| I tend to think of the classes in terms of standard of living according to one's access to certain tiers of goods and services, but the resulting class divisions end up being pretty similar to yours. --- Tier 1 (basic necessities) consists of goods and services that are essential for living in good health: food with adequate nutrition; shelter; access to health care; at least a basic education. That sort of thing. Tier 2 (basic extras) envelops those things which are not strictly necessary, but are reasonable expectations for living a fulfilling life: family vacations (nothing exotic, maybe ~once a year); access to a college-level education; at least a modest budget for entertainment; owning one's primary residence; enough savings to provide continued access to this tier of items post-retirement. Tier 3 (luxuries) are those things in excess of what an 'average' person would reasonably feel entitled to. In essence, they are the rewards for above-average financial success: more exotic vacations more often; luxury cars in the sub-exotic range; a home with custom fit and finish; 'basic' part-time hired help (lawn care, tutors, perhaps a nanny). Tier 4 (super-luxuries) are those things which an 'average' would see as unattainable, even in their best years: a sprawling mansion or luxury penthouse in the city; exotic cars; private or chartered jet service; full-time, on-site hired help (private chef, valet, that sort of thing). So how do these fit into the class structure? I tend to model it like this: Lower class people can only attain the basic necessities (tier 1) by working multiple jobs or excessive hours, and/or with social or government assistance. When spending responsibly, items in tier 2 are unattainable. Lower-middle class people can provide tier 1 items without assistance, but their access to tier 2 is limited or nonexistent. For example, maybe they can enjoy a family vacation every few years, but they are probably relegated to renting a home, and their retirement prospects are meager. Middle class people can, with responsible budgeting, provide everything in tier 1 and most of tier 2 without going into excessive debt. With responsible budgeting, they can continue to maintain this lifestyle through retirement. Upper-middle class people work for their salary or own small businesses. They never have to worry about tiers 1 and 2; those are covered. Their budget focuses on which tier 3 items they can reasonably afford. Assuming responsible financial planning, they can more or less maintain this standard of living through retirement (some modest concessions may be in order). When spending responsibly, the upper-middle class have little or no debt beyond a mortgage and student loans. There are a few ways to fall into the 'upper' class. If you're far from retirement age and don't have to work, yet your amassed wealth and investment income are sufficient to maintain an upper-middle class lifestyle, then I'd put you in the upper class bucket. If you have access to tier 4, you are upper-class regardless of whether you choose to work. If your concept of a 'budget' revolves around how much money you give away, or which foreign jurisdiction makes the best tax haven, you're probably in this group. --- Note that not having to work for a living is itself a luxury. In general, if you have the means to maintain the standard of living a certain class without working (and being far from a typical retirement age), then I would put you in the next higher class. For example, if you're 45 years old and could maintain a comfortable middle-class lifestyle without working, I'd say that makes you upper-middle class. |