While the actual threshold changes based on factors such as the cost of living and inflation, those in the upper middle class typically have an estimated income of $150,000 to $250,000. This level of income is much higher than what the average American does. According to US Census data, the actual median household income was $74,580 in 2022.
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However, with their above-average incomes, do high-income professionals manage their money differently or are they living paycheck to paycheck like 50% of Americans? Let’s take a first-person perspective.
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“Even though I earn $250,000 a year, I still think it’s better to keep things simple. I don’t go for serious financial plans. It’s a matter of knowing what’s coming in, what’s going out, and making sure there’s always enough time covered for a rainy day,” said Bryan Clayton, CEO of GreenPal.
Here is his income:
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Investment Strategies: “Here’s what I have to go through: buy a single-family investment home every year, pay off the mortgage aggressively, rent it out and repeat.” No overthinking, no jumping from one idea to another. Instability is important,” Clayton said. Of course, buying a single-family home investment may not be feasible for everyone, but you can adapt Clayton’s philosophy to your own situation and set up a plan that fits your financial capabilities and investment goals. This can include regularly setting aside a portion of your income for investment, whether it be in real estate, stocks or other avenues.
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Monthly Budget and Savings: “My monthly budget is very ethical. I’m not one to mess around with things that don’t matter. Most of my money goes into savings and investments. It’s about building that long-term wealth, not just living it today,” he explained. So, despite doing well above the national median wage, Clayton doesn’t raise money. Instead, his financial philosophy focuses on maintaining a monthly budget and avoiding unnecessary expenses.
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Financial Problems: “One problem I face as someone in the upper middle class is not keeping up with the rising cost of living,” admitted Clayton. Lifestyle inflation, also known as rising lifestyles, refers to the gradual increase in a person’s consumption and lifestyle as their income rises. What helped Clayton navigate this crisis is sitting down. “I try to remember my roots and focus on growing my wealth, not just showing off,” he said.