Now that we’re out of tax season, I’ve had a few conversations with clients about where they land financially in the Income Brackets. But before I get into the numbers, it should be noted that the lines that divide our income classes have always been blurry.
Ultimately, financial happiness comes down to how a person feels about themselves and their finances.
I have entrepreneurs in the lower income bracket who are quite content with their earnings. I also have One Percenters who constantly tell me that they need more, more, more given their naturally aggressive tendencies.
That being said, here are the numbers updated based on the 2022 income tax season.
Upper Class
The Pew Research Center defines a household of three with income at or above $156,600 as being in the Upper Class. This number amounts to double the national average of income.
These wealthier households are the only ones to have increased in net worth after the Real Estate Recession of 2006. The median net worth of these households increased 13% during that period.
Middle Class
Based on Pew Research, incomes falling between $52,200 and $156,600 are identified as Middle Class. The majority of Americans fall in this category.
Back in 2021, the median income was $70,784.
Lower Class
This encompasses incomes below $52,200 and is about 38% of Americans.
It should be noted that these numbers are based on national averages. If you live in a place like Chicago given our higher cost of living, these numbers can seem rather paltry.
Let me leave you with this…
In order to be considered a One Percenter in 2022, your income needed to be north of $785,968. This is, of course, the goal of most entrepreneurs.
But making it to this stratum isn’t easy. While this may be a goal, it should be noted that money doesn’t buy happiness. I provides security.
For many, not having money is much easier than actually having it. The second you have it you have to worry about people stealing it from you, how it’s invested, and planning your estate so that the government doesn’t get all of it when you die.
Many entrepreneurs who are broke, constantly say things like, “If I had this money I’d be able to do this or that.”
On the other hand, wealthy entrepreneurs are constantly saying things like, “This life was a lot easier when I was broke.” They also constantly complain about paying taxes.
But trust me, no matter where you are on the income spectrum, paying your taxes never gets any easier.
I’m writing this so that you can take a step back and put things into perspective. The grass will always greener on the lawn you don’t have to mow.
We’re all going to get through this. Let’s get through it together.
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