Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck

Here are some general figures to use as a guide when determining where your net worth puts you:

Joe Torre, an investment counselor with RealWealth, added, “Below HNWI is mass affluent at $100K to $1M in liquid assets, and that would be like your middle class designation.”

When you’re in the middle class, you’re more likely to rely on some forms of debt to fund your lifestyle. This could be an auto loan or a mortgage loan, for example. Or it could be student loans for your kids. You might also use credit cards to cover certain expenses — like a family vacation.

“The rich are likely to have a more strategic approach to debt, using it to leverage investments rather than for consumption,” said True Tamplin, founder of Finance Strategists. “Moreover, the wealthy have the means to settle debts without significantly impacting their lifestyle or savings.”

How you allocate your paycheck each month is another major indicator of whether you’re rich or middle class.

“The affluent typically have a tendency to lead an extravagant life filled with designer goods, luxury travel, and high-end experiences. They might live in expensive neighborhoods, drive luxury vehicles, and dine in upscale restaurants,” said Kullberg.

“The middle class is often more frugal in their choices, seeking financial stability through careful expenditures,” she continued. “They might live in middle-income neighborhoods, drive reliable and affordable vehicles, and shop with value in mind.”

Explore More: How Much Household Income Will Be Considered Upper Middle Class in 5 Years?

Both middle class and rich individuals can generally cover financial emergencies, but if you earn enough — or have enough set aside — to cover anything that comes your way, you’ve likely crossed the threshold.

“For the affluent, an unexpected financial setback or an emergency is less likely to alter their standard of living, thanks to substantial savings, emergency funds, and a wider safety net,” said Tamplin. “The middle class might experience considerable strain from unexpected expenses, often leading to increased debt or depletion of savings.”

According to Thomas Brock, CFA, CPA, and expert contributor at Annuity.org, you’re likely rich if you have a taxable investment portfolio — excluding your retirement accounts — and you have business interests that generate enough passive income to sustain your lifestyle without needing an income.

Kullberg added, “The rich have robust financial capital, typically with large cash reserves, investments and insurance coverage, which enables their portfolios to withstand shocks, including economic ones, and unexpected expenses. They can also rely on multiple income streams and other resources giving financial buffers and assurance.”

In comparison, middle class individuals may not have quite as much financial stability or multiple income sources.

While middle class individuals tend to have extra money for impulse buys and unexpected expenses, they might not be set for life. To be considered rich, Brock suggested that you should have a retirement nest egg that, by the time you retire, will easily cover your family’s financial needs for the rest of your lives.

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This article originally appeared on GOBankingRates.com: Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck