How do you draw the line from the poor to the affluent?
Housing is one of the indicators of social classes. In terms of housing, the poor spends the biggest percentage on basic living. The middle class spends a lot on transportation, while the rich devotes their money on education and retirement.
This is revealed by the Consumer Expenditure Survey which focuses on the incomes and spending citizens. It was revealed that the rich receives $150,000 or more a year, the middle class earns between $50,000 and $69,000 while the poor settles only between $15,000 to $19,000.
In terms of housing, regardless of income, the middle class and the poor spend equal percentages – between 26.7% and 29.2%.
For clothing and food, both classes spend between 3.2% and 3.7% and between 4.7% and 5.4%, respectively.
The only disparity is the actual amount of their spending. For the poor who earns $15 000 and spends 29.2% on housing, the total spending is only $4,380. For the affluent earning $150,000 and earning 27.5% in housing, would have a bill of $41,250.
In terms of transportation, the middle class is the biggest spender. They spend 21.3% on fuel, the poor spends 20.4% and the rich only splurges 15.5%.
The rich also spends most of their income in retirement, with 15.9%, the middle class with 9.9% and the poor with only 2.6%.
Others would define wealth as relative and subjective. A survey by PNC advisors revealed that, “Those worth $500,000 to $1 million said they needed $2.4 million. Those worth $1 million to $1.49 million said $3 million. And those with $10 million or more said $18 million.”
In a recent survey on 1,000 millionaires, 42% of them said they need “at least $7.5 million” to consider themselves wealthy. The respondents had $3.5 million in assets. Even the richest 1% of Americans, those who make $1.1 million or more, worries about their financial stability.
As revealed by the 2012 Credit Suisse Global Wealth Report, Americans’ median wealth was only $38,786 while that of Australians was $193,653. In the recently released 2013 Credit Suisse Global Wealth Report, Australians top the list with a median wealth of $219,505 while Americans only have $45,000.
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