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.
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.
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!