It's actually a problem in Australia where we all sort of treat each other as equals, for example our hospitality classes won't scrape and bow and call you sir, and everyone is ok with that. Racism has started to emerge because the only Indians who can get to Australia are the rich ones. All it takes is a few bad interactions and people start to write off the entire race, when I'm sure that 99%+ of Indians are actually pretty damn nice people.
I just wonder if those new generations will be less cheap but more entitled than ever.
I don't know about India, but in the US there is a bizzare cultural phenomenon where everyone wants to see himself as middle class. Being identified as rich is somehow faintly embarrassing.
You see all kinds of strange verbal gymnastics in trying to justify middle class status. Heck there is plenty of it in this thread!
So I suspect that is going on with your wealthy friends, and that it will continue in thier kids and grandkids (unless the overall culture shifts).
There are a few advantages. One difference is I don't worry about how I'm going to pay for e.g. a $1000 car repair (but it's still painful). I'm also more likely to hire someone for maintenance or gardening. Also, I theoretically could quit my job and live off my investments, but that's unlikely to happen.
Of course this is partially a linguistic argument. If you define upper class as the top income quintile, for instance, than I'm upper class, but that's meaningless.
I do wonder if I'm doing things wrong, and there's some secret for admission to the upper class. Maybe I should start flying first class, buy a Ferrari, stop shopping at Target, and hang out with rich people. (Although I think that would just make me nouveau riche, not upper class.)
(My motivation in this comment is that these HN threads tend to be entirely speculation, and the semi-rich never comment, so I hope to provide a useful perspective.)
What I wonder is what you think the upper class (as you define it) have that's so great or special that you don't. Sure you could cabin it so narrowly as to be people that e.g. get personal access to the President, or can get there kids into Harvard with a single phone call or something, but that definition is so narrow as to be useless (which gets back to the whole all Americans are middle class thing).
Having known several people with net worths in the 7-9 figure range, from brand new money through came over on the Mayflower, it really is a continuum. There's no secret handshake.
But that doesn't mean that somewhere along the continuum you really are living a different lifestyle than a family of four living in Northern California with both one parent working as a teacher and the other as a hygienist, each making $40,000 a year. They've got credit card balances, student loans, a long commute because that's where the affordable houses are, stress over how they are ever going to pay for college, and so on. You may shop at the same stores, but is that really a good indicator? Call what you have upper middle class if you feel like it, but that family is solidly middle class by any reasonable definition. So if there's a difference in kind, and someone has to give up the label, it shouldn't be them.
Finally, I should note that I find this little quirk of American culture fairly harmless. The one area where it can be pernicious is when it effects certain policy areas. For example, many people agree that the "rich" should be paying higher taxes, but since hardly anyone sees himself as rich, it is always a little farther out that the tax burden needs to fall. A good litmus test is the home mortgage income deduction, which is massively tilted to the high end of the income scale. If in justifying a high phase out you start to hear yourself say things like $1.5 million doesn't really buy you that much -- then you may be in the problematic zone.
If these are people who have "made" the money themselves in their own generation, I can see why/how they still view themselves as middle class. It's a mindset.
I have had the fortune of getting to know many SV millionaires who grew up in modesty/poverty, and still buy shorts from Target and pinch pennies madly. They have their mansions and their fancy cars, but they're still bound by the mindset of their lower/middle class background where they fought ferociously and squeezed themselves and their financial abilities to get to where they are today.
As long as that mindset persists, even very wealthy people won't consider themselves to be "upper class".
Give it one or two generations though. Their kids and grandkids will probably behave and believe that they're upper class.