Ever wonder why there are so few people around you that leave middle class? Why is it that as salaries increase and years making good money increases, our social status is stagnant? Unfortunately, people generally don’t know how to manage money. More to the root of the problem, people cannot control their bad impulses.
Sure, you can save the little bit of money that would be considered “TYPICAL” to save. For example, the average american saves roughly 5.7% of their income. But HOW DO YOU BECOME MORE WEALTHY THAN MIDDLE CLASS??? The answer is really not far fetched and out of reach like we’re constantly told. There are a sea of people we hear complaining about how tight money is but what happens we we dig into the issue? We find that societal NORMS, are putting a veil over everyone’s eyes. When all you see is everyone buying and driving nice vehicles, the banks telling you that you make enough money to afford one yourself, and your spouse pestering you to get one, YIKES! It’s no wonder we feel entitled to these things. This phenomenon is not unique to cars, but nearly every part of our life….
So that begs the question, What difference do these SOCIETAL NORMS make with our financial standing? Well it is shocking. I can honestly say that nearly any profession can benefit from avoiding the pitfalls of consumerism. That’s right, you can be a nurse surrounded by all of the middle class flock, and become UPPER CLASS WEALTHY. Or the same applies to a carpenter, a store clerk, an HR Rep, an engineer, a salesman, a dock worker, a warehouse forklift driver, ANYONE!
Let me give an example of Two families where each the Husband and wife make $61,000 Per year
Each Household Makes Combined $122,000 Annually
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These little things really do add up as you can see in the table above. I personally had to loose it all before I really woke up to this. Prior to that, I was a consumerism wizard. I would scoff at the quarter on the ground in the parking lot. I would not only go to McDonalds, but buy everyone’s meals. I would intentionally buy the more expensive haircuts and more expensive clothes because it made me FEEL RICH. I spent like a fool looking back.
The real difference between Middle Class and Upper Class isn’t money though. It’s FREEDOM. Freedom comes with financial independence. As soon as your investments can generate enough income to pay for your living expenses, you’re free! You can see just how drastically that is shown up abouve in the table. The Middle Class family is awful with their money in the most typical ways. THEY WILL ALMOST NEVER BECOME FINANCIALLY INDEPENDENT. The Ideal family is ONLY 7.5 YEARS AWAY from being financially independent (assuming they had zero net worth to begin and get a rate of return at 7% on investments).
This is a lot to process, but the most important thing to draw from this is:
– Little expenses make a HUGE impact on your way to financial independence
– You will never Leave Middle Class by doing what everyone else is doing with money
– You HAVE THE ABILITY right now, to become financially successful
That my friends is how to leave middle class. In the future I plan to explain how you can find your own net worth, annual spending, and combine it all to find your own Financial Independence Date!