The Middle Class vs. The Rich

[dazzleman]

Nick, I'd answer in two ways -

1. I define rich not by income, but wealth.  The person who is truly rich is the person who does not work for his money, but whose money works for him.  He may have a job, even one with moderate income, but that isn't the main source of his livelihood.  The high-income person who doesn't have significant wealth outside his house really can't be considered rich until he accumulates a certain amount of wealth.

2. The standard of living that can be purchased by a set amount of dollars varies widely around the country, so there can't be any national standard.

In my town, assuming a person puts down a standard down payment of 20% of the home's value, it would take an income of about $150,000 per year to buy a median-priced home.  We're not talking a fancy house here; just an average one.  And at that income, in that priced home, there wouldn't be much money left for too many luxuries.  Many people living here make less than that, because they bought their houses many years ago.

Which brings me to my next point -- WHEN you bought your home plays a big role in the standard of living you can have at any given level of income.  You could have two next-door neighbors with identical houses and identical incomes and family sizes.  But if one bought his house 10 years ago for $200,000, and the other rented an apartment until a year ago and bought his house for $500,000, the one who bought the house 10 years ago will have a much higher standard of living on the same income.

Economic statistics are very complex.

I consider myself upper middle class, because I am dependent on my job for my standard of living.