Characteristics of the Upper Middle Class: Are You One of Them?

The number of upper middle class people in Indonesia is currently declining because many have dropped to lower economic levels. This phenomenon is triggered by various factors, ranging from uncertain economic conditions to increasingly expensive living costs.

A person usually moves from middle to upper middle class as their income and net worth increase. Although there is no rigid definition, there are several signs or indicators that show someone has reached that economic level.

In general, the middle and upper middle class groups have a better standard of living and lower levels of financial stress. Compared with the lower class, they have broader financial freedom in meeting their living needs.

Based on data from Statistics Indonesia (BPS), the number of middle class people in Indonesia in 2019 was still 57.33 million, equivalent to 21.45% of the total population. Then, in 2024 only 47.85 million remained, equivalent to 17.13%. This means that 9.48 million middle class citizens have fallen in class.

According to Nicole Nicolet, owner of Let’s Make Life Great, the middle class includes those who can afford a home, annual holidays, and education investment for their children. Meanwhile, the upper middle class can enjoy more holidays and live more comfortably.

People in the middle class usually have to work until retirement age. Meanwhile, the upper middle class can achieve retirement earlier without worrying about future finances. So, what are their characteristics? Here is the explanation quoted from Go Banking Rates:

Key Characteristics of the Upper Middle Class

One sign that someone is in the upper middle class is the ability to have surplus money after meeting all investments and major expenses. People in the upper middle class often have leftover funds even after maximising retirement contributions and covering all major expenses.

They are not too worried about using these additional funds because they have stronger financial security. Rose, a financial expert, says that the upper middle class has budget room for entertainment such as holidays or regular dinners out.

Ownership of Diverse Assets

Those in the upper middle class usually have more than just cash. Diverse investments such as shares and rental property are often part of their portfolio, which helps strengthen their financial security.

Paying off a mortgage early can be one sign of the upper middle class, although it is not always required. Nicolet mentions that the ability to pay off major investments without restricting lifestyle is a key characteristic of this class.

Living in More Expensive Neighbourhoods

One way to see whether someone has reached the upper middle class is from the location of their residence. According to Rose, living in a highly sought-after postcode is a strong sign that someone is in the upper middle class.

However, it is important to remember that this is not just about appearance or simply following the lifestyle of neighbours. People in the upper middle class usually do not feel the need to compare their wealth or status with others.

Minimal Financial Stress

Another sign of the upper middle class is the low level of financial stress when facing bills or unexpected expenses. If a financial emergency arises, they are able to handle it without panicking.

Rose adds that having financial calm in facing large unexpected expenses is a strong indication of having reached the upper middle class. Minimal financial stress allows them to enjoy life more peacefully.

Positive Lifestyle Changes

Higher income and significant net worth often bring about a better lifestyle. However, this does not mean living beyond one’s means, but rather being able to buy goods or services that were once considered luxury items.

Nicolet says that being in the upper middle class means there are almost no limits in lifestyle. They may not have reached billionaire status, but it is enough to enjoy most existing living standards.

Able to Fund Higher Education

Higher education is one of the major expenses that often requires someone to go into debt. However, those in the upper middle class are able to fund higher education, both for themselves and their children, without having to take on debt.

Rose explains that those in the upper middle class can fund the best education without thinking too much about the cost. This is one of the important signs that someone is in a very good financial position.

Possibility of Early Retirement

For many people, early retirement is a dream that is difficult to achieve because of debt problems or daily expenses. However, for the upper middle class, early retirement is more likely because of diverse investments, passive income, and financial security.

Nicolet says that being in the upper middle class often means being able to retire early without many worries about future financial problems. This factor gives them more freedom in choosing when to stop working.

Having Multiple Sources of Income

People in the middle or lower class usually have only one source of income, such as a permanent job. However, the upper middle class almost always has two or more sources of income, such as a business or passive income from investments.

This additional income can come from a high-paying job, business ownership, or income-generating investments, such as share dividends or rental property income. This income diversification helps strengthen their financial position.