facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck

How do you know if you’re really middle class?


The Kentucky Derby is billed as the most exciting two minutes in sports. For the first time in its 145-year history, the horse that crossed the finish line first was not the winner. The race took just over two minutes, but the judges took another twenty minutes to review the replays and declare a different horse the winner.

During the wait, some fans went from thinking they were winners to finding out their tickets were worthless. Conversely, some bettors who thought they had lost suddenly realized they were big winners.

In a way, this scenario is like a snapshot of everyday life. Our nation is filled with rags to riches stories. Some accumulated wealth through their business ventures, often fueled by technological innovations.

A few made fortunes based on their athletic abilities; fewer still through the sheer luck of picking winning lottery numbers. But most, I believe, avoided the limelight and built a nest egg over time, not by hanging out at casinos or racetracks.

On the flip side, some businesses fail, some retired athletes quickly burn through their money, and many lottery winners somehow find a way to squander their windfall fortunes.

Just as with the Derby players, people can go from broke to wealthy to poor in a very short period of time. In the real world, most Americans aren’t super wealthy. They’ve accumulated money from paycheck to paycheck, avoiding get-rich-quick scenarios. They’ve shown a lifelong commitment to saving and investing.

That’s why so many people view themselves as “middle class,” a term I find difficult to define. At the Derby, people in the infield might be considered middle class and the flashy folks in the grandstands as wealthy.

But, study after study indicates just how difficult it is to categorize people based on their financial circumstances.

Recently, Business Insider and Morning Consult surveyed over 4,000 individuals. Just over half of those earning upwards of $100,000 thought of themselves as middle class. And yet, the same survey showed that a significant number who earned more than $100,000 considered themselves poor.

I believe defining middle class is more difficult than ever. It’s far more than just income. Money flows through people’s hands at different speeds. It’s also about lifestyle and aspirations.

For some, money never even touches their hands. It’s spent before they ever see it. Others have sticky fingers and find it difficult to part with. Both types may have the exact same incomes, but insofar as their economic status, their views are likely to be significantly different.

With elections right around the corner, I expect politicians to talk about the shrinking middle class. Again, I don’t think middle class is defined by certain income parameters, occupation or location. More than anything, it’s an attitude, driven by determination and hard work.

In this fast-paced, technologically advanced, highly mobile society,

I believe people have the ability to move up the economic ladder like never before. Then again, they can slide down just as quickly.

Some with little, view themselves as affluent. Others with a lot see themselves as poor. When people look at themselves in the economic mirror, they should be aware of where they started, where they are, and where they hope to be.

In a way, it reminds me of a horse race.