Maggiulli’s insights are rooted in data and everyday observation, but he believes the upper middle class is going through an “existential crisis,” as he noted on his blog “Of Dollars and Data.” He talked to Fortune about what he thinks is going on: “The economy wasn’t built to handle this many people with this much money,” he said, hinting at his research on what he calls the new economic classes of the United States.

In “The Wealth Ladder,” Maggiulli proposes a new, data-backed framework for thinking about affluence. It’s a much bigger topic than just Level 4. He divides American households into six wealth levels, ranging from under $10,000 (Level 1) to $10 million-plus (Level 5 and beyond). The most populous segment is Level 3—those with $100,000 to $1 million in wealth—but he says that Level 4, the so-called “upper middle class,” is notable for its rapid growth and unique challenges.

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.”

The existential crisis of the upper middle class in the 21st century

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.

UBS Global Wealth Management noticed a similar trend in its 2025 edition of the Global Wealth report, seeing a dramatic rise in the “everyday millionaire,” or EMILLI. At the dawn of the millennium, there were just over 13 million EMILLIs worldwide, UBS found, but that number had shot up to nearly 52 million—a more than fourfold increase in less than 25 years. Even after adjusting for inflation, the number of EMILLIs has more than doubled in real terms since 2000. “There’s a good portion of [these Level 4, everyday millionaires] that feel like they don’t have enough,” Maggiulli told Fortune, “and they feel like they’re just getting by, even though statistically they’re in the top 20% of U.S. households.”

Maggiulli’s remarks recall those of Charlie Munger, Warren Buffett’s long-time right-hand man at Berkshire Hathaway, who died in 2024. The previous year, in his last appearance at the annual meeting for his newspaper holding company, Daily Journal, Munger sounded a similar tune about things being ever better but people feeling ever worse. “People are less happy about the state of affairs than they were when things were way tougher,” Munger said, then made a striking comparison. “It’s weird for somebody my age, because I was in the middle of the Great Depression when the hardship was unbelievable.” Munger said he was powerless to change how unhappy people felt “after everything’s improved by about 600% because there’s still somebody else who has more.”

The importance of assets

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.

Nick Maggiulli

Maggiulli told Fortune about the long-anticipated “Great Wealth Transfer,” when baby boomers pass on their $124 trillion fortunes to the Gen Xers and millennials now in or entering midlife. As baby boomers age, their assets are expected to flow into Gen X and eventually millennials, a process he frames as “very normal.” But he cautions that much of this wealth is tied up in illiquid assets like real estate, potentially distorting Americans’ perception of their own affluence.

He’s also candid about what he calls the “broken housing market.” Even affluent adults are forced into renting more often than not: In fact, Maggiulli’s research shows there have never been so many millionaire renters before. Maggiulli says if it seems like economic conditions have driven many Americans to postpone homeownership, he would know, because he’s one of them. “What that means for me personally is that I’m just gonna be renting for a lot longer,” Maggiulli tells Fortune, “because it doesn’t make sense to buy, especially where rates are, prices, everything.” The housing market as currently constructed just “doesn’t add up” for his situation.

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?”

Alex Bryson, professor of Quantitative Social Science at University College London, told Fortune something similar in an interview about his research into 21st century labor markets, social mobility, and young workers. “People at that time in their lives, when they’re looking to build careers and move on and acquire property and, you know, all the the ladder-type things … it feels as if, perhaps, for some of them, somebody’s removed some of the rungs on that ladder.” Bryson added that “we haven’t necessarily got the same career structures and patterns” in the current economy as in the past.

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.