Saturday, 30 May 2020

Are You B40, M40 or T20?

Department of Statistics did a survey on Malaysia household income in 2016. It shows the income level of B40, M40 & T20 groups in Malaysia.

B40 = Bottom 40%
M40 = Middle 40% (what we refer as middle class)
T20 = Top 20% 

Household income means combined incomes of husband & wife if both are working, and I suppose it is take-home income (after income tax).

Household Income per month (RM)

Range Mean Median

B 40 <4360 2848 3000

M 40 4360 – 9619 6502 6275

T 20 >9619 16088 13148

According to the statistic, if both of your wife and yourself earn a combined income of RM5000 per month, you are classified as "middle class". 

Wow, it sounds great to be a middle class right? However, can RM5000 a month give you a middle class lifestyle especially if you have children?

These are 2016 figures, which are 4 years ago. I'm sure that in general, our income level has increased whereby RM5000 household income might be categorized as B40 now. 

The numbers below compare household income level of 2016 (in blue) and 2014 (in orange). The mean household income of M40 has increased RM840 from RM5662 to RM6502  in two years time.

But, please don't forget that inflation has caused the cost of living to increase throughout the years as well. 

So, our quality of life might not change much even though our income increase, as we also spend more at the same time.

If your household income is RM13,000, you are at the median level of the top 20% which means only 10% of Malaysian households earn more than your household.

Then you must be rich. If not you, who are those people who stay in million dollar houses and drive Mercedes, BMW, Lexus and other luxury cars? 

Is RM13,000 a month really considered "rich"? Well, I'll discuss this later.

Which group are you in, B40, M40 or T20? 

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