[onion2k]

I don't think you do.

The median income in the USA is $52,000. Assuming that a middle-class job pays 3* that amount, and that someone can reasonably save 30% of their salary for the last 20 years they work, that amounts to about $1m saved. Probably a lot less because a person's salary isn't at it's peak for much of their career. Even factoring for a household with 2 incomes at that level you don't get to $2.7m.

I imagine the people you know are members of the elite as you say, but they got there by by having elite jobs and by investing their elite incomes. If you think they're in the "middle-class" you have a somewhat distorted view of the world.

[brandonmenc]

I think you're not understanding that the American middle class covers quite a wide range of wealth and income.

You'd probably also be surprised at just how many millionaires who used to work in factories there are. 40 years of union wages, plus pension, plus investing in a mutual fund. I obviously can't prove it here, but I'm from a blue-collar factory city and trust me, some of those people have multi-million dollar retirement funds.

Granted, you can't replicate that kind of success today, but there are people who didn't work "elite" jobs in possession of millions.

[dnautics]

Probably also because the prosperity of those blue collar workers came about by pumping the economy by borrowing from the future. Interest rates were 16%+ in the early 80s, you could have bought a middle class house and refi'd 2 times (at 8%,4%) and basically get two free houses. With interest rates zero or near zero, current middle class individuals will not be able to repeat this feat.

[refurb]

Net worth, that includes your home. And don't forget returns on investment.

Saving $30K/yr and getting a 5% return on your investment gets you very close to $2.5M after a 30 year career. Sure that's in the upper range of middle class, but it's by no means wealthy.

[onion2k]

it's by no means wealthy

Are you honestly trying to suggest that someone with $2.5m to their name isn't wealthy? Wow.

[refurb]

I like how you didn't quote my words "upper middle class".

I guess the question is, what is wealthy then? I haven't ever seen a definitive cutoff. $1M? That doesn't seem like much if it's a household with two retired people.

[brandonmenc]

They're certainly not poor, but if they've saved that stash just to blow it all on end-of-life care, they're not really wealthy in the perceived 1% sense.

[onion2k]

Someone with $2.5m to spend on end of life care is a heck of a lot wealthier than someone with $250k to spend on end of life care. No matter what, if everything else is equal, someone with $2.5m is very wealthy.

Arguments like "Ah, but they're not really wealthy because..." will always fail because there'll always be the case of someone in the same situation who doesn't have $2.5m, at which point the person with $2.5m is definitely wealthy.

[refurb]

You bring up a good point. When we're talking about wealth, we all seem to ignore age in the process. Age has a huge impact on how wealthy you are.

If you're 25 and you have $2.5M? Yes, you're wealthy since you have 40 years of earning potential on top of your money.

If you're 65 and you have $2.5M? Very well off, but nowhere close to the 25 year old.

Same goes with inequality. If you ignore age, then things really unfair. How can someone have $3M and another nothing? But that ignore the fact that you'll have inequality regardless just due to age. It's not unreasonable for someone who is 65 to have a lot more money than someone who is 25. That's just the benefit of time.

[brandonmenc]

I generally agree with you.

The problem, in my opinion, is that there are too few gradations when talking about wealth. Yes, someone with a million dollars in assets - heck, even $10k in assets - is very wealthy, globally. I completely agree.

But to lump them in with the actual ruling class and call them "elites" is naive.

[meric]

Yeah, even $200k is very good, that's like 4 houses in India. Most people don't even own one.

[hkmurakami]

I think GP does know some people like this, because the boomer generation experienced tremendous asset appreciation across all sectors (public equities and real estate in particular) during their earning years.

[anon1385]

Sure, but being in the right time and place to benefit from a massive housing boom/bubble isn't "busting their asses".

[brandonmenc]

> isn't "busting their asses"

It is if that invested money came from say, pouring metal in a foundry 60 hours a week for 40 years.

[onion2k]

If two people do the same amount of hard work, but one ends up a millionaire because they bought a house in the right area 40 years previously, then being a millionaire has nothing to do with their hard work. They are not rich because they "busted their ass" for 60 hours a week. They're rich because they were lucky to live in the right geographical area.

Hard work is replicable. Whether that's hard work pouring metal in a foundry, or writing code, or analysing the stock market and investing well, those can all be hard work. Hard work is not buying a lottery ticket, or a house in an area that gets gentrified decades later. Nor is it giving your wealth to someone else to invest on your behalf.

[edanm]

The "standard" middle class way to wealth is to work hard, save as much as you can, and put your savings into investments that will grow your money.

While a lot of people go the "buy a house" route, and make most of their investment gains from the house appreciating, others will put their money into e.g. the stock market and make their returns there.

Which part of this do you think "doesn't count" or has "nothing to do with hard work"?

If we were talking about only people who worked hard, put X% of each salary into the stock market, and ended up wealthy because their investments paid off, would that count as "getting rich from hard work"? Is your objecting specifically with the fact that their chosen investment was in a house?

Don't forget, buying a house is the same as putting money into a diversified stock portfolio in terms of work - they had to save X% of their salary to pay off a mortgage instead of putting it into the stock market, but effectually they worked the same amount and saved the same amount to end up at the same place. I don't think it's worth making a big point of difference over which exact vehicle they chose to put their investments in, as it obscures the point.

Note: I recommend the stock market instead of buying a house because, like parent says, investing in a house is more of a lottery.

[sowbug]

A 7% return on savings will exceed $2m after 20 years.

[soared]

Absurd that he would try and argue about live savings and claim someone does not invest.

[soared]

If they stashed in their mattress sure. But don't fucking argue about savings and claim they don't invest it at all.