Here’s the Minimum Net Worth Considered To Be Upper Class in Texas
Written by
Angela Mae
Edited by
Levi Leidy
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The Lone Star State may be the second-biggest state in the country, but it’s certainly not the most expensive. In fact, the Missouri Economic Research and Information Center ranks it as the 14th most affordable place to live.
Texas’ overall cost-of-living index is well below the national average at 92.1. The only thing pricier compared to other states is utilities.
That being said, the net worth needed to be considered upper class is still high. Here’s what it is and what factors influence it.
Defining Texas’ Upper Class
Bo Hanson, a financial planner and co-host of The Money Guy Show, used data from the Federal Reserve to define America’s “upper class” as:
- Anyone in the 75th to 90th percentile: This is basically anyone with a net worth between $714,000 and $2.1 million.
However, this is a broad definition and doesn’t consider income and location. Recently, GOBankingRates found that the minimum household income needed for someone to be considered upper class in Texas is:
- $163,970 (two-person household)
- $182,825 (three-person household)
- $216,568 (four-person household)
To note, a person’s net worth is their assets minus any liabilities. Say, for instance, your primary residence is valued at $500,000, but you still owe $300,000 on your mortgage. Assuming no other assets or liabilities, your net worth is $200,000. The calculation:
- $500,000 home value – $300,000 mortgage = $200,000
Other assets you might have include retirement account funds, a paid-off vehicle, savings accounts or certificates of deposits. Liabilities might include credit cards, student loans or auto loans.
Minimum Net Worth Depends on Other Factors
Income is only part of the equation. Household size matters, too.
The most recent Pew Research Center data found that U.S. households need to earn more than $169,800 to be considered upper-income. This figure is for a three-person household. It’s also $13,025 lower than what is needed for that same size household in Texas.
It’s also worth noting that the average personal expenditure per capita in the U.S. is $60,783, as per the Federal Reserve. The larger your household, the greater your expenditure. A household with five kids, for example, will likely spend more each year than someone with one.
Larger households may also need a greater income (and net worth) to be part of Texas’ upper class. In any case, a major part of what being in the upper class means is having — and maintaining — the ability to grow your wealth.
Where you live in Texas can also make a big difference in your financial needs and social class. For example, another GOBankingRates study found that people need a minimum of $86,876 annually to live comfortably in Houston. In Plano, that figure increases to $119,864 annually.
The household median income in Texas is $76,292. As you can see, this amount goes much further in some places than others.
Knowing the minimum net worth needed to be in Texas’ upper class can be helpful to seeing where you stand, but it’s still somewhat subjective. If you’re trying to build your net worth, take a good look at your income, assets and liabilities. Paying down your debts and making strategic investments that align with your financial goals can go a long way to getting you where you want to be.
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