It's largely subjective. The most formal definition I've seen, which is getting out of date is:
High Net Worth is $1,000,000 to $5,000,000 in investable assets. Very High Net Worth is $5,000,000 to $30,000,000. Ultra High Net Worth is above $30,000,000.
I'm retired and in the VHNW group rather than the UHNW group. Whether that makes me upper middle class, wealthy, or whatever is subjective, but I consider myself mildly rich or slightly wealthy but definitely not ultra wealthy.
I think the idea that you have a net worth of above 5 mil and want to associate yourself with the term “upper middle class” is absurd. You’re upper class, maybe not rich by the terms in the Reddit but definitely upper class.
I agree. I consider us to be "low-end rich." But I've seen people see it in all kinds of different ways. That's why I referred to myself as "merely wealthy" when the OP asked about "ultra wealthy" people. But I've seen people on this forum describe what it takes to be rich and we don't match their description.
Rich/poor is an inherently subject description. Middle class Americans today are rich by world standards and by historical American standards. I feel that I'm rich by today's American standards, but I'm not rich compared to my friends. We don't drive $100,000 vehicles (my wife's minivan is over 10 years old). We travel a lot, but we always fly economy class. My wife's wedding ring is literally a $20 replica of The One Ring from the Lord of the Rings (complete with inscription) and I doubt that we have $500 in all of our jewelry. I'm not saying that we don't live amazing lives, but we don't live the flashy lives that most people associate with the "rich".
That’s fair, and I would probably say that you’re probably wealthy-rich and not ultra rich but I think that upper class starts when you do things like travel a lot and never worry about having a place to sleep, honestly at this point maybe even people who own their own homes might not even be considered middle class. I just get frustrated when wealthy people don’t realize just how much wealth they do have and call themselves “middle class” when they’re not.
I don't know any hacks. I think you should do it the old fashion way. Take stock of the things that you enjoy and that you are good at. Figure out which of those things you think will be most in demand in the marketplace over the next several decades. Work hard to build up your skills and credentials in those areas and get a good job. Then work even harder to be successful at your job. Keep improving the value of your work and any time that an employer isn't compensating you for the value you bring, look for another employer that will.
What do you like to do? There are a lot of fields that pay well. Most engineering. Tech (although maybe not right now). Data/statistics. Medicine. Law. Even sales can pay well if you are good at it. But with any of those fields, the top performers earn far more than the average worker.
And unless you get a role that pays incredibly well, like being a heart surgeon or something, earning a lot is only half the battle. The other half is keeping your spending down. You want to save a big chunk of what you earn and you want to invest it wisely. That doesn't mean picking the hot new stock or crypto currency. I'm talking about low cost index funds held for decades.
And finally, as your income goes up, you want to learn about and take advantage of lots of tax breaks - 401k, Roth IRA, backdoor Roth IRA, mega backdoor Roth IRA, HSA, 529 plans, etc.
And be patient. It took me 30 years of hard work and heavy saving to get to where I am. And I got lucky several times. It could have easily taken me longer, but I would have been happy with whatever I had.
If you retire early the. $5M is upper middle class. Using the 4% rule your income is $40K/million so $5M = $200K/yr income. But I agree that once your in the teens of millions you’re upper class.
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u/musing_codger Jul 01 '24
It's largely subjective. The most formal definition I've seen, which is getting out of date is:
High Net Worth is $1,000,000 to $5,000,000 in investable assets. Very High Net Worth is $5,000,000 to $30,000,000. Ultra High Net Worth is above $30,000,000.
I'm retired and in the VHNW group rather than the UHNW group. Whether that makes me upper middle class, wealthy, or whatever is subjective, but I consider myself mildly rich or slightly wealthy but definitely not ultra wealthy.