Maggiulli’s analysis shows the angsty, existential Level 4 was just 7% of the country in in 1989, but as of 2022/23, that had shot all the way up to 18%. Admittedly, inflation means that a millionaire in the late ’90s would have a net worth of around $2 million, also as of 2022/23. But still, he says, this economic class is much bigger than it used to be, especially since the pandemic, and he thinks it’s “starting to have all these impacts throughout the rest of the economy.”
This demographic expansion, Maggiulli says, has sparked unexpected economic side effects, from crowded airport lounges to bidding wars for housing and luxury amenities. ““The economy wasn’t built to handle this many people with this much money,” he observes, linking “scarce resource” frustrations to the surging population of affluent Americans. “They’re all competing for a small pool of resources,” he says.
The weirdest thing, Maggiulli says, is that these people are objectively very successful. “They’ve done well in life … but on a relative basis in the United States, the competition for these higher-end goods is very high, so now it feels like we’re all canceling each other out with all this extra wealth.” Wealthy level 4 Americans could always move somewhere else, where their money would go much further, but they are mostly staying in the U.S., where they don’t feel like the millionaires that they’ve become.
It really is different from the late ’90s to now, Maggiulli says, adding that in terms of purchasing power, an American with a net worth of $1 million back then would rank in the top 5% of wealth, whereas that status in the 2020s belongs to someone worth $4 million. “There’s so much wealth being created that the upper end is seeing this competition like never before,” he adds.
Maggiulli’s analysis extends to the composition of wealth across classes: “The poor own cars, the middle class own homes, and the rich own businesses.” He stresses the “rich” in America tend to hold assets like businesses and stocks, not just real estate or commodities. To truly shift up levels, the kind of assets you own really matters.
For Maggiulli, the key takeaway is adaptability. He analogizes personal finance to fitness: “You can imagine a fitness instructor giving different advice to someone who’s morbidly obese versus someone who’s a well-trained athlete.” Likewise, financial strategies must shift as individuals progress up the “wealth ladder.” This particular ladder isn’t one that you’re meant to keep climbing forever, but a very large ladder with a lot of plateaus on it, some where you stay forever. He says you need to step back and reassess: “Do I need to keep climbing? Is this right for me?”
Maggiulli says he’s not advocating through his book for people to choose one particular path or another, but to be aware of their wealth and their trajectory. “I think a lot of people get there, and they say, ‘Wait, do I want to keep going down this path? Or maybe I can take my foot off the gas and choose a different path where money is not the only thing I’m focusing on.’”
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
