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The middle class has been steadily shrinking since 1971. According to the Pew Research Center, however, roughly 50% of Americans still fell into this category in 2021.
While defining each class is tricky, there are several clear indicators separating the middle class from the truly wealthy. Perhaps the most obvious sign is the amount of income or net worth an individual has gained. But there are other, lesser-known signs as well.
Here are the main indicators that you’ve made the jump to the upper class…..Continue reading…
By Angela Mae
Source: 8 Signs You’ve Jumped From Middle Class to Wealthy | GOBankingRates
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Critics:
In economics, wealth (in a commonly applied accounting sense, sometimes savings) is the net worth of a person, household, or nation – that is, the value of all assets owned net of all liabilities owed at a point in time. For national wealth as measured in the national accounts, the net liabilities are those owed to the rest of the world. The term may also be used more broadly as referring to the productive capacity of a society or as a contrast to poverty.
Analytical emphasis may be on its determinants or distribution. Economic terminology distinguishes between wealth and income. Wealth or savings is a stock variable – that is, it is measurable at a date in time, for example the value of an orchard on December 31 minus debt owed on the orchard. For a given amount of wealth, say at the beginning of the year, income from that wealth, as measurable over say a year is a flow variable.
What marks the income as a flow is its measurement per unit of time, such as the value of apples yielded from the orchard per year. In macroeconomic theory the ‘wealth effect‘ may refer to the increase in aggregate consumption from an increase in national wealth. One feature of its effect on economic behavior is the wealth elasticity of demand, which is the percentage change in the amount of consumption goods demanded for each one-percent change in wealth.
There are several historical developmental economics points of view on the basis of wealth, such as from Principles of Political Economy by John Stuart Mill, The Wealth of Nations by Adam Smith, Capital by Karl Marx, etc. Over the history, some of the key underlying factors in wealth creation and the measurement of the wealth include the scalable innovation and application of human knowledge in the form of institutional structure and political/ideological “superstructure”, the scarce resources (both natural and man-made), and the saving of monetary assets.
Wealth may be measured in nominal or real values – that is, in money value as of a given date or adjusted to net out price changes. The assets include those that are tangible (land and capital) and financial (money, bonds, etc.). Measurable wealth typically excludes intangible or nonmarketable assets such as human capital and social capital. In economics, ‘wealth’ corresponds to the accounting term ‘net worth‘, but is measured differently. Accounting measures net worth in terms of the historical cost of assets while economics measures wealth in terms of current values.
But analysis may adapt typical accounting conventions for economic purposes in social accounting (such as in national accounts). An example of the latter is generational accounting of social security systems to include the present value projected future outlays considered to be liabilities. Macroeconomic questions include whether the issuance of government bonds affects investment and consumption through the wealth effect.
Environmental assets are not usually counted in measuring wealth, in part due to the difficulty of valuation for a non-market good. Environmental or green accounting is a method of social accounting for formulating and deriving such measures on the argument that an educated valuation is superior to a value of zero (as the implied valuation of environmental assets).
Social class is not identical to wealth, but the two concepts are related (particularly in Marxist theory), leading to the concept of socioeconomic status. Wealth at the individual or household level refers to value of everything a person or family owns, including personal property and financial assets. In both Marxist and Weberian theory, class is divided into upper, middle, and lower, with each further subdivided (e.g., upper middle class).
The upper class are schooled to maintain their wealth and pass it to future generations. The middle class views wealth as something for emergencies and it is seen as more of a cushion. This class comprises people that were raised with families that typically owned their own home, planned ahead and stressed the importance of education and achievement. They earn a significant income and consume many things, typically limiting their savings and investments to retirement pensions and home ownership.
Below the middle class, the working class and poor have the least amount of wealth, with circumstances discouraging accumulation of assets. Although precise data are not available, the total household wealth in the world, excluding the value of human capital, has been estimated at $418.3 trillion (US$418.3×1012) at the end of the year 2020. For 2018, the World Bank estimated the value of the world’s produced capital, natural capital, and human capital to be $1,152 trillion.
According to the Kuznets curve, inequality of wealth and income increases during the early phases of economic development, stabilizes and then becomes more equitable. As of 2008, about 90% of global wealth is distributed in North America, Europe, and “rich Asia-Pacific” countries, and in 2008, 1% of adults were estimated to hold 40% of world wealth
A number which falls to 32% when adjusted for purchasing power parity.[39] According to Richard H Ropers, the concentration of wealth in the United States is “inequitably distributed”.
In 2013, 1% of adults were estimated to hold 46% of world wealth and around $18.5 trillion was estimated to be stored in tax havens worldwide.
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