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This afforded them the opportunity to own their own home, a car, take an annual trip to the lake with the family, and provide an environment that allowed their children to have even greater opportunities than they did.
That wouldn't be true. You ignored attitude. 1,100 sq ft homes were available, but Americans, bought 900 sq ft "starter" homes, then generally sold those prior to the children reaching junior high age and purchased a larger home.
Also, America did not have "2 car families" until the early 1970s.
Quote:
Originally Posted by Lincolnian
IMHO, one of the reasons the "middle-class" lifestyle may be on the decline is because it is more centered on the individual, consumer products, and status symbols, and less centered on the community, relationships, and civic stewardship.
Well, no, life-style is on the decline because of stupidity.
The Me Generation and the Me, Myself and I Generation don't know what a "starter" home is. A home can be an investment, but investments cost money; they are not free. Do you buy $250,000 in stocks "no money down?"
No, you put up $250,000 and then the investment return comes later if the stock performs. When you buy a home with Zero Down that is not an investment, that is a liability.
Compare:
$250,000 with 0% down at 6.5 % for 30 years down the stupid Middle Class pays $318,000 in interest.
Previous Middle Classes would have put 25% to 35% down and paid only $79,956 in interest.
So what has happened is that previous Middle Classses saved $238,905 in interest, while two of the three current Middle Classes have thrown $238,905 in the garbage, and then they whine and cry about how poor they are and how they're being repressed by evil globalist forces. There's no conspiracy here; there's just sheer ignorance and stupidity.
How does one save money for a down payment? Here's a novel idea: stop eating out at fast food restaurants 35 times per week. Previous Middle Classes never did that, and that's why they had wealth. Stop spending $15/day at Starsucks for coffee.
The previous Middle Class would take the $238,905 in interest payments saved and put it into a savings account. At the end of 30 years, they would have saved up....
...$762,505.35
Um, gosh, look...wealth created! How about that? See? You don't have to be a rocket scientist, you just have to have a brain.
If you retire at 65 and die at 85 then $762,505 over 20 years is $38,000 per year, plus your Social Security, plus your pension, plus your 401k and any other investments you have.
What a wonderful retirement life!!! Debt free, traveling through Europe, safari in Africa, sailing the Mediterranean in a luxury yacht, dining in Thailand, hunting for pyramids and artifacts in Peru, Guyana and Guatemala.
And still money left over to leave to the children, or I guess more correctly, to the Trophy Child.
Even if the savings in interest was not put into a savings account, $238,905 rents a helluva lot of DVDs from Netflix and buys a helluva lot of XBox games and other stupid stuff that people really don't need.
I know people who are 40+ and have had a car payment every month since the year after they graduated high school or college. Previous Middle Classes weren't so stupid as to do that. Like I said, America didn't have "2 car families" until the early 1970s, and even then it was one new car and one used car.
And more than that, previous Middle Classes put 10% down on the new car and financed it for 2 years, not 0% down for 5-6 years.
And most families have what now, 4-5 cars? That's ridiculous. You don't need that many cars, and even by some magic it could be justified, you damn sure don't need 4-5 new cars with 4-5 new car payments. Used cars work fine, and they're cheaper.
And then the current Middle Classes to stupid things like buy clothes at JC Penny or Kohl's for 15% off, then put it on their credit card and pay 19.8% interest, so they take a net loss of 4.8%, then throw a temper tantrum because they don't have any money. They just threw money away, but somehow, they don't get that part.
The Middle Class has plenty of wealth, they just throw it away, down the toilet, in the garbage (literally in some cases) or give it away to people who already have lots of wealth. The biggest difference in attitudes is that previous Middle Classes were willing to make short-term sacrifices for a long term gain/benefit, while the current Middle Classes are only interested in making long-term sacrifices in order to get a short-term benefit. That's incredibly short-sighted, and there will be a lot of self-induced suffering because of that.
Quote:
Originally Posted by Lincolnian
The structure of our society has changed since the dawning of the American middle class. Lifetime employment in the same company or community is rare as is children staying in the same geographic location as their parents and extended family members.
But that has no bearing on sound personal financial practices.
Quote:
Originally Posted by Lincolnian
For many, I believe, deep down they long for a greater sense of belonging, stability, and predictability. Their fond memories/stories of the "middle-class" lifestyle of the past drives them to make consumer-based decisions in an attempt to "purchase" an idyllic lifestyle that largely no longer exists outside of more rural or geographically isolated areas of the country where income-level is less of a factor in obtaining the modest goals of the 50s "middle class."
But that life-style was built over a life-time, not 5 years. These people are trying to take short-cuts to achieve a life-style that takes 2-3 decades to reach. Other countries are no different; it takes 2-3 decades to reach that life-style as well, the difference is that people in other countries aren't trying to buy the life-style in 5 years.
I have to lot of so called middle class in American really can't afford that lifestyle. I think you need make over $100k+, even in an cheaper place like Dallas. For expensive areas, like NYC, you might need like $500k a year! Most people in middle class would should be called the "working class" instead. The middle class lifestyle has many expenses (listed below) and it can get expensive.
Here is what I think most people consider a middle class lifestyle:
-Retire with same lifestyle as pre-retirement
-1-2 years worth of spending money in cash
-Enough money to buy a nice single family house (McMansion)
-Be able afford to put kids through university
-Money to buy new cars every 3-5 years
-Afford nice vacations each year (probably $10k+)
-Money to buy latest smartphone every 2 years,computers, and other electronics
The excepted middle class lifestyle is NOT really frugal. When you look at this list, you can tell how expensive it can get. Being able to spend a lot of your money while still saving for retirement requires a high income.
A lot of people living this lifestyle on has no retirement saving and/or tons of debts. These people are really working class can't / shouldn't try to go for this lifestyle. Of course people making less than $100K (like me) can save for retirement by living more frugal lifestyle. However, you will definitely miss many middle class niceties like brand new cars every few years!
When did the definition of middle class change?
Both my parents worked, my dad a salesman and my mom a bookkeeper, for local companies and received pensions at retirement. We owned a 1200 sq ft ranch, which was plenty of room for the four of us. The annual family vacation was driving to see US landmarks. The family cars were driven over 10 years, we teens inherited them, and purchased used. We had one TV and one landline phone. We didn't know designers from Adam. We wore Converse sneakers, cheap t-shirts and Levis jeans. I graduated from a state university by taking out student loans. We were solid middle class. My parents provide a good life for our family.
Last edited by texan2yankee; 04-16-2011 at 01:19 PM..
The Middle Class has plenty of wealth, they just throw it away, down the toilet, in the garbage (literally in some cases) or give it away to people who already have lots of wealth. The biggest difference in attitudes is that previous Middle Classes were willing to make short-term sacrifices for a long term gain/benefit, while the current Middle Classes are only interested in making long-term sacrifices in order to get a short-term benefit. That's incredibly short-sighted, and there will be a lot of self-induced suffering because of that.
Will be? Hell, there already is! And of course there will continue to be, which is probably your meaning. Excellent post, of which I quoted only a snippet.
Will be? Hell, there already is! And of course there will continue to be, which is probably your meaning. Excellent post, of which I quoted only a snippet.
Why is this an excellent post? I don't understand why people criticize people who buy new cars or big houses. Is it jealousy or is there any logic to your stern words. I for one am not buying it.
Wasn't the original OP talking about how much money needs to be spent to have a middle class lifestyle. How much do you think needs to be spent?
In the hartford area in CT, middle class family needs about 90K in income to be considered middle class. If you are single I would say about 55K.
Both households would spend probably something like 55K / 35K of that money respectively. That's just my observation
In Louisville, KY a household can easily have a "comfortable" middle class lifestyle on 60-80K due to cost of living. For a single person, 35-45K would also lead to a "comfortable" middle class lifestyle as well. This is accomplished by being pretty fiscally conservative, however. No spending at all on needless items, few fast food trips at all, lower entertainment budget, etc.
The American middle class covers like 80% of the US population. Everyone and their mother thinks they are middle class.
Most people in the middle class would like to spend like the upper middle class (the Apple target audience), but have the income of the lower middle class ($45k household).
Quote:
Originally Posted by unseengundam
Here is what I think most people consider a middle class lifestyle:
-Retire with same lifestyle as pre-retirement
-1-2 years worth of spending money in cash
-Enough money to buy a nice single family house (McMansion)
-Be able afford to put kids through university
-Money to buy new cars every 3-5 years
-Afford nice vacations each year (probably $10k+)
-Money to buy latest smartphone every 2 years,computers, and other electronics
This is solid upper middle class, not middle class. This is how my doctor and lawyer friends live (you know the people who scored 99th percentile, highest out of 100 test takers, on exams since the 6th grade), and they work their asses off to get to where they are today.
The middle class hasn't crashed, what has crashed is the fallacy that you can live like a doctor as a B- student with little marketable skills and no work ethic, and that the world owes you that kind of upper middle class living standard just for being American.
I have to lot of so called middle class in American really can't afford that lifestyle. I think you need make over $100k+, even in an cheaper place like Dallas. For expensive areas, like NYC, you might need like $500k a year! Most people in middle class would should be called the "working class" instead. The middle class lifestyle has many expenses (listed below) and it can get expensive.
Here is what I think most people consider a middle class lifestyle:
-Retire with same lifestyle as pre-retirement
-1-2 years worth of spending money in cash
-Enough money to buy a nice single family house (McMansion)
-Be able afford to put kids through university
-Money to buy new cars every 3-5 years
-Afford nice vacations each year (probably $10k+)
-Money to buy latest smartphone every 2 years,computers, and other electronics
The excepted middle class lifestyle is NOT really frugal. When you look at this list, you can tell how expensive it can get. Being able to spend a lot of your money while still saving for retirement requires a high income.
A lot of people living this lifestyle on has no retirement saving and/or tons of debts. These people are really working class can't / shouldn't try to go for this lifestyle. Of course people making less than $100K (like me) can save for retirement by living more frugal lifestyle. However, you will definitely miss many middle class niceties like brand new cars every few years!
this is not a description of "middle class," imo ....
Why is this an excellent post? I don't understand why people criticize people who buy new cars or big houses. Is it jealousy or is there any logic to your stern words. I for one am not buying it.
If you go back and re-read the post which you don't like and which I termed excellent, you'll see that it was not buying new cars and big houses per se that was being criticized, but rather buying those when one can't really afford them. In other words, it was a certain mis-use of credit (of debt) that was being criticized - a mis-use of debt to over-extend oneself, to keep up with others. This was a major factor, although certainly not the only factor, in our economic meltdown of late 2007. Many families have been suffering terribly because of having taken on insane levels of debt, primarily but not limited to housing. And this suffering has no quick end in sight.
Striving for objectivity and perspective in defining middle class
We all have our individual conceptions and definitions of things, and sometimes these can become pretty skewed. According to Wikipedia, themedian household income in the U.S. in 2009 was $49,777. Of course this varies considerably from state to state, as does the cost of living. But for the country as a whole, the literal middle of the middle class is (rounding off) a household income of $50,000. I agree that this would be almost a poverty income in New York City or San Francisco (and various other places), but the figure does permit us some perspective on the matter.
How is it that we have come to expect so much more? First, I would say advertising, coupled with the natural tendency to look up towards those who have more rather than down towards those who have less. Let's take the example of other peoples' cars on the freeways; we tend to notice those nicer than the one we are driving, so the beaters become sort of invisible. In addition, we cannot know, when we look at the BMW ahead of us, if that owner took on excessive debt to get that car and is one paycheck away from not being able to make his car payment.
Another reality is that the common conception of middle class has changed rapidly with time. When I entered Kindergarten in 1950, our family of four lived in a two-bedroom, one bathroom house in the suburbs. My father was a chemist who worked for the federal government and my mother was a stay-at-home mom. We were not considered lower class.
As a nation we have become very spoiled, and the current adjustments are therefore even more painful.
Another reality is that the common conception of middle class has changed rapidly with time. When I entered Kindergarten in 1950, our family of four lived in a two-bedroom, one bathroom house in the suburbs. My father was a chemist who worked for the federal government and my mother was a stay-at-home mom. We were not considered lower class.
As a nation we have become very spoiled, and the current adjustments are therefore even more painful.
1) Thank you for making my point. 2)Who you calling spoiled? From where I sit your father was the spoiled one, he was able to swing it with only ONE income. ^^^^There's your paradigm shift! I am today, your father. I cannot afford to give my fictional household a two bedroom one bath house in the good school district, food on everybody's table and discretionary spending to the inflation-adjusted standard your father did by being a median individual income earner, like he probably was. Mommy has no choice but to toil full-time to make up the difference. If I flip off society and 'say screw it, I want 1950 too', I just moved back to the wrong side of the tracks by virtue of that choice, today. Welcome to lower middle class Mr. professional college degreed white collar worker..we've missed ya.
It's completely disingenuous to expect austerity out of these "middle class" expectations when your father's generation was afforded the layup, the cherry!, of widespread single income household living. I can't compete with dual income households today, based mainly on the principle that I don't want to subsidize my household with and by the dependence on two incomes. If everybody thought like me, no sweat, we're all good.....
But they don't. It's a race to the bottom with dual income households, which is why the middle class "definition" is worthless these days; it's dependent on two incomes! That has effectively leveraged lower income earners into an insolvent middle class lifestyle they can't really afford. What that creates is a "bump up or drown" scenario for the white collar workers that used to define the upper middle class, of HAVING to pursue dual income lifestyles themselves in order to separate themselves from the unskilled two-earner households that aspire to put their kids on the same school district. Out of THAT unintended consequence is where you get the original post of the thread that asserted 'middle class' is now defined by the lifestyle attained by those in the 100-150K/yr household income (non-NYC/SF/LA/et al metros) bracket, which is why in that regard the OP was dead on.
Put simply, the majority of white collar workers aren't going to buy off into the single income household. A top 25th percentile individual income earner is simply NOT content (in aggregate) living amongst 25th percentile households that get there by virtue of dual incomes; they are different social classes altogether in terms of cultural references, educational attainment and work peer groups, which is why it doesn't happen and people marry like minded people, socioeconomically speaking. And the other difference between me and your father is that nobody asked me if I wanted to have the non-choice of pursuing the dual income rat race just to afford a school district in the "right" part of town. It's complete lunacy, but single income households have no choice but to eat it. Your father didn't suffer that indignity. Ask single mothers all over the country. Same story: "I can't keep up with dual income households".
There's nothing inherently righteous about dual income households, frankly it has become a moral hazard to the social contract of our communities. It's become a necessity in order to afford the median lifestyle, and that's BS. Only in the ivory towers of CD do households pocket the second income. In the real world people are literally nervously waiting on wifey's check to finally come in to be able to afford the RENT (trust me there's nothing "ownership" about making a mortgage payment, but that's for another thread) at the end of the month on the good school district cul-de-sac. Middle class alright...
The requirement of dual incomes was NEVER a STAPLE of middle class membership in the generation of the previous poster's father. However, it IS today. By that virtue it invalidates the equivalency. Which means that to be truly middle class today is akin to being upper class yesterday. And nobody asked me if I wanted the downgrade, I attained the same (higher actually) educational achievements as my parents and paid the dues, my outcome is lowered and my parents scratch their heads and privately sigh at least it wasn't them going through the indignity.
So it's a two way street. We can decry that people want too much today or I can decry the previous generation didn't have to mortgage their marriage in order to put the kids through a nominal public education system. It's a hell of a slippery slope. Allow me the ability of remaining outside the working class as an above median income individual earner once I have a family, and I'll accept the re definition of a more austere middle class, as pushed forth in this thread. It's never gonna happen. One thing is true, the reset is coming and people are not gonna like it. Maybe when we're all defaulted and living in multi-familys with the grandparents (like Europe) I'll be able to put my kids in the good school district without selling my soul to satan in housing costs.
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I'm happy to answer the question.
