever they want. So definitely lifestyle in the sense of time freedom IMO should be a big part of it as well.
“As a middle class citizen, you also don’t get taxed as much. You generally also get more government support.”
I would argue you get much less support than people in poverty because you “make too much” and you pay more taxes than the rich because you have less loop holes to take advantage.
(I’m behind on my blogs) Sam – it’s Virgin Atlantic that have a product called “Upper Class”, not BA. Virgin don’t do First Class, so the concept was something that was somewhere between Business and First, at the price of business class. It used to be, now the Middle East airlines in particular have caught up and offer a better overall experience business class experience. Virgin’s Upper Class is still typically better than BA’s Club World though.
In the UK, class is not about money. It’s about family, breeding, background, education, and attitude. You can have lots of money but no class. And vice versa.
We moved into a private condo complex in SoCal that has 2 tennis courts which were not closed during the lockdown. For me, that was priceless…especially when all the clubs in San Diego, including the one in carmel valley where I taught all shut down.
In the worst of times wealth is not $, but rather access to the things you love. A public park next door, a few connected hiking trails to walk freely, or a few moments of peace if home-schooling kids.
Middle class with proximity to your life’s joys and passions is superior to an Upper class lifestyle for me from a utility point of view. I see no point to be locked inside a 10 acre prison only to experience the outside world by digital proxy.
“Health is Wealth”, my friends: tennis-bargains.com/2020/03/health-is-wealth-find-internal-strength.html
I never realized that about Virgin and British Airways and the Upper Class! Ha you’re right about “Nobody in America would ever publicly say they are upper class unless they want to get beat over the head.”
I’m surprised on the $78,281 upper class level for a household of one. I would have expected it to be a lot higher. I don’t think anyone in a coastal city would consider themselves upper class unless they made well into the six-figures.
I believe a societal class has too much emphasis on spending instead of earnings. For instance, most of our neighbors are members of a county club. I love golf, but would never fork out the initiation fee and monthly dues. Somehow we are a lower class to these people even though we have high earnings, degrees and net worth.
There are way too many negative connotations with the word upper class. Even if you qualified for inclusion most would not want to broadcast it.
I don’t think income is a great barometer. Doctors make good money but I would not consider it a guarantee to wealth and upper class status. Majority of doctors succumb to lifestyle inflation and a lot live paycheck to paycheck despite that paycheck being as high as it is. Couple that with late start to earning and student loan debt to get there and it takes years after finishing residency just to get back to broke.
I like terms that refer to net worth like high net worth or ultra high net worth individual.
Great call out that “wealth” can be defined as more than just money. Giving back is an important part of the American fabric an is more valuable than ever.
I would suggest dropping the “Mass” and simplify to Affluent, this one word says it all.
I’ve always preferred the terms middle class, investor class, and rich. Upper class has an air of thinking you’re ‘better than.’ Investor class just means you have figured money out and never really worry about it. The investor class is free to focus on improving their community through businesses or non-profits without always thinking me me me.
I like the saying “the difference between being broke and poor is that broke is just passing through.” Those at the affluent end of the spectrum definitely have a different mindset. I once met a woman at a board of directors event who was describing how she put every penny she had into launching her business because if it failed, she could always just go make more.
Wise words! Yes, Investor Class is a better term as it also describes an action.
Loved loved your definition Sam!!! I think you hit it spot on especially about being kind to others- SO true about people being too busy to help others. Totally agree about the healthy lifestyle also. I’ve seen it with our very educated/mass affluent friends. Well done once again.
Thanks Christine. It makes me so happy when people are kind and when people take the time to listen and help out.
When you go on some places like Twitter and it’s just a crap show a lot of times with people arguing and being offensive all day long.
It’s rare that you’ll have this type of conflict in the comment section here. And if there is something offensive, I’ll just delete it.
Thank you for including different household sizes in your statistics. The size of one’s family or household makes a big difference. According to your stats, I would be well into upper class if I were single and without kids. But considering my family size, I don’t even make it to 400% of the federal poverty level.
The good thing is, children are priceless. So if you have a large household, you might be one of the wealthiest people in the world!
This was a fun read. I really hadn’t considered which class I fell into since I always feel poor based on our extreme savings rate. So, I looked it up and my earnings puts me in the top 1% for my city and in the top 6% for my state. Back in 2016, when I started reading FS, I was in the upper 26%. The jump could be attributed to two work promotions and educating myself financially. I believe in the saying that “it takes money to make money.” Since 2016, we’ve turned an underwater condo into a very profitable Airbnb, invested in stocks for the FIRST time at age 36 (hard to believe!), bought a boat to rent out, purchased mortgage notes, started an events based flower business, started an Etsy shop, and are on our way to purchasing the next rental property with all cash next year. It also helped that my husband’s home was paid off when I moved in with him. The speed of our net worth growth would not be possible without the excess cash to invest. I remember when my husband was a property manager for a quadriplex where the families were often late with rent because they were living paycheck to paycheck. Since they never had any money left over, they didn’t have a bank account. So every month, my husband would need to go to the quadriplex to pick up the rent, in cash. On top of this, since they didn’t have a bank account, they had to pay fees to cash their checks! One time, my husband drove the tenant to the bank because she wanted to pay rent but car trouble prevented her from going to cash the check. It would have been very difficult for those folks to make any significant strides in their finances. I feel very fortunate to have ended up where I’m at in my career even though I didn’t set out with any grand goals for my career when I finished college.
Congrats for your progress! And I hope that Tenant was able to open a bank account and start saving and investing
Thanks, Sam. My husband is no longer a property manager so I don’t know the status of the tenants. On another note, the first stock I purchased was NVIDIA and would you believe that it is up 297% since 2016?! I remember one of your posts talking about trying to predict the future. I was/am predicting that NVIDIA’s components will be used in self driving vehicles. I suppose I got lucky because their stock really picked up when cryptocurrency became popular and their processing units were used to mine the coins. In addition, NVIDIA’s technology powers two-thirds of the world’s 500 fastest supercomputers, including eight of the top 10. And it just keeps getting better. Just today, it was announced that NVIDIA and the University of Florida would be partnering to incorporate Artificial Intelligence into ALL of its curriculum, the first university to do so. Imagine years from now when those students (~50,000 a year), even if just a fraction of them, go out into the workforce and influence managers or become managers themselves with the authority to make purchasing decisions whereby their companies invest in NVIDIA components. Time to buy some more NVIDIA stocks!
“The average person is too selfish or too busy to help other people.”
Actually, poor people give more proportionally (usually in-kind rather than cash) than middle or low-upper class. When nobody around you has money, social ties/exchanges are life-and-death. This willingness to help even to their own detriment is one reason why it’s harder for them to climb out of poverty. If they don’t help out, they are scorned as a free rider.
You are absolutely right. The less fortunate give far more, as a percentage of their income, then the rich. I’ve always been in awe of that.
I’ve noticed the same thing, time and time again.
I’ve seen upper class and rich donate too, but there is almost always a tax break involved.
A middle class man donates because his hearts tells him to. A rich man donates because he gets a tax break.
this attitude is why rich people feel less and less inclined to donate.
I think you got British Airways and Virgin Atlantic mixed up. I would pick VS Upper Class over BA Club World any day off the week. Unless you can find BA’s new business class, which is only on a few planes thus far. Although BA First is still a nicer experience, obviously.
Cheers. This needed pointing out for all us Brit or half Brit or frequent ba/virgin fliers. Virgin upper every day every time until we get to more money than sense levels and can blow the extra 10k on nothing much but marginally nicer lounge at trophy airports, not having to wait for an in lounge massage and those extra 3 inches for a seat-bed and flight suit for a few hours and not swapping the champagne for Prosecco once in air. At least pre Covid. Who knows if anyone is even there now to give you a pre packed happy meal. On either one.
Perhaps! Maybe my memory is getting old he was 15 years ago I remember observing this. Maybe it was a different lifetime.
Do the British emphasize a class system more than Americans? After all, you guys still have the royalty class.
I would consider myself upper class. With my income and current net worth, I’m able to live comfortably while also having enough money to save and invest. Working my way up to that Rich Class airline seat!
The concept of separating the “upper class” designation from income is interesting. With “upper class” effectively meaning “better than average”, we should all strive to be upper class in all aspects of our lives.
I think there’s too much of an emphasis on income when describing upper class.
Class cannot be bought! Plenty of lower class people with high incomes.
Income should b 30% of the equation at most.
I’m in the “upper class” but the low end. I think it’s definitely true that the rich are upper class but not everybody in the upper class is rich. I also agree with people who say there is more to being upper class than just money. A lot of it has to do with attitudes and social etiquette.
I personally prefer the terms Affluent and Wealthy as opposed to Upper Class and Rich. I would privately think of myself as “upper class” but wouldn’t ever say that in public because it sounds… kind of mean. I would personally identify as “Entry-level Affluent”.
I also think that wealth is a lot to do with freedom. Like if you make half a million a year but your’e a stressed out CEO working 80+ hours a week in an office and never enjoy your life, I think you’re less wealthy than someone making $80k-$100k a year who works from home as their own boss doing something they love, only have to work 20 hours a week to get that income, and can wake up whatever time they like and have full control of their own schedule and can do whatever they want more or less with their day.
Being Upper class, income of 130k plus in NYC, doesn’t get you much. Being rich with high 6 figures doesn’t work if you are in the highest tax brackets and never learned to look for deductible investments. Lessons I’ve learned in my old age.
Upper class reminds me of the old “grey poupon” commercials. Ridiculously cheesy. Im pretty sure the term came from the grey poupon R and D team of 1981.
Mass affluent is the more accurate term. Better financial education enabling people to control their incomes. Long term results = a more stable society and less consumer debt.
Ah yes, I remember those! “Do you have some Grey Poupon?” as you role up next to a Rolls. I also remember The Lifestyles Of The Rich & Famous w/ Robin Leach. That was a fun show to watch!
By most any definition I have seen I am firmly in the upper class. I started out life bottom of the middle class. Growing up in a rural area, I also was directly exposed to extreme poverty though I never lived that way myself.
To me, upper class is defined as having enough income to comfortably invest while maintaining at least a middle class lifestyle. I feel like true middle class get most of the exact same things as I do but eat it less and at cheaper restaurants, drive cheaper cars, and are financially stressed to do it.
I personally live a comfortable lifestyle now while also saving 50% of my income.
I’m a non-profit Executive Director and I also have a consulting business. This is a huge success for me because I am the Founder of both businesses. I grew up in an auto industry middle-class family. It was always my goal to achieve what my parents couldn’t. When I started my non-profit I was making middle-class wages. Currently, single so my income puts my in the upper class. For me and the obstacles I’ve faced such as racism in the workplace or other discrimination based on my race and gender, this is a huge achievement. I believe saying upper class shows what I have achieved overall. My non-profit and business are progressive are about social change. I also love the words lavish, opulent, glamour, and luxury. I’ve always donated because this is how my parents have raised me. Some of my most important mentors lived in poverty or rural areas. It is a mosaic and I am here to experience all sides of life!