Are You Aware of Your Financial Status? Learn How to Improve Your Financial Future!
There is a common misconception about what it means to be “rich”. To gain a more realistic understanding, we have outlined different income levels below. Take note of where you currently stand and strive to move up to the next level.
Level 1 – Poverty: (Annual income under $25,000): If you’re in this category, you’re likely receiving government assistance and may or may not have a job, often in a low-wage service industry.
Level 2 – Working Class: (Annual income between $25,000 to $50,000): You have a job but still find it difficult to make ends meet.
Level 3 – Middle Class: (Annual income between $50,000 to $100,000): You’re relatively comfortable, but still need to budget and spend wisely. Your financial situation can vary depending on the number of children in your household.
Level 4 – Upper Middle Class: (Annual income between $100,000 to $150,000): You’re officially comfortable, in the top 12% of households in the USA. You can afford a decent home, cars, and vacations, but nothing too extravagant.
Level 5 – Well Off: (Annual income between $150,000 to $200,000): You’re in the top 4.2% of households in the USA, and have the financial resources to acquire all the comforts in life, including several nice vacations per year. Saving a significant portion of your income is recommended.
Level 6 – Rich: (Annual income between $200,000 to $500,000): Congratulations, you’re officially rich! It would take severe financial mismanagement to have any worries.
Level 7 – Wealthy: (Annual income above $500,000): Only 1/10 of 1% of Americans make this much per year, even after taxes. You’re truly wealthy and can enjoy a lifestyle that few can afford.
What level are you in? Statistically speaking, there is an 88% chance you fall in levels 1, 2, or 3. However, the good news is that it’s possible to move up to the next income level starting today.
Warren Buffett famously said, “If you don’t find a way to make money while you sleep, you will work until you die.” The key is to learn how to operate a business without constantly monitoring it and to continuously grow your income.