DEFINITION of 'Upper Class'

Upper class is a socioeconomic term used to describe individuals who reside above both the working class and middle class of a social hierarchy. Individuals in the upper class have higher levels of disposable income, greater say in the political realm, and exert more control over the use of natural resources. While the upper class makes up a small percentage of the overall population, it controls a disproportionately large amount of the overall wealth.

BREAKING DOWN 'Upper Class'

From a historical perspective, the upper class was dominated by land-owning nobility and aristocrats. Over the years the term has expanded to include celebrities, politicians, investors and other wealthy people.

While those in the upper class (the rich) do exert significant control over economic and political developments, most production activities and consumption is done by the working and middle classes. The working and middle classes handle most of the economic production and consumption because they are much larger in number than the small upper class and require a larger percentage of the resources.

In a frontier or emerging economy, there are often only two classes. The working class, or poor, and the upper class, or elite. As an economy develops and better jobs and infrastructure create more wealth, a middle class emerges. The newly emerged middle class starts to have more disposable income which further advances the economy. Eventually, a divide within the middle class emerges and separates the average middle class from those who have significantly more disposable income but aren't yet considered "rich." These are the upper middle class people. The upper middle class usually evolves out of people from the middle class tier who are particularly resourceful or who achieve higher levels of education than the rest of the middle class. Examples of these people in today's society would be doctors and lawyers. They are not Bill Gates, but they are also making more money than a teacher.

RELATED TERMS
  1. Middle Class

    The middle class refers to individuals who fall between the working ...
  2. Share Class

    Share class refers to different types of shares a company issues ...
  3. Class A Shares

    Class A shares refer to a classification of common stock that ...
  4. Classified Shares

    Classified shares are different classes of common stock, each ...
  5. Class Of Shares

    Class of shares is an individual category of stock that may have ...
  6. Control Stock

    Control stock is equity stock owned by major shareholders of ...
Related Articles
  1. Investing

    What are Class B Shares?

    Class B shares are one classification of common stock issued by corporations.
  2. Insights

    Breaking Through The Middle Class

    While there is no easy way to the top, understanding some basic economics will help you you move up the economic ladder.
  3. Trading

    Why the American Middle Class is Shrinking

    Discover why the American middle class is shrinking and why that is probably good thing, although the Fed might be funneling growth to the ultra-wealthy.
  4. Investing

    The ABCs of Mutual Fund Classes

    Learn what mutual fund classes are, and understand the various types of shares. We'll also go over the pros and cons of each.
  5. Financial Advisor

    What's Behind So Many Mutual Fund Share Classes?

    Despite the confusion they create, the number of share classes offered by mutual fund families will most likely continue to grow. Here's why.
  6. Insights

    The Decline of the Middle Class: An Inside Look

    Find out what is behind the decline of the middle class in America and how the hourglass economy may effect consumption.
  7. Personal Finance

    Are We Losing The Middle Class?

    Find out where your income and lifestyle put you compared to the national average.
  8. Managing Wealth

    Top 3 Differences Between Business and First Class

    Should you pay extra to fly first class?
  9. Investing

    3 Benefits of Looking at Asset Classes Beyond Your Portfolio

    Discover three of the primary advantages for investors that can be obtained by diversifying their investment portfolio with different asset classes.
  10. Investing

    2016's Most Promising Asset Classes

    Find out which asset classes are considered to be the most promising for generating portfolio returns and reducing volatility in 2016.
RELATED FAQS
  1. What is the difference between Class A shares and other common shares of company's ...

    Discover how a company can break down its common stock into multiple classes and how these classes differ from one another ... Read Answer >>
  2. How are a mutual fund's C shares different from A and B shares?

    Learn how a class C share differs from a class A or B share in relation to a mutual fund. Read Answer >>
  3. How do I know when to "rebalance" my investments?

    In order to have a disciplined approach using "rebalancing style" investing, you must first setup a defined model that specifies ... Read Answer >>
  4. Why doesn't Warren Buffett split Berkshire Hathaway stock?

    Warren Buffet's fundamental approach to investing explains his no-split policy on Berkshire Hathaway stock. Read Answer >>
Hot Definitions
  1. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  2. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  3. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  4. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  5. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  6. Cost of Debt

    Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure.
Trading Center