Net Worth for Californians: How Much To Be Poor, Middle Class or Rich

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California’s middle class is shrinking.

According to a new report from California Community Builders, a nonprofit housing research and advocacy firm, America’s wealthiest and most populous state has lost 7% of its middle class in the 21st century to the ranks of wealthy and low-income households.

With the upper and lower classes expanding at the expense of average earners, what net worth qualifies you as poor, middle class or rich in the Golden State?

GOBankingRates previously examined net worth levels for baby boomers as well.

Economic Class as Defined by Income in California

The widely accepted Pew Research Center definition of “middle class” is assigned to households that earn two-thirds to double the median income. Lower-middle-class households earn less than two-thirds of the median and upper-middle-class households earn more than twice the median.

According to the most recent U.S. Census Bureau data, California’s median household income is $91,905.

By Pew’s standard, a California household has to earn between $61,270 and $183,810 to join the state’s middle class. Those earning $61,269 or less are lower-middle class and $183,811 or more buys you a ticket to the upper-middle class. 

According to the Hamilton Project, households earning less than 100% of the federal poverty line fall out of the lower-middle class and into the ranks of the poor. Households graduate from the upper-middle class and become wealthy when their income is among the top 10% of earners.

A Middle-Class Net Worth in America’s Wealthiest State

SoFi used Census Bureau data to estimate that California’s median net worth is $203,000.

Using Pew’s income-based formula for establishing economic status, Californians would need between two-thirds and double the state’s median net worth to be considered middle class.

With $203,000 as the baseline, that’s a net worth of between $135,333 and $406,000.

What Is a Poor Californian’s Net Worth?

On his YouTube channel, finance expert and author Geoff Schmidt explained that households in the 20th net worth percentile are considered poor. Using $270,000 as the 50th percentile — roughly midway on the middle-class net worth spectrum — the 20th percentile is $10,000 for California.

In a state with at least three counties where a $104,000 salary is considered low income, there are parts of California where you can have a net worth much higher than $10,000 and still be considered poor.

However, considering that 31% of residents earn no more than one and a half times the state’s poverty level, most people considered poor in California probably have net worths that are much closer to zero than $10,000.

A Rich Person’s Net Worth in the Land of Rich People

According to the most recent data from the California Legislative Analyst’s Office (LAO), Californians hold 17% of America’s net worth despite making up only 12% of its population.

The state’s residents own a combined net worth of more than $6 trillion, or about $160,000 per person — but, as with all of America, a tiny portion of households hoard gargantuan stores of California’s wealth. The LAO says California has roughly 1,650 ZIP codes, and the 300 classified as wealthy account for more than two-thirds of the state’s net worth. But, even among wealthy ZIP codes, “extremely wealthy areas” skew the average.

The LAO writes, “The state’s 30 wealthiest ZIP codes hold 20% of the state’s net worth while making up only 2% of the state population. The net worth of these wealthiest 30 ZIP codes is equal to the total net worth of the state’s 1,200 least wealthy ZIP codes.”

In short, it depends on where you live.

According to the San Francisco Chronicle, nearly all of California’s 10 richest residents — the four wealthiest of whom have 12-figure net worths — live in the San Francisco Bay area, where Charles Schwab says you need at least $4.7 million to be considered rich.

In Southern California, home to Los Angeles and San Diego, it’s $3.5 million.

In Central California’s Tulare County, on the other hand, where more than 28% of the population lives in poverty, most people would probably feel rich if they had the $10,000 that would classify them as poor in the state as a whole.

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