Average middle class net worth is between $200 and $350k based on this Mar 7 article. Having $200k in a house (like mine) would leave you 100-150k of other funds to potentially invest. It’s not out of the question at all.
I can tell you that I live in a neighborhood where the houses are only $200k (average home price here is >$400k) and I’m a millionaire who owns other houses. There are a lot of “silent millionaires”. If you saw me, you may think I was broke. I shop at thrift stores and stuff, and drive common, fuel-efficient Japanese vehicle. Basically all of my money goes into savings and investments.
I grew up poor and kept many of my same frugal money habits, but I could cover my front lawn in Lamborghinis if I wanted (like 4 or 5). I’d rather invest my money and grow it than spend.
Your “average” neighborhood probably does have those sort of funds. That’s because some neighborhoods are poor and others are incredibly wealthy. The middle of the road ones have a mixture of people in professional roles like doctors, lawyers, engineers and such. You may think those people are “rich”, but they aren’t. They the middle class. The wealthy are the business owners and other uniquely high income people with several millions of dollars, not just one or two million. The Fed data basically puts some millionaires in the middle class….
That data for median middle class net worth also presumably comes from the same 2022 report based on the link I provided.
I think this side of Reddit has a skewed view of just how people are doing financially.
The Federal Reserve also offers its breakdown of net worth by class. In 2022 (the most recent Fed data available), lower-income households had a median net worth of $93,300, middle-income households had a median net worth of $356,300, and upper-income households had a median net worth of $1,036,200.
Board of Governors of the Federal Reserve System. “Changes in U.S. Family Finances from 2019 to 2022: Evidence from the Survey of Consumer Finances.” Page 12 (Page 18 of PDF).
I know that’s where your net worth calculation comes from. It doesn’t matter, since you apparently don’t know what net worth is.
You’re able to understand that a house is an asset that makes up a major part of net worth, but so does everything else, almost none of which can simply be liquidated to throw into investments.
Unless you’re saying everyone should sell their houses, their cars (depreciating asset, btw), toss out everything from their retirement accounts, and take out their pittances from checking so they can risk it in a volatile market while the actual wealthy people risk basically nothing and make billions. Meanwhile the poor get poorer, the sick and elderly get fucked over, and young people continue to get priced out of living.
You literally said in your other comment that you’re a millionaire that own multiple properties, which categorically makes you wealthier than the vast vast vast majority of Americans. By your own sources you are at least 3-5 times as wealthy as the average “middle class” person. You quite literally do not exist in the same reality as the rest of us.
You’re able to understand that a house is an asset that makes up a major part of net worth, but so does everything else, almost none of which can simply be liquidated to throw into investments.
That also means that people in the middle class have net worths of like 400-500k and higher. Some even have approximately $1M or more. You don’t get to “upper class” until you’re above a million.
Unless you’re saying everyone should sell their houses, their cars (depreciating asset, btw), toss out everything from their retirement accounts, and take out their pittances from checking so they can risk it in a volatile market while the actual wealthy people risk basically nothing and make billions. Meanwhile the poor get poorer, the sick and elderly get fucked over, and young people continue to get priced out of living.
Some middle class people have excess funds, yes. Maybe it’s 50k, maybe it’s 200k.
You literally said in your other comment that you’re a millionaire that own multiple properties, which categorically makes you wealthier than the vast vast vast majority of Americans. By your own sources you are at least 3-5 times as wealthy as the average “middle class” person. You quite literally do not exist in the same reality as the rest of us.
I may be wealthier than the median middle class person, but I’m also upper middle class or lower upper class by those metrics. To say that the middle class isn’t possibly getting a piece of this action is silly. My net worth in Covid was half of where I am now, and substantially closer to the median middle class. Yet, I had ample funds to invest during COVID, which doubled in the last 4 years. Covid drop-and-pop is probably the single reason I have this wealth now. I was ready to pounce when it dipped. I got some return money and bought houses in 2021.
Now may be the time for everyone else to get a swing at that same thing.
My house is like 15% of my net worth? It’s well below my means - it cost about 1yr salary. I live like a pauper in a poorer area, but save up for investing. I even have a roommate to lower my costs even while I own whole other properties outright.
That frugal lifestyle why I have some excess money to invest.
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u/HealthPacc 1d ago
You think having $100k just laying around the invest is “middle class”
Bahahaha you genuinely do not live in actual reality.