The Wealth Classes Ranked Best to Worst: The findings are not what you’d expect
Please do not make any financial decisions based on the contents of this blog. My blogs are designed to be thought-provoking and introspective, not financial advice. Please do not act on any document unless it is titled “Statement of Advice.”
The VCo’s People before Profit Commitment: This blog was 100% authored by a human, not an LLM.
Have you ever wondered, what is the ideal amount of wealth / income to have?
It is normal to want your financial numbers to be higher, but is there a threshold that, when crossed, makes your life worse not better?
For this discussion, I have excluded living in abject poverty, strongly rejecting the claim made by many ignorant Western tourists that the impoverished are “happier than us.” This is a ridiculous idea for many reasons which I won’t get into here.
The Wealth Classes Ranked Best to Worst
#1 Super rich
A super rich person has a net wealth of $10m to $40m and earns between $2m and $8m per annum. Being super rich is great, because you can have almost anything you want, and if you earned your fortune through hard work, enterprise and smart investing, you appreciate what you have (as opposed to trust fund babies and those who got their money from litigation or potluck). Life is wonderful when you’re super rich precisely because there are luxuries and milestones that are still just beyond your reach. When you’re super rich, you can charter a private jet or a superyacht, but you can’t own one outright.
This wealth bracket is the best because although you have done extraordinarily well, you are not done yet. Many more learnings, adventures and “wow” moments await.
#2 Poor
Wait what? The second-best wealth band is poor?!
We have much to unpack here.
Have you ever heard the saying “the only thing more dangerous than a man who has everything is a man who has nothing?”
Unless you are endowed with a large inheritance or your parents paid for your first home, at some point in your life you’ll be poor, even if it is transitional. Let’s define poor as having enough money to have the basics covered but not much else. Being poor means you struggle to pay the bills, but you manage to survive with a roof over your head, and you have enough money to eat three meals a day around 90% of the time. No fancy cars or houses. No overseas holidays. Just work, struggle, cope, repeat.
This was me from 18 to 23, and although I was so poor I went hungry from time to time, these were some of the best days of my life. When I was poor, I had nothing to lose and everything to gain. Most of my life was fantasising on the upside rather than fearing the downside. Being poor was simple. The only fixed bills I had were rent, car, startup business expenses, and food. To be poor means to struggle financially but it also means juggling a small number of financial commitments. Priorities are clear, albeit disregarded by many. Either way, the mission is simple: make enough money to survive until next pay.
When you’re poor, no-one is competing for your space in society, and you can achieve your lifestyle with minimum wage. If you get made redundant from your job, all you need to do is find a new one with no pressure to find a high paying job. You just take anything you can get and the worst outcome is to be in the same financial position as before. You can, and do, lose everything weekly, so you don’t have that crippling fear of loss or imposter syndrome that normally accompanies newfound success.
It is no wonder why rich people who lose everything are so much likelier to become rich again than those who have never been rich. It’s hard enough to get rich once, and yet those who get knocked off their perch seem to claw their way back.
For those among you with loftier dreams, being poor serves as a potent source of energy that will help you leapfrog to the next stepping stone, and hopefully with enough momentum to fly through the middle classes.
There is a lot of hidden power in being poor, and if you can find true fulfilment as a poor person, it really is a wonderful place to be.
#3 Mega rich
These are the people with a net wealth of between $40m and $1b. Income in this wealth band is basically irrelevant because you can have anything you want.
At $40m, you’re pretty much untouchable. Even if you lose 90% of your wealth overnight, you still have $4m, which can earn you $400k per annum before you get out of bed.
After $40m, life becomes pretty strange. Yes, there are still things that you want to achieve, but there are no more existential threats – not financially anyway. It is in this wealth band that many people become increasingly agitated and depressed. And the worst part is, nobody cares! It is hard to feel sorry for someone who can drive any car he wants and have any house he wants. But the reality is, business and investment ventures will eventually cease to bring fulfillment to your life, and your life will become a dull and meaningless existence, wrapped in glitter.
Mega rich can be a great place to be, but only if you ask yourself some tough questions and be prepared to embark on new missions of self-discovery.
#4 Lower to middle middle-class
This sounds strange I know, but I wanted to create a line in the middle class between upper middle (which I’ll get to later) and the rest of the middle-class – let’s just call it lower middle to middle.
This band earns between minimum wage and $250k per annum and has a net wealth of $10k to $500k.
This wealth category sucks because you get all the responsibilities and none of the rewards. A solid 60%-75% of Western society lives here. As you venture from poor to lower middle to middle class, life gets more complicated. You need to study. You need to work. Often both. It is in this wealth band that many decide to get married and start a family. Every time you begin to make progress, a small crisis happens, or you take on new responsibilities sending you back to square one.
But at least in this wealth band, jobs are plentiful, and there is always room to grow upward. Not much is stopping you at this point. Your friends will encourage you, and so will your family. You may be doing okay but still, you’re not quite important or rich enough for anyone to try to bring you down with tall poppy syndrome, commercial litigation, reputational sabotage or regulatory aggression.
As unremarkable as lower middle to middle is, at least it is safe.
#5 Ultra rich
Billionaires.
Yes, I do think it would suck to be a billionaire, and no, I’ve never been a billionaire so I can only judge by what I’ve observed, and here’s what I have observed about billionaires: They’re fat. They’re unhealthy. They’re stressed out. They have little to no time for family or friends, and when they do attempt to socialise, they plague the occasion with business. Billionaires tend to care only about their business and investment portfolios, with many resorting to drinking, eating and medicating heavily to deal with the intensity of life.
Billionaires are obsessed, and not the good kind of obsessed. The enormity of their responsibility requires full and constant attention. The more the billionaire obsesses over business the more everything else in their life falls apart.
When you’re a billionaire, money becomes meaningless. Luxury turns into decadence. Opulence is no longer appreciated but expected, and eventually everything becomes in excess. No more quiet moments, no more appreciating the stillness of life, no more introspection. Everything is always “go, go, go; number go up; scale… to the moon”
Of course, not all billionaires are like this. But most of them are. And I genuinely do not envy them.
#6 Upper middle class
And here it is. The worst wealth band of all.
Upper middle-class households earn $250k – $500k per annum and have a net wealth of $500k to $2m. For most people, this will be the pinnacle of what they will achieve in life, which feels lovely during the honeymoon period but quickly deteriorates for a number of common reasons.
The upper middle class is important enough to have a managerial or senior role in their organisation but they are not quite at an executive level, and unless they are prepared to take several steps backward to propel themselves forward, which they seldom can because of their maxed out commitments, they get to watch and occasionally sample, but never live the lives of their executive superiors.
Upper middle-class people borrow excessively so they can live in the best possible house in the best possible suburb in a desperate display of keeping up with the Joneses. They lease one or two cars which fall into tens of thousands in negative equity the moment they drive them out of the showroom. They have one or two investment properties, bought in real estate seminars alongside their upper-middle class brethren, which are heavily negatively geared and honestly, they cannot wait for the market to improve so they can sell for a decent capital gain (which will be taxed heavily) so they can finally stop the bleeding. They have a couple of kids at private school they can barely afford. They go on one domestic and one international holiday per year and put enormous amounts of photos on social media showcasing the most luxurious parts. They have all the subscriptions, all the memberships and like to be seen everywhere.
They are miserable at work but cannot leave for many reasons. The jobs paying the money they need to support their maxed-out lifestyle are scarce and specialised. If they cannot perform at work or are made redundant, they are in serious trouble. Their finances are a mess. They have very small financial buffers and every time they get close to a savings goal (say $50k, $100k, $250k), they spend it – usually on a holiday, wedding, home improvement or crypto scam. Every time their borrowing capacity increases, they buy new cars and upgrade the family home. They not only have very little savings but also very little equity.
Even a small amount of time out of work is financially disastrous for the upper middle-class. A small uptick in inflation will force them to decide between selling their property portfolio during a market downturn or taking their kids out of private school. If they sold everything, they’d be millionaires on paper, but due to their lifestyle demands, their money would be lucky to last 2-3 years.
The most soul sucking part of being upper middle-class is the constant need to pretend that things are better than what they really are.
Of all the people in Western society, people in the upper middle-class are the most fragile, disappointed, envious and stuck. And yet, this life is the gold standard that Western society aspires to. The worst thing that can happen, is achieving it.
It is no wonder people in the upper middle-class are most prone to sickness, anxiety, addiction and divorce. #instahappy
Choose fulfilment
In life, we need to decide for ourselves which wealth band we will fall into, otherwise society will decide for us. If we decide against commercial success, we will need to accept our place in society and find greater purpose without the luxury or status. The moment we find ourselves pretending not to care about money is the moment we need to stop pretending and charge towards our real goals.
If we want to kick arse and make our mark on this planet, we need to pursue it with every fibre of our souls, but when we make our mission focused entirely on our businesses, everything else in our lives will fall apart – especially our health, relationships and intellect.
If we happen to fall into the dreaded middle classes, we are going to have the hardest possible time evading the social pressures to appear richer or more content than what we are. We need to find a way to balance real gratitude with the stoicism and temperance required to evade the trappings of excess. The moment we realise our gratitude is fake, which I suspect it is for most people in the Western middle class, or when we find ourselves living on the edge of or beyond our means, we need to do some serious soul searching and be prepared to detonate our entire identities and start anew – this I know from experience is even harder than being poor.
Here’s a simple principle to take away:
Make your mission about money and you’ll be poor, even if you make billions.
Make your mission about fulfillment and you’ll be rich, even if you lose billions.
