Tag Archives: almost upper middle class

What It Means To Be Lower Upper Middle Class

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Yeah, I know, it a funny title “Lower Upper Middle Class“, but it’s the closest representation to a socioeconomic class that I could come up with to represent my current state.

So what does it mean to be “Lower Upper Middle Class”?

I like to think of it as being at a party where there are two connected but different rooms.  Room 1 is where my middle-class friends are talking, and I’m mostly in this room.  Room 2 is where some of my Upper Middle-Class friends and even family members are talking about topics I want to hear.  While I want to join the conversations with my friends in Room 2, my friends in room 1 and room 2 don’t get along.  So I’m standing in the doorway of rooms 1 and 2 acknowledging some of my friends in room 2 and desperately trying to listen to what they are saying while hanging out talking to my friends in Room 1 at the same time.

I guess in some ways, I don’t belong to either room.  You see, I’m still in a metamorphose phase where I’m trying to grow my money to a level that I can participate in more Upper Middle-Class Activities without decreasing my net worth, while at the same time trying to resist spending money and time on some of the things that my middle-class friends are spending money on.  I’m pretty much in the proverbial “Catch-22” stage in my financial life right now.

LowerMiddleUpperClass

Okay, now that I explained the feeling of “Lower Upper Middle Class“, what are the other points of interest that I perceive about my current stage?

  1. Vacations:  I can afford to go on better and more vacations, including vacations overseas, but I don’t.  I want to establish a more secure financial footing before I take that leap.  For me, I mustn’t spend money, which in effect will decrease my wealth.  This is where a dividend strategy comes into play.  Read how I’m doing such a strategy for my lunches at work via my article about the Dividend Lunch Experiment.  So for the time being, all my vacations are local to the US.
  2. Community Activities:  We do community activities now, especially my wife where she volunteers and does charity work for the Schools and community in general.  I hope to expand my role in this area too, but for now, I continually try to think of ways to better my financial picture.
  3. Paying for College for the Kids:  This is one of the many drains I have on my paycheck.  I want to fully fund my kid’s college costs.  This will give them a huge head start in life.  Both of my kids are doing great in school, and I’m hoping they get scholarships of some sort.
  4. House Hunting:  Currently I’m mortgage-free, but I want to upgrade to a larger house. Since I’m deal-oriented and picky, I’ll be looking for a long time.  I hope the rates stay low for a long time too.  It’s funny, I can afford a more expensive house, but I choose not to.  Perhaps if I had just a bit more money I would take the plunge and buy a dream home…
  5. Eating Out:  This is one area in which we splurge.  We go out 2 or 3 times a week to a decent restaurant, but usually, it’s a chain restaurant like Olive Garden, Red Lobster, Chinese or Mexican restaurants too.  But by a large margin, we go to Panera restaurant the most.  Healthy food, but affordable for the most part. (Healthy, in that I usually get the Chicken Cobb Salad with Avocado, yum!).
  6. Cashflow constrained:  Although my house is paid off, I redirect the freed-up money to my 401k, Roth IRA, and ESPP options.  All three are great, but my take-home pay doesn’t go very far.  I’m especially proud that I participate in the ESPP plan at work because it’s a great money hack that makes me a few extra thousand in free money, and is a forced saving mechanism.  How cool is that!  Read this clever way that I’m using my ESPP to fund my Roth IRA.
  7. Fashion:  The entire house buys better clothes, except me.  I don’t mind though, I need to polish my look by losing extra weight anyway.
  8. Entertainment:  We do go to the movies to see interesting-looking movies, but mostly we just wait until the movies come out on DVD.  We do other things too, and this will continue to expand as I develop a strategy (more than likely dividends) to fund more adventures in entertainment.

Okay, I’ve just scratched the surface of what it’s like to be “Lower Upper Middle Class”, but it’s already past midnight, so I’m going to say good night!

Bests,

Don

My Personal Finance Pyramid Update – Lower (Upper Middle Class)

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My Personal Finance Pyramid

If you have read this blog in the past, you know that I created a visual chart to gauge my personal finance progress as I climb a wealth pyramid that I have created.  The pyramid (based off of Maslow’s Pyramid of Needs) seemed to be a great representation of such a wealth-pursuing journey.  In many ways, it helps me visualize the various levels and created milestones for me to watch for, since I love feedback!  So without further ado, here is my update on my progress climbing my “Personal Finance Pyramid“!

I have obtained the level of Lower “Upper Middle Class” status!  sort of…

Financial Pyramid

You are probably wondering why I wrote “sort of“.

Well, during the run of the stock market after “The Great Recession”, I managed to climb up to the lower green bar of the “Upper Middle Class” status area.  But now since the stock market has dipped again, I’ve fallen in the upper portion of the Asset Accumulation level again.  Close to “Upper Middle Class”, but not quite.

Upper Middle Class is actually a tricky category to be placed in since it’s more than just wealth and income.  In my part of the country, currently I fulfill those requirements… but the standard of living is lower where I live vs a larger city like New York.  As for eduction, I believe I fulfill those requirements, but barely.  No fancy ivy league schools in my past college life.

Another reasons I consider my family “lower upper middle class“ is because we live at a more frugal state than others in my city with comparable income.  But that said, many of my neighbors make a similar amount of income, so I’m not that far off.  My house is just a little over 2,000 sq feet though, so it’s smaller than the norm is these days.

Now for the Upper Middle Class lifestyle versus my current “middle class” lifestyle.

I have and do a lot of the same things as the upper middle class does, but instead of a Lexus I have a Toyota Camry.  And instead of taking vacations overseas, I still go on entire family vacations typically to the beach.  Oh, I could afford to take overseas vacations, but I would like to build up my dividend stream first to fund such activities.  Besides, I’m still growing my Wealth Snowball that was created in the Asset Accumulation level.  I guess lower “upper middle class” would mean that I have one foot in the Asset Accumulation level, and one foot in the Upper Middle Class level.

What financial numbers does it take to be considered the Upper Middle Class?

  • Household Income of over $100,000 (or for an individual to be at or above $95,000 in year 2012).  Update (2013): I’ve recently read that a good starting number is around $120,000.
  • Net Worth of around 500k+  (at least in 2012)

Anyway, that’s my assessment of my current state.  If the market keeps dipping though, there is a good chance that I’ll slip entirely back into the “Asset Accumulation” phase.

I hope the stock market has been more gentle with you than it has with me lately!

Bests,

Don