Generally speaking, each wealth class thinks about money VERY differently and USES money very differently. Which explains as to why they're in that said wealth bracket. Needless to say, that doesn't mean that you can't CLIMB the wealth brackets to reach "the wealthy" class. But I certainly have noticed some recurring patterns amongst the wealth brackets. We'll explore how differently each wealth class thinks and uses money. I certainly don't like placing any numbers on these brackets, you could be paid millions every year and have little wealth to your name, you hear this story coming from athletes that made millions during their career, but as soon as their career ended, they might file for bankruptcy. Michael Jackson (I've been listening to his music a lot lately and figured he'd make a great example) would reap in millions every year but had little to no money to his name after the numerous lawsuits he faced before he passed away. Tony Robbins tells a story about a UPS worker who worked for a $20,000 a year salary but was worth well over the millions around his retirement since that same UPS worker invested his money wisely. Do you see/understand why I refuse to use numbers in this article, but rather discuss habits on how they use money and how they view money.
I discussed in an old post uploaded around the end of August on how lower-income families make up for half of the lottery industry $70 bn revenues in comparison to other classes. Deutsche Bank released a report discussing how 40% of lower-income families spend their money on luxuries. Not to be confused with ALL lower-income families spend 40% of their income on luxuries, but 40% of lower-income families spend a lot of their money on luxuries. Gallup poll says that only 23% of folks who earn $30,000 or less are invested in the stock market. The poorest 20% in the U.S make up for ~25% of the total ~$784 bn credit card debt burden. So we see that the poor are using money that they don't have to purchase luxuries they can't afford and they remain out of the markets while living paycheck to paycheck. Low paying jobs, lack of financial literacy, poor budgeting, and rising prices of goods and services can be found at fault.
The middle class
About 50% of folks who earn anywhere between $30,000 - $70,000 are invested in stocks. About 1/3 of them own a 401K. Their job is based on a salary and not an hourly wage and these jobs tend to be less labor-intensive and are considered "safe." However, they make up for the largest percentage of any student loans, auto loans, and mortgages. Taxes are a huge burden on the middle class, as 30% of their income goes to taxes.
79% of individuals who make more than $70,000 a year is invested in stocks, bonds, and commodities. Typically own a small business or is a manager of a business. Which brings me to my next statement, they borrow/pull out loans to fund their small business or anything that can potentially create a stream of income for them, that said loan usually comes at a much lower interest rate. This class makes up for ~6.1% of the credit card debt burden.
Tycoons that purchase or use debt to build numerous housing, apartment, and condominium complexes for a stream of income. They tend to place large portions of cash in companies in order to have a large share of the company to potentially be on their board. The 8 richest people in the world have as much wealth as 3.8 billion poorest people in the world. They make up ~1.7% of the credit card debt burden. Millionaires and billionaires tend to have AT least 7 streams of income or more. 20% of millionaires inherit their money and over 80% of them are self-made.