The Middle Class is Dying: Here’s How to Rise Ahead in the Aftermath

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There is no real middle class in America. It’s a myth you’re being sold.

You might have great pictures with cool filters on Instagram, lots of Facebook friends, a car or two, a reasonably nice home or new condo, and some great clothes. You might even have a great job with a nice salary. Yet, to say you are in the “middle class” might be a stretch.

It might feel good for many to envision themselves at least in the middle class. You’ve gotten somewhere, at least you aren’t at the bottom, right? But what does that really mean today?


The Pervasive Issue of Debt

For most, it means you’ve got a lot of debt. A LOT of debt. And you work a LOT. You may have some cool stuff, a five or even six-figure income — though you probably don’t have a lot left over after all the bills.

Some important questions to ask:

  • What’s your net worth?
  • How much surplus income do you have each month?
  • How set are you for retirement?
  • Are you on track to leave the legacy you want to?

I tackled some of the data on just how short Americans are coming up in this popular post on BiggerPockets. The bottom line is that with your mortgage, car payments, credit cards, insurance, and taxes, there’s usually nothing else leftover — at least not enough. Most people are working like crazy in the rate race. We get a few nice shiny things that make us feel good and a “middle class” title. But that isn’t nearly enough.

Related: America’s Middle Class is in Bad Financial Shape: Here’s How Real Estate Can Help

It’s generally not enough to retire well, if at all. It’s not enough to provide most with the freedom to spend as much time with the people they love as they’d like to. Or to spend more time on things that really matter to them.

The Bad News

The bad news is that it is going to get a lot worse for many who consider themselves middle class. Grant Cardone says, “The middle class is no longer a safe haven or the desirable destination it once was.” Some believe this middle class is effectively being pushed downwards and is evaporating to become a 99% and 1% situation. In fairness, Cardone says it’s not your spending problem, it’s your income problem. He says you no longer need to shoot for $120k a year — “In reality, you need to become a millionaire.” That’s the new middle class.

Some are spending too much on the wrong things (for now). Others have become minimalists. Either way, neither group is really enjoying life as much as they could and are not financially prepared for the future.


The Good News

The good news is that there is hope. I believe everyone is fully capable of changing this dynamic in their own lives and for their families. Yet, this is not the time to be complacent. You can’t get lost time back. And when it comes to money, time can be your best ally or worst enemy.

Related: Building Wealth: What Key Practices Separate Millionaires From the Middle Class?

Now, there is nothing wrong with having a minimalist life or working hard. Though if you want more time freedom, financial security, and most importantly, the ability to live to your full potential, you’ve got to get ahead in the money game.

One of the few ways that I know available to virtually everyone to change this dynamic in their lives for the better is real estate. Use real estate to build wealth and passive income. Real estate leverages the market, other people’s time and expertise, and can effectively bend time and money to your benefit.

There are many ways to get started in real estate. Choose one. Get going. Because time isn’t going to wait for you.

What do YOU think will happen with the American middle class in coming generations?

Leave your thoughts, questions, and opinions below!

About Author

Sterling White

With just under a decade of experience in the real estate industry, Sterling currently manages over $10MM in capital, which is deployed across a $26MM real estate portfolio made up of multifamily apartments and single-family homes. Through the company he co-founded, Holdfolio, he owns just under 400 units. Sterling was featured on the BiggerPockets Podcast and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single-family investing and apartment investing to wholesaling and scaling a business.


  1. The author states: “One of the few ways that I know available to virtually everyone to change this dynamic in their lives for the better is real estate. Use real estate to build wealth and passive income. Real estate leverages the market, other people’s time and expertise, and can effectively bend time and money to your benefit.”

    Wouldn’t it be nice if Wall Street spread this message but it won’t, not unless and until its buys a major IRA Custodian that offer Checkbook Control IRAs where off Wall Street menu items like Real Estate” could be an investment choice . And please don’t suggest REITS, they are not real estate in the traditional sense and the only reason Stock Brokers and Mutual Fund Sales people push them is because of their lucrative 5% – 10% commission pay out.

    In America there are 45,000,000 IRAs collectively worth six TRILLION dollars and 95% of those six TRILLION dollars are invested in …., yep, Wall Street products. How can such the gap between Wall Street and Real Estate be so wide? Because since the 1970’s Wall Street through its Stock Broker and Mutual Funds sales people minions has effectively convinced the public that basically they are incompetent to handle their own IRA funds and these funds should be entrusted to Wall Street. This deception has worked incredibly well and its success partly due to Wall Street never, ever being challenged.

    Meanwhile during the same past few decades Wall Street’s only real rival, National Association Of Realtors (NAR) that boasts of 1,000,000 Members has done nothing to educate its constituency that investment real estate is an excellent candidate for IRA funds and should be presented to the 45,000,000 American IRA Owners.

    Don’t hold your breath for NAR to roll out an education series of TV Ads promotion real estate for one’s IRA. I’m not a “smoking gun” conspiracy kind of guy but for the life of me I cannot understand why for decades NAR has elected to sit on the sidelines and let Wall Street win the financial Super Bowl every single year. NAR doesn’t even suit up for the game.

    Imagine the following series of National TV Ads.

    Scene #1 depicts a young, mid to late twenties couple buying their first home and thanking their Realtor.

    Scene #2 depicts the same mid to late thirties couple with two small kids and a dog buying their first Duplex and thanking their Realtor.

    Scene #3 depicts the same mid to late forties couple with teen age kids buying their first Fourplex and thanking their Realtor, especially because he/she introduced them to 1031 Exchanging and zero taxes were due.

    Scene #4 depicts the same mid to late fifties couple buying their first Eight Unit Apartment House and thanking their Realtor, especially because by 1031 Exchanging they paid zero taxes.

    Scene #5 depicts the same mid to late sixties couple buying a 16 unit Apartment House and thanking their Realtor, especially because by 1031 Exchanging they paid zero taxes.

    I think you get the picture, it’s a win-win situation for a Realtor and his/her clients.

    Be honest, how much of this SIX TRILLION DOLLARS would you like to have?

    In answer to the author’s question: “What do YOU think will happen with the American middle class in coming generations?”

    The American middle class certainly won’t own any real estate with their IRAs because Wall Street will continue its deception, i.e. you are incompetent to handle your own IRA money, and NAR will continue to sit on its thumbs if it isn’t purchased by Zillow and perhaps even closed down.

    • Patrick Buttermark

      I love articles like this because it’s basically the same thing I’ve been saying for years, but very few listen. While I’m no fan of Wall street bankers,brokers etc. and do think Real Estate can be a viable alternative for some- not every market is easily accessible. New York City and San Francisco among others are exorbitantly priced causing a high barrier for entry- for a property that may have negative cash flow.

      Unfortunately in life for there to be winners there must be losers-everyone CAN’T be a Real Estate Investor.If those 45,000,000 IRA owners were out looking to buy property it would be increased competition for the same properties driving the prices way,way up. Also if all those people are looking to buy there would be less people looking to rent, driving rents down. This, in my opinion is why you don’t see anyone pushing a large scale shift toward IRA real estate investing.

      As for REIT’s if one owns them through a mutual fund or uses some old school stock broker to buy them, they’d be paying high fees/commissions. They can be bought through (well known) online brokers for as little as $4.50 (unlimited shares) commission.The risk factor in REIT’s is that they are subject to capital depreciation through price fluctuations and I am by no means recommending them.

      Please don’t take my response as me trying to “poke holes” in your comment, I’m merely giving a different point of view taking the law of unintended consequences into consideration. I agree with you that people need to know there are other alternatives than the S&P 500 roller coaster. It’s important for us as investors to share the knowledge we’ve gained with people. Unfortunately most won’t listen and of those who do,few will take action.

  2. Patsy Waldron

    I agree that the middle class is being hollowed out. Decades of stagnant wages and salaries means that today’s middle class’s buying power is lower than the previous generation’s. Part of what this means, however, is that many are unable to get into home ownership and real estate investment. Low starting salaries coupled with mountains of school debt equals high debt to income ratios. Strict lending standards make entry difficult. Competition in many hot markets compounds the problem for the beginner investor.

    At the end of the day, though, the fact remains that real estate is indeed one of the very says to ensure a more secure income, the way post-sexondary education used to.

  3. Christy Greene

    I think the Middle Class is shrinking both because of external changes that are happening and internal decisions that they are inflicting on themselves. When I say external changes, I mean, things that an individual alone cannot change such as State and Federal tax laws, cost of commodities, increase in living expenses,etc. The internal decisions that I see the middle class is making is that they are living as if they are wealthy such as taking costly vacations, buying expensive cars, eating out as a lifestyle,etc. For example, one of my clients purchased a $50k brand new truck. The payments are over $500/month for 8 years…..he rationalized it with working hard and not having a brand new car for the past 14 years so his kids could attend extra curricular activities….He just sealed the deal so that he won’t be financially free…unless he sells that monster and gets a beater….I don’t think he will be doing that, though. The middle class pours money into liabilities because they think “they deserve it and they work hard.” The wealthy put it into assets that increase in value and brings in more money. The middle class wants it now, the wealthy are willing to wait.” This is why the middle class is shrinking.

  4. Sham. Pure sham. However it deserves a different article that offers clarity that is not an exercise in “managing truth.” And very destructive to present this as reality – like a shot of booze does not make a meal (some people think so.) Now you need a million dollars balanced on the backs of the next layer in the pyramid. I think there are alternatives.

  5. “Real estate is not going to help the consumers.” That use to be true before the 2007 crisis, but not anymore. The middle class is now heavily indebted; most of their homes are rather liabilities than assets. The real estate prices are constantly rising, whereas the salaries are being stuck at the pre-crisis level. So how exactly is real estate going to help middle class consumers?

    • You ask: “So how exactly is real estate going to help middle class consumers?”

      What is the alternative to buying a home, renting for the rest of one’s life?

      Say there are two twin sisters Jane and Joyce age thirty, and both have identical jobs, income etc.

      One day while visiting a development that offers FHA 3% down financing Jane becomes convinces she should buy a home. Joyce scoff at her rationale and says she’ll rent.

      In the blink of an eye 30 years go back during which Jane made repairs to her property but enjoyed the tax deductions for the Mortgage Interest, property tax etc. Also, during those 30 years the value of her property increased from $150,000 to $450,000.

      Joyce had rent increases almost every year and while her sister Jane’s Mortgage payments remained the same for 30 years Jane’s rent increased from $500 monthly to $1,500 monthly.

      At their 60th birthday party Jane rejoices because her mortgage is at last paid in full. Joyce laments because she is still paying rent that she knows will be present her entire life and very likely to rise again and again.

      Who do you want to be, Jane or Joyce?

      • Josh Klocker

        While it looks great in theory, you’re leaving out much of why, in my opinion, it’s not that large of a gap in the end for home buyer/renter. Let’s proceed with your figures, a 300k increase in net worth over 30 years. There is a new roof, furnace, a/c, complete interior remodel and most likely exterior remodel to get market rate of 450k out of that property in 30 years. If Jane isn’t a handy woman, she just spent a large sum of that increase on the above mentioned. This doesn’t include real estate taxes, insurance, repairs, and maintenance. All these items add up over thirty years, anc vary greatly depending on location in this country. But most likely will eat up the better part of the 300k. The tax benefits can be either here nor there depending on what you earn. I think what most people get out of it is the pride of ownership and not worrying about being uprooted (by a landlord at least). I like to look at it more as a forced savings more than anything, which is what many people need.

  6. Peter Mckernan

    I agree 100% that people in the middle class (so called middle class) are spending money on unnecessary items, or saving so much money they have become minimalists. Either way, you hit a wall at some point and realize that it is the wrong move!

    As a person in real estate, or a person in general grows their knowledge they realize that their income can increase in so many ways. Growing your income opens so many more doors, and it is good to think about what that money can do for you, not what you are doing for that money!

  7. John Murray

    I always enjoy finding what others think of success. Worker bees are great team players and seem to be happy sitting in traffic and going through the daily activity of their robotic existence. Whether the individual thinks they are working class or any other level of worker bee. You are a worker bee, chained to your lifestyle. This could be enough for the worker bee to be happy. I’m not a great team player, I’m not a great contributor to the collective, I’m not a worker bee. I’m an entrepreneur that sees opportunity, works hard and enjoys my financial Independence. When the Epiphany comes for the entrepreneur, the release from the mundane treadmill is so empowering it’s stronger than any force and now the addiction starts.

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