Just who is middle class?

The varied experiences of Americans who consider themselves middle class aren't really surprising. As economic and social forces buffet families chasing the American Dream, there’s disagreement among the experts who crunch the numbers about how just well or poorly this group is faring — or even who they are.

There is near-universal agreement that the gap in wealth between the richest American and the poorest is widening to levels not seen in nearly a century. But that doesn't tell you much about how those in the middle are faring.

Middle Class

You are a highly skilled employee, manager or professional with a post secondary education. Your diverse annual income is above $40k. You have a home and no mortgage, pay the bills, put food on the table, save a little and can afford discretionary spending as well as take a vacation once a year. That’s maybe lower end of the middle class, but it’s better than 98 percent of the people in the world. (You may not own your own home but have equivalent assets to own a home and have essentially no debt. Assets far exceed debt. Debt is discretionary and very limited.) Any deficits in any of these categories preclude middle class.

1) Highly skilled, manager or professional
2) Completed tertiary (post secondary) education
3) Annual income above $40K
4) Home or equivalent in assets without mortgage
5) No significant debt (paid monthly)
6) Have discretionary cash or liquid assets
7) Regular cycle of vacations at least annually
8) Substantial savings and investments (high liquidity)
If you are retired and able to maintain the all the other above, you are middle class.

Upper middle class:
1) Mobility at the top of your “game” (profession)
2) Advanced academic education
3) Diverse annual income above $250K
4) Primary residence net worth of $1M plus.
5) Assets well in excess of $2M
6) Discretionary lifestyle

Upper Class
1) Discretionary life with inherited wealth
2) Ivy League education or equivalent
3) $10M assets without liability
4) Extremely diverse assets (art, industry, collections: e.g. automobiles, horses, entertainment, etc.)