My personal definitions for class boundaries are as follows:

  -Poor: Can't afford basic necessities without assistance.
  -Lower: Can't afford leisure time or discretionary spending.  May work multiple jobs.
  -Lower-middle: Earns an hourly wage.  Works at least 40 hours per week, and receives overtime premiums for more.
  -Upper-middle: Earns a weekly salary.  Expected to work 40 hours per week or less, and additional hours are compensated appropriately.
  -Upper: Works only to the extent needed to pay for luxuries.  Never fears the loss of a job.
  -Rich: Never needs to work: is completely secure financially.

Those are somewhat subjective, but they work for me. That DINK couple is solidly upper-middle class, but that is the class with the most potential for individually motivated upward mobility. If they voluntarily limited annual expenses to $50k, got annual raises of 1%, experienced annual expense inflation of 5%, and earned 6% on their investments, they could meet expenses without working after 6 years. Their investment income would exceed their working income after 17 years. They could retire in the 18th year, and would never need to work again. Practically speaking, they would likely continue working, for additional self-worth, savings, and social status, but with the confidence that only "go to Hell money" can imbue.

(Of course, income taxes make such a rapid rise impossible. With an income of $250k, you're likely paying at least $100k in taxes alone. Ignore that for this thought experiment.)

They won't be rich. They wouldn't buy a nice house without a loan, for instance, but they would surely get the most favorable interest rate available. They could still be threatened by a market crash. They wouldn't be VCs, but they could be angels or entrepreneurs.

I think those definitions are over-thought-out. There's little fundamentally different among those first five. To me, if you depend on someone else (have to work, or get assistance) to live the way you want to live, you're in one class, and if you don't, you're in the other one. Everyone in those first five groups are N paychecks away from $0, the only difference is what that number N is.

I think those are pretty good definitions. But I would emphasize that the distinction between lower and middle classes is that middle-class people have at least a little bit of discretionary income. Lower-class people have to spend everything they get on food, shelter, and clothing.

> The "middle class" software engineering DINK couple in the bay area making $250,000 is absolutely in the upper class despite the fact that they still have to work every day.

While, to me, they are, as people working at wage labor, either working class or, if they have sufficient capital assets that they could reasonably subsist primarily or entirely on capital income for a non-trivial period of time if they chose to use it that way rather than saving it for the future -- that is, if labor is a practical (e.g., not economically coerced) choice rather than a necessity -- middle class. (If their capital is such that they can live comfortably on the proceeds while continuing to accumulate capital, then they are upper class -- whether or not they choose to work -- but I don't think many Bay Area DINK couples making $250K meet that standard.)

To me, economic class is about practical economic choices.

I disagree... In my mind, "class" is about wealth, not income. That $250k couple likely has little or nothing to their name. They are yuppies, middle class people going through the motions of projecting affluence. They think a lot about money.

The "upper class" makes money as they sleep. They don't think about the money the way you do.

If you need a ratio/figure, I think looking at housing/income ratio or housing/cash flow ratio would tell a good story. Or, look at the 1st standard deviation of non-retirement wealth.

> That $250k couple likely has little or nothing to their name.

I don't even make half that and I have six figures in savings. A $250k/year DINK couple should most definitely have very much to their name.

The only reason people could ever trick themselves into thinking $250k is merely middle class is because they assume that one simply must own a huge home to be middle class. This is a notion which I challenge. The middle class has never predominantly owned homes in major cities. The vast stretches of middle America have long been and continue to be the haven of the middle class, and this DINK couple should be able to buy a ranch home in that haven for cash.

This "middle class" family with the $2M home and the $250k income could sell that home, move to middle America, get a ranch home for < $200k with $1.8M left over, and retire, never working again. They probably have investments and retirement savings on top of the home, but even completely ignoring that they could get a $70k annual income just off 4% of that $1.8M. That already puts their passive retirement income above the median HHI in the US. And that's ignoring social security, which when they come of age soon they'll be able to draw at the maximum possible amount.

They're not going to do that, though, because they enjoy the power, status, and income of living in the heart of one of the nation's richest and most powerful industries and working for its top companies.

They paint themselves as victims, like they're doomed to live in a horrid one-story home. They chose that. They prefer the perks of living where they are over the perk of having a huge house in a cheaper part of the country. The fact that they were even able to make that choice makes them not middle class.

Whether they're "upper class" is another discussion. One can easily see various tiers in the upper class, with this family occupying the lowest one and billionaires on the highest rung. You'd need to throw in political luminaries somewhere as well -- the President should probably get on the highest rung even if he's not a billionaire, for instance.

> This "middle class" family with the $2M home and the $250k income could sell that home, move to middle America, get a ranch home for < $200k with $1.8M left over, and retire, never working again.

That assumes they already own their home outright. It still takes a while, even earning $250k a year to pay off a $2M mortgage.

$2M is not really affordable on that income, actually, so most likely the home was purchased for much less and appreciated significantly in value.

|I don't even make half that and I have six figures in savings. A $250k/year DINK couple should most definitely have very much to their name.

Well if you make close to half of that, then you basically make that as single income... The parent comment assumed bother parters were engineers making roughly the same amount.

Bottom line, is the difference between upper and middle class is where the money comes from. Doctors are upper-middle class until they have enough wealth (not income) to live of their investments alone. That is, they have similar money worries to other middle class people. Not necessarily stuff like "can I afford rent" (which would be lower class), but rather "what happens if I get injured and can no longer work?"

No. As others here have said, the distinction between middle and upper class is exactly that the upper class do not have to work.

And if you think $250k of job income in the Bay Area makes you upper class, all I can say is, if you were in that situation you would see how ridiculous that idea is. Housing is so expensive here that for most people, the bigger their income, the bigger their mortgage. And with a mortgage, you're tied down; you don't have the freedom to quit your job just because you feel like it.

This definition is a bit leaky. For example, the executive who lives month to month live in a luxury penthouse "has" to work to pay his mortgage...but has the option to not pay that mortgage, save for a year (or two), stop working, and live off wealth. I wouldn't call someone with that option "working class".

My wife and I live in Oakland on ~$160k a year, own a home, and live a relatively lavish lifestyle. So yeah, I'm in a "worse" situation then I outlines and in reality, in the upper class of quality of life.