Thursday, May 2, 2013

My Tough Love for my Fellow Middle Classians

Perhaps I’ve been getting my NERD on more than usual following Money Smart Week, but my attention has been turned yet again to another survey. In this one, completed by the Allstate-National Journal Heartland Monitor Poll, the pulse of the middle class was taken and by and large it did not paint a rosy picture. Here are a few highlights:

  • 54% defined middle class as those who could keep up with bills, not get TOO buried in debt and not lose their jobs
  • 40% said it is only realistic for the “upper class” to pay for a child’s college education, retire comfortably and survive a health care emergency
  • 64% believe Congress is making things worse for the middle class
  • 55% said major financial institutions are making things worse for the middle class

Now normally I would respond in a loving fashion with a healthy dose of optimism, and say something like, “If more people would follow Dave Ramsey’s total money makeover plan, they will find the light at the end of the tunnel.” But today I’m feeling a bit more rambunctious than usual.

Particularly what irks me is that the majority of those surveyed feel that it is out of their control whether they succeed financially. More than half feel that the government and financial institutions are out to get them! In other words, as I will happily translate, those surveyed stood and declared, “The people I voted for and the debt I signed up for are keeping me from where I want to be financially.”

Bull…you know it and I know it. To me the idea that something outside of ourselves can hamstring us financially, conversely means that those same outside forces are responsible for making me thrive financially. My employer did not welcome me with a bouquet of flowers and a one million dollar a year income just because I breathed air. I provide a service for work that they need to be done and they pay me what they deem to be market value for that work being done. If I didn’t think the value was fair or that I could get paid more for the same line of work elsewhere, then I would proceed to find something elsewhere.

And as for the government wreaking havoc on the middle class and single handedly stifling our financial prosperity: it’s just not true. I’m just as big a critic of the US government as the next blogger, but short of them taxing my earned and investment income at 90%, it’s simply false to even think that they have control over any aspect of my financial prosperity.

To the middle class naysayers I’ll assert this: I’ve been living and existing in the exact same economy as you have. I worked my tail off and made sacrifices to get to where I am today. I got on a budget, lived on less than I made, stopped borrowing money and paid off all of my debt. I’ve also invested for growth in the stock market and have been receiving better than expected returns. The government, corporations and “the upper class” had absolutely nothing to do with the decisions that I made, make and will make in the future.

What I found even worse were some of the personal commentaries extracted from the study:

A graduate student shared, “The middle class has become a treading water position…Opportunities have been stifled in the past 20 or 30 years.” A suburban dad noted, “I feel sorry for my kids – they’re just getting out of college – because they have nothing to look forward to. They’re not going to have the ability in the near future to buy a home. There are thousands of people who are going to be stuck with their student loans.” The last gem was from a trucker, whom added, “Everything is going up, but wages are staying the same. By the time I retire, I hope I have Social Security, because other than that I’ve got nothing.”

Point 1 – We have to make our own opportunities. Although I do not envision myself to be a business owner, I plan, through our financial decisions to live on less than we make, never have debt and pay cash for our house, to one day work a part-time job and live primarily off investment income. This way I can spend more of my time with my family, friends and volunteering for organizations and causes that touch my heart. I have my roadmap and I’m making small intentional choices to get there.

Point 2 – Suburban dad, it was your (and your dumb kids) choice to take out loans for college. You could have had them go to a community college, transfer to an in-state 4 year university and work their way through college paying their own way. Sure, it might take 6 years to cash flow it, but your kid would come out with a degree, no debt and work experience. Sounds like a better option than student loan debt that gets carried around for decades. And unless you can put at LEAST 20% down on a home, you shouldn’t buy one.

Point 3 – Dude, if you see the oncoming train of despair coming right at you and you make 0 changes to avoid that oncoming train, then man, I think you get what you deserve. Say this trucker is 50 and started working at 20. If he had put away $100 a month during his entire working lifetime, and let’s just say he made 8% on his investments (in my opinion, a very modest goal), then this dude would have $150,000 in a retirement account. And at 59 ½ he would have over $300,000 thanks to the power of compound interest. That $300,000 self-funded retirement picture looks a lot rosier than relying on Social (In)Security to eat.

Truth be told as I come down off this soapbox, I have to admit that I do not know these people’s stories. I don’t know what their car payments, job layoffs, loan balances or their budgets look like. Do they have large income shovels or small income shovels? Statistically I can get an idea through surveys like this, but I will never know the individual, unless I know the individual. So all I know for certain is what is happening under my roof. And under our roof we have made a lot of the tough choices through the last 4 years to live on less than we make, invest wisely and put the right pieces in place to not only thrive, but withstand storms through tough economic times. Through God’s word in how to handle money we have thankfully prospered and are looking forward to living and giving in ways we used to only dream about. But we pulled ourselves up to get there. A tax break didn’t do it, a government program didn’t help me find term life insurance, and my employer doesn’t force me to live on or off a budget. We bootstrapped and put the financial prosperity wheels in motion. It may be slow, it may be ugly to financial snobs, but step by step, quarter after quarter we are getting to where we want to be. 

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