Hopefully someone can offer some advice. My DD7 comes back from school asking if we are rich. Apparently there was some kids discussion in school. My automatic answer was no we are middle-class. But she retorted how come we own a XYZ (XYZ being a clear marker) if we are not rich.

I am not sure how to handle this discussion. Can anyone offer a perspective.

I treat all discussions like this (where there is no objective sort of "truth" as far as I can tell) as ones where context is the more critical thing to provide.

So provide context-- what does "poverty" mean? Who is "poor" and what does subsistence level mean in various places? Is your community diverse in S/E terms? If so, examples should be abundant, and if not, that is in and of itself a major point for discussion.

We have had these talks from age 4 onwards when DS started to understand what being rich and poor means. He is severely affected by the thought of homeless children, hungry children, homeless adults and poor people. He once told me that he hates billionaires because they like to amass all that money for themselves and they don't share! Needless to say, we have had many discussions on capitalism, free market economies, socialism, communism etc. I have pointed out the contributions of philathropic billionaires who have taken up causes that governments could not fix.

I always say that being rich and poor are relative. Our family has enough to eat and live on compared to billions of other families (especially in the third world) - to them, we look very rich. I also tell him that I consider our family not rich compared to people with millions and billions of dollars in assets. I tell him that we belong to a salaried class of people who depend on their paycheck and the hours we spend for the employer for the money we make. He comes back and asks how we could afford a house, an xyz brand of car, school fees, extracurriculars and good quality food - I resort to humor and tell him that those are the reasons we are not rich - we spend all our money on those things with nothing more left in the bank

This topic is of interest to me... although right now, the concern we are facing from DS is whether we would run out of money to be able to keep the family intact. But I do expect that he becomes more aware of the immediate world around him, that he may become more aware of rich vs poor and what that means, so it is interesting to me to see how others handle that.

DS3 started to ask us earlier this year - after we read a story of 3 little pigs, where it mentioned that the reason that the 3 little pigs were sent to make their way in the world because the sow had no money to keep them - whether we had enough money to keep him and his sister with us and what would happen if we did not have enough money one day...

I was highly impressed by this picture book, which turns the concept of rich and poor around. The child in the book is from a family where the parents have decided they value certain immaterial things over money. It might have a place in a discussion of wealth and 'being rich'.

The Table Where Rich People Sit by Byrd Baylor

Here's a webpage to convert household income to a percentile (2012 numbers).
http://www.nytimes.com/interactive/2012/01/15/business/one-percent-map.html?ref=business&_r=0

That is nifty. I was going to respond that it depends on where you live. But this does take that into account.

I like the line reasoning articulating that we need to work hard for the living and that is why we can afford the things and not much more. Hopefully will help keep them grounded.

BTW the wealth percentile seems quite besides the point. :-) we are trying to argue our way down not up!

So your percentile is high? It sounds like you are rich!

You are rich!

Embrace your wealth and have your daughter embrace the power that comes from being to the manor born!

Also, provide instruction on the appropriate social requirements of noblesse oblige.