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I watched this video a couple weeks ago, and while it has nothing to do with FI, I thought it was quite interesting how he divides the economic classes. TL;DW:

  • lower class ($34k income, $3400 net worth) - ~25% of population - truly struggle with emergencies and flirt w/ the federal poverty line; net worth is pretty much nothing (often negative!) due to student debt
  • middle class - three categories (lower, middle, upper)
    • lower ($44k income, $71k net worth) - ~20% population - identify more with middle-middle class and tend to get into more debt than necessary by trying to keep up with the Joneses, but could be financially stable w/ some discipline
    • middle ($81k income, $159k net worth) - ~20% - financially stable, most of assets are in home
    • upper ($117k income, $307k net worth) - ~20% - passive income and compound interest supplement income; some live paycheck-to-paycheck due to lifestyle inflation (i.e. keep up w/ next group), but some can do really well with investments
  • upper class - two categories (lower and upper)
    • lower ($189k income, $747k net worth) - ~10% - specialized professions; most people can get into the lower upper class with discipline (10% savings rate on $65k salary => $787k investments by age 50); little pressure from everyday expenses
    • upper ($378k income, $2.5M net worth) - ~5% - some college grads working as employees, but a lot of these are business owners

At each level, I see two types of people:

  • savers - have enough cash to weather emergencies, tend to have upward mobility
  • everyone else - tend to stay in that economic class, and may regress in retirement; routinely keep up with the Joneses and stay in debt

I personally have been in the middle to upper middle class for most of my career (started in lower middle class, but that quickly changed), and I'm shooting for lower-upper class to upper-upper class in early retirement. I didn't get any inheritance and don't expect any, and I haven't been particularly lucky with my investments (for every major win, I can show an equal major mistake), I've just been very frugal. Some details:

  • car(s) - single car for most of my married life; currently have two at 16 and 17 years old; I do most of my own maintenance
  • house - bought in mid-late 20s and haven't moved
  • savings rate - was 45%, but it's now 35-40%
  • current income - upper-middle class range, might get to lower-upper class if I stick with my career; about half my career was middle-middle class
  • FI target - something like $50-60k spending/year, or $1.5-2M; I plan to be FI around mid-40s, and I intend to keep earning income after FI, but the nature of my work will change

Anyway, I really enjoyed this video, and I think it's interesting to compare myself to the various breakdowns, as well as forward to people who argue that the main thing keeping them down is income (despite being middle-middle class or above).

What do you think? Do you agree with the breakdown? What do you think the "minimum" income range is for someone who'd like to pursue FI?

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[-] Cowbee@lemmy.ml 8 points 2 months ago

Classes are social relations to production, not arbitrary income levels. I'm a proletarian, but in the upper stratum of the labor aristocracy.

[-] xyzzy@lemm.ee 5 points 2 months ago* (last edited 2 months ago)

Agreed. By OP's definition I'd be in the upper class, but I would actually consider myself upper middle class. I'm comfortable, but I'm definitely not wealthy. Wealthy means labor is optional and you're leading a comfortable life.

Security is a component of wealth. Security for me means I don't care if I have a job or not, and losing my job doesn't mean I'd lose my house. I'm actively working on that, more so than FIRE itself.

In other words, zero debt and low monthly expenses is more important to me than retiring early, because then I know no company can ever again have leverage over me.

[-] faltryka@lemmy.world 2 points 2 months ago

That’s a novel approach to me, I like it thanks for sharing.

[-] Cowbee@lemmy.ml 5 points 2 months ago

It's Marxism, actually. Been there for as long as Capitalism began to be fully understood.

[-] Xaphanos@lemmy.world 4 points 2 months ago

I really like:

Social Stratification in the United States: The American Profile Poster https://a.co/d/6sCqsfk

for insight on this topic. Endlessly interesting and a marvel of the graphic presentation of data.

this post was submitted on 04 Oct 2024
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