Is it possible to be a millionaire and still be part of the middle class? It’s a question that may seem ridiculous to some–and totally reasonable to others, depending on who you ask.
“I’m often caught in the middle of this hot debate on middle-class identification, especially when millionaires are thrown into the mix,” said Zachary Jarvinen, vice president at Exact Payments. “As a finance expert, I see where the lines blur. Traditionally, middle-class status has been tied to income, education and occupation. But today, it’s about so much more — lifestyle, assets and even self-perception.
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Powered by Money.com - Yahoo may earn commission from the links above. “Think about it, a millionaire in New York City isn’t living the same lifestyle as a millionaire in a rural town where the cost of living is much lower,” he explained. “Then there’s the role of assets and debts. A person may have a net worth of over a million dollars but still feel that squeeze if they’re cash-poor or debt-heavy.”
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So is a millionaire middle class? According to Jarvinen, it’s not a yes-or-no question. It depends on a range of factors, from where they live to how they live.
“Having over a million bucks may sound like a one-way ticket out of the middle class, but in reality, the connection between net worth and day-to-day life can be as complex as the economy itself.”
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According to experts, depending on the context, this term can have different meanings.
“In general, middle class refers to individuals or households who fall between the working class and upper class in terms of income and lifestyle,” said Matt Teifke, founder and CEO of Teifke Real Estate. “In the United States, middle class is often defined as having an annual household income of $35,000 to $100,000. However, this definition can vary depending on location and other factors.”
Additionally, he notes the middle class can also be measured by education level, occupation and social status.
“There is no universally agreed upon definition of middle class,” said Loretta Kilday, attorney and spokesperson for Debt Consolidation Care. “It is often based on income levels, but wealth, spending power and finances are also defining factors of class. Having retirement savings of $1 million in no way mirrors the financial stresses of most middle-income families.”
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“One reason why some millionaires may be considered middle class is due to the misconception that all millionaires are wealthy,” said Teifke. “In reality, having a high net worth does not necessarily equate to being wealthy. True wealth is often measured by financial independence and the ability to sustain a certain lifestyle without relying on a regular income. Many millionaires may have a high net worth but still need to work in order to maintain their lifestyle.”
There are many factors that can influence an individual’s wealth, says Teifke, including their upbringing, education level, career choices and financial decisions.
“It is possible for a millionaire to have grown up in a middle-class family and managed to become financially successful through hard work and smart investments,” he stated.
That said, he notes that high earners may still have significant debt or expenses that impact their actual wealth. “It’s important to not make assumptions about someone’s financial status based solely on their income or net worth.”
According to Kilday, wealth inequality in the U.S. and cost of living also factor in. “What was considered solidly middle class decades ago may not be as comfortable today,” Kilday said. “One million dollars has far greater purchasing power for some compared to others.”
“I think the question of whether millionaires are middle class really depends on where you are in America,” said Jake Hill, CEO of DebtHammer Relief. “For example, that statement is undoubtedly true in many parts of Manhattan, San Francisco and other cities where the cost of living is much higher than average.”
However, he notes that typical middle-class achievements such as homeownership are still within reach for those below millionaire status in many other parts of the U.S.
“A lot of attention is paid to places with higher living costs, which may lead more people to believe that you have to make seven figures to be middle class now.”
“Having earned $1 million in investable assets shows an ability to participate meaningfully in the economy through spending, saving and supporting causes that is quite different from families living paycheck to paycheck,” said Kilday.
Ann Martin, director of operations at CreditDonkey, agrees they possess greater advantages. “In my opinion, millionaires are still upper class — or upper middle class at the absolute lowest,” she said.
“Middle-class status can generally be defined by characteristics such as being able to afford a home, save for retirement and achieve other somewhat modest but very important financial goals,” she noted. “Although things like homeownership have definitely become more expensive over the years, plenty of people with income below the million-dollar mark can still afford to meet these traditionally middle-class goals.”
According to True Tamplin, certified educator in personal finance and founder of Finance Strategists, much of the debate depends on the circumstances when making your first million.
“For many, amassing this amount serves as a retirement milestone, enabling a worry-free life post-work — a mindset common among the middle class,” Tamplin said. “Many millionaires, even those with $2 to $5 million, maintain this middle-class perspective, aiming for comfort rather than extravagance.”
In contrast, he says those in the upper echelons of wealth aspire beyond mere comfort. “They seek luxury and the assurance that their wealth will benefit future generations.”
While the definition of what constitutes middle class can vary dramatically based on local economic conditions and personal circumstances, Jeff Mains, founder of Champion Leadership Group, notes that millionaires, by their assets and the freedoms these assets afford, generally exist outside the traditional middle-class bracket.
“This distinction is crucial for understanding economic policies, wealth distribution and the social fabric of our communities,” Mains explained. “It underscores the need for a more nuanced conversation about wealth, class and economic policy in today’s globally interconnected economy.”
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This article originally appeared on GOBankingRates.com: Are Millionaires Considered Middle Class in Today’s Economy? Here’s What Experts Say
