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Are you in the global middle class?
I would like to start by sharing one income calculator which will assist you to measure yourself among other mass of Indians.So, before reading this article please evaluate your current financial status at :
Not going by the various definition of international agencies nor by the stupid logic that considers you very rich at 1.5 lacs a year as most indians are poor. Classes should be defined by the lifestyle possible with a set of income. Below are the income for a family of 4 (i.e. 2 kids in school) by the age of maximum 40.
Below poverty line: world bank says as of 2016 12.5% indians are below poverty line. I.e. earn less than 1.95 USD a day or approx 130 ruppes a day. They sleep empty stomach on hard days. A family of 4 for a year earning less than 50k a year. I.e. approx. 130 X 365 days.
Lower class: Families who manage to prevent starvation and some form of roof over their head. Life is tough as no health facilities and sanitation is available. Few kids may manage to complete high school in government schools but that is not enough to get a job. They may buy second hand two wheeler or manage with a cycle. Family of four earning between 50k and 4.5 lacs a year. 70% indians belong to this class. They do not pay any direct tax.
Lower Middle class : A family of 4 which can afford to rent a 1 bedroom house in low class areas of the city, buy and maintain a two wheeler or entry level hatchback on loan. Car such as alto and keep it for 15 to 20 years. Provide food and education to kids in government college and cheap private schools. Any other expenses such as watching movies in a multiplex etc is unaffordable. They buy entry level cellphones such as Moto E and go for vacation to places like khandala once a year. This lifestyle is possible with an inhand income of around 40,000 a month in indian cities such as Bangalore. An annual inhand income of 4.8 lacs. Only savings are 80c ie 1.5 lacs for tax exemptions. They manage to save some money for retirement. Hence lower middle class status starts at approx 6 lacs annual income before taxes and savings.
Middle class: A family of 4 which can rent a 2 bedroom apartment in a average area of city. Buy and maintain a car such as Hyundai i10. Watch a movie in multiplex once a month and eat out at average restaurants. Dream to own an apartment but cannot. Go for vacation once a year to goa etc. Can buy branded clothes but not expensive electronics such as big tv or expensive cellphones. Can send kids to private schools but Cannot afford private engineering colleges in India. They manage to save for a decent retirement and kids wedding. They have an in hand income of roughly 75000 a month. I.e. minimum salary of 12 lacs CTC before taxes.
Upper middle class: A family of 4 which can buy and maintain a car in the C2 segment such as honda city. Or maybe 2 hatchback such as i10. Can think of buying a 2 bedroom apartment on loan in a average location in a city such as Bangalore. Or stay on rent in posh areas. Can send kids to good private schools and private engineering colleges. Can afford to watch movies in multiplex and eat in good restaurant’s on weekends. Go for holidays to goa, Jaipur, kerela once a year. And Thailand, Malaysia etc once in 3 year’s. They save enough for a comfortable retirement and lavish weddings of kids. This needs an inhand income of minimum 1.5 lacs a month. I.e. aprox 24 lacs a year salary before tax. 1% indians which is still crore plus are in and above this class.
Rich class: They already own a house in a posh area not an apartment. In areas such as Jp nagar or jayanagar in cities like Bangalore. They have invested in real estate in multiple properties. They can buy and afford a entry level luxury car such as corolla altis, vw jetta etc which cost approx 20 lacs on road. Also have an extra hatchback/sedan for wife or kids. Eat at best restaurants of the city and vist best pubs. Can go for international holidays to Europe, new Zealand etc once in 3 years. Or luxury domestic holidays each year. Can send kids for higher studies post graduation M. Tech to usa. Etc. They save enough for the big indian wedding and a lavish retirement. This needs a minimum income of 3 lacs a month. Which means about 50 lacs a year before taxes. Successful professionals such as principal engineers in US MNC, VP in finance firms, director to many small business men. Millions of indians earn this much.
Elite class: They can afford to buy and maintain a entry level Mercedes, bmw, Audi etc. They own multiple homes which are of big sizes minimum 2500 sq feet plots in posh areas of city. Their kids mostly study abroad for graduation i.e. engineering or medical or mba in usa. They go for international holidays each year. They have multiple full time servants. They can afford international medical treatments. They eat out and stay in 5 star hotels. They save enough to pass a fortune to their kids. This is possible in minimum starting income of approximately 1 crore a year before taxes. I.e. approx 6 lacs a month inhand income after taxes. High level executives such as partners in big four, Director of big US software companies, Several business men. Lacs of indians earn this much. They are USD Millionaire. They are HNI i.e. high net-worth individual having million dollar or approx 6.5 crore to invest excluding primary home.
Crème de la crème: Boy you have arrived! Yes you can show off now. Mercedes, audi n beamer is a gift for their 18 year old kids. They prize their Bentley, rolce Royce and maybach. They hire chartered flights for special occasions and fly business class bare minimum. Their homes have huge gardens , indoor pool and servant quarters. These guys are famous and popular in the community. They may not be big celebrities or billionaire but known to people by what they do. Money is not an issue power is what they seek. The club starts at One crore a month. Believe me guys there is no dearth of them in india. Every street in posh locality of metro cities you may find one. Big School owners, star hotel owners, famous jeweller’s, builders, successful tv stars , CEO of MNC. Wish all paid taxes though. They are indias UHNI i.e. ultra high net-worth individual with investable money more than 25 crore excluding primary house. Thousands of indians belong to this club.
Richie rich: This club starts at 100 crore a year income. Top whos who of india shahrukh , salman, big industrialist etc. India is home to 111 USD billionaire. The newest entrants are bansal duo of Flipkart. Heard of big kerela jeweller’s or mining reddy brothers. They are more than we think. Hundreds of indians earn this much. No need to say about their lifestyle. They shape our countries economy.
Many may not agree to my classification and call it exaggerated etc. I respect your opinion but this is my personal view. Remember it is for a family of 4 with eldest member around forties.
Taken from: https://www.quora.com/What-incomes-define-upper-middle-and-rich-classes-in-India (answer from Anonymous)
Image courtesy: https://www.givingwhatwecan.org/get-involved/how-rich-am-i/
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