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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 list SCREAMS irresponsible. It is hardly middle class ... it's upper middle class to wealthy.
Only self-righteous and entitled-feeling Boomers can consider this list "middle class." Who can blame them? They grew up with everything, got spoiled, and then had the nerve to have the same lifestyle built on credit, NOT saving.
The last generation I consider to have had a truly middle class lifestyle were the war generation. Here's their lifestyle:
- Retire in a smaller place or the same house they lived in for 30+ years
- 20-30 years of savings ready for retirement
- Enough money to put 4-6 kids in a house that is something like 1200 sq. ft., maybe a little bigger
- Be able to afford to give kids some spending money or book money or food money while in college, but expect them to pay their own way or take out loans
- Money to buy a NICE car once, and own it for 8 years
- Ability to afford a nice vacation once every 5 years
- Ability to avoid getting the "latest and greatest" toys, and get what you need, not what you want.
Compare that to your list. It's a wonder how so many boomers deplore the American lifestyle ... they can't afford it! I have nothing but scorn for such people who think they can get away with such debt-ridden lifestyles.
How is the OP's idea "middle class"? That is at least upper middle class at least, or middle class "Keeping Up With the Joneses" through debt financing.
$10,000 vacations on a regular basis? What kind of vacations are we talking about here?
As for that $10K vacation figure, I came up with from my vacation with my parents. Few years back we took a 2 weeks trip to Australia that cost $12K! It easy to reach with $6-7k for airplane tickets for 4 of us. Then another $150 for hotels for 13 nights ($2-3K). Finally another $2-3K in food, shopping, etc. Unfortunately, that such an expensive vacation which can't be repeated. Going to Europe would also cost that much of money, I see round trip flights to London cost $1,500 or so!
BTW, I have seen other people at work take such vacation. One guy WAS planning a $10-15K vacation to Asia. Another man takes 3-4 vacations to places like South America, Africa, and Russia each year (at least $10K+).
I think some of your middleclass desires are a little aggressive. Those include the 3-yr car upgrade and $10k vacations.
Even general wealthy people on average, keep their car for 3 years. many keep them fo 5 years. Sure, they buy a different level of car. But 3 years is agressive, IMO. My 2 year old car still feels new to me.
I have seen people at trade in cars in less than 3 years. This one guy bought a new Nissan and then 1 year later bought a big pick-up. Then finally when gas prices went up he went back to another new sedan. Now he is planning on buying a hybrid or new Chevy Volt!
FYI, I would say upper middle would be buying up new Luxury cars (BMW, Lexus, etc) every 3-5 years.
Upper Class / Rich - Would be buying Rolls-Royce, Lamborghini, etc.
Those are not middle-class vacations. Middle-class families like the I grew up in may be able to swing ONE vacation like that in a lifetime, but even then they'd be extremely fortunate to have such an experience.
A previous poster nailed it: the OP sounds like a spoiled child. What he has described is an upper-middle class lifestyle.
Where would you put an early 40-something with a current $150k annual salary, a paid-off house, and $1.2 million in the bank, rising nicely with every quarterly statement? Fairly well-off, right?
Wanna know how many cell phones my family of four owns? None. (My spouse's phone is provided by his employer.) Wanna know how many $10k vacations we've taken? None. Wanna know how many McMansions we own? None. (Our house is a very average 1600 sq. ft. 3/2 built in 1978.) Wanna know how many cars we own? One, and it's a TWELVE-year-old Honda.
Wanna know how we got where we are? We were realistic about how far our middle-class income would really go and set priorities that did not include spending our money on unecessary crap.
If you want to move from middle-class to poor, just keep on thinking you should spend money on things you don't need with money you don't have to impress people who don't matter.
To the outside world you look like a poor working class man! Of course with that Net-worth you are Upper middle class but people can't tell unless you show them your investments!
For world to you know you are Upper Middle class you need to SHOW them. You need wear expensive Polo clothes, drive a BMW, and have a $1 million+ house/condo.
The POINT of this post is that so called middle-class lifestyle isn't affordable at all. Only way to get your point is to be frugal, just like YOU were. If you spent it all to show up that nice middle class lifestyle you will end up broke with no retirement.
The culture in the US is to spend and how of your stuff to others. Most people don't like cheap or frugal person. For example, try using a coupon on date with some girls today and you still probably get rude remark! What people want to see is the glamorous lifestyle with list I posted. I don't think you will changing that culture any time soon!
$30k on Disney World? How'd ya do that? I'm very curious...
I'm looking at Disneyland this fall, and figuring $5k.
FYI, I did a 2 week trip to Florida this winter that included Universal Studios and Disneyland for only $1,800. I am personally quite proud my very frugal Florida vacation!
To the outside world you look like a poor working class man! Of course with that Net-worth you are Upper middle class but people can't tell unless you show them your investments!
For world to you know you are Upper Middle class you need to SHOW them. You need wear expensive Polo clothes, drive a BMW, and have a $1 million+ house/condo.
The POINT of this post is that so called middle-class lifestyle isn't affordable at all. Only way to get your point is to be frugal, just like YOU were. If you spent it all to show up that nice middle class lifestyle you will end up broke with no retirement.
The culture in the US is to spend and how of your stuff to others. Most people don't like cheap or frugal person. For example, try using a coupon on date with some girls today and you still probably get rude remark! What people want to see is the glamorous lifestyle with list I posted. I don't think you will changing that culture any time soon!
It sounds like you are getting your ideas from television or glamour magazines. Middle Class is not synonymous with a "glamorous" lifestyle.
I think sans the 10K vacations, he shacked it dead center. And that is the point. The self-identified middle classers are not middle class ANYMORE, they're working class. Their parents USED to be middle class. They're working class now. One quarter's worth of paychecks away from the WIC and food stamp line and the payday loans.
How does the "middle class" compensate for this deficit? Credit and no savings. It's the way it has been for the last 20 years at least. And it will create a bad little situation for the Gen X/Y as they reach their 50s. Insolvent won't begin to describe this gaggle. And in that respect, they are "middle class" in thinking. The thought process of insisting on retaining the living standard of their parents while economically no longer able to do so (outside credit and no savings) could very well be a bona fide NEW definition to the moniker "middle class" in this country. Working class KNOWS they're poor, the middle class simply refuses to acknowledge their working stiff condition. Dual income household is a funny little joke the "free market" played on the "middle" class, all they did was dilute their labor value down to working stiff who can afford the chicken OR lasagna, but never both without sweating the mortgage.
Increasingly, there will only come to be the people who to varying degrees (250K+ crowd to the passive income kings and dukes that truly run this land) don't have to worry about cost of living...and then the rest of us snarling at each other on the bottom floor for varying degrees of dispossession. Welcome to Brazil. Ain't globalization and a sense of entitlement great for a civilization?
YEP!
Quote: Originally Posted by Mircea
Also the wages aren't there and if you compare that with inflation it just doesn't work.
In 1980, I had an entry level job as a sound engineer with a local independent TV station earning $5.00 per hour. One paycheck paid my rent and utilities and auto insurance and the other 3 paychecks each month were disposable income.(CK78 comment:LOL/we are getting boned))
An entry level job today pays $8.50 to $10 per hour and even at $10 per hour it takes 2 paychecks to cover the cost of rent, utilities and auto insurance (CK78:more in philly area) (and don't forget in 1980 $10 -- or two hours of work -- paid for 2 tickets to the cinema show, a tank full of gasoline and something to eat after the movie -- the cost of two movie tickets now is over $20).
You're right on!!!
GuyNTexas says IT ALL Here!!!!
Originally Posted by GuyNTexas No. I'm really disagreeing with .. not missing your point. And those numbers don't tell a very accurate story, and the proof is demonstrated by the drop in net worth of middle income earners as their debt has increased significantly, while earnings have declined relative to inflation.
By most measurable data points, the middle income class has been dying a very slow, incremental death for 4 decades because the costs on high ticket items have increased more rapidly than the either the inflation rate or rates of increases in income. To further compound the problem, average income levels have failed to keep pace with the inflation rate itself. Much of this goes unnoticed because of it's slow incremental nature (like growing old). But if you are old enough, and still maintain your mental faculties, you can't be bull $hted into believing what you are trying to say here.
As just one example, in 1977, I bought a brand new Pontiac Trans Am for $5200. And since it was my first car purchase, I suspect I was clubbed like a baby seal (paid full MSRP), as I simply asked how much, and said OK (later I learned the error of this way to purchase automobiles )
Now today, that car is no longer available, but a comparable car "Chevy Camero SS" is. And a similarly configured model is around $35,000 MSRP. Which is almost double the adjusted for inflation number of $18,700 that Camero should cost relative to the $5200 Trans Am of 1977.
My income back then was 14,000 or just shy of 3 times what the car cost ... if you apply that same formula to the $35,000 Camero today, I'd have to earn roughly $100,000 per year to maintain the same standard (drive the same car) as my $14,000 income provided then. I was not wealthy then .. I was a 20 year old working in a warehouse driving a forklift. And I don't think there are many 6 figure forklift drivers around today ... I would say, the 40-50K range would be the upper limit ... or roughly the same as my $14,000 would be, adjusted for inflation.
This is one example, and almost any big item ... car, house, etc. works out to be the same. Some other items like Healthcare have dramatically exceeded those rates exponentially compared to 1977 where mine was absolutely free and first rate, including dental.
Now, add to this the higher taxes, social security withholding, and medicare ... all of which have exceeded the inflation rate (and don't let anyone BS you into believing it hasn't), means that the net spending power of your income has declined dramatically over the past 30+ years.
Now around about that same time frame, my step father worked for one of the US Government agencies earning roughly in the 50-60K range, and at the time, that was very good money, but not even close to RICH & Wealthy .... but adjusted for inflation, that comes out to around $200+K now. The house he purchased then at $50,000 appraised for $480,000 in 2004-5 even though the adjusted for inflation value would have only dictated a $155,000 figure ... 3 times the inflation rate!! By the time he retired in the late 90's, his income may have doubled, yet his house increased by 6-8 fold. What does that tell you?
Now if you are following me here ... this is where it gets real hairy ... if you take a Quarter ... 25 cents ... from say 1964 (the last 90% silver Quarter) that 25 cents equates to $1.76 in 2010 value. But guess what? Today's melt value of that sliver quarter is about $3.70 which is again more than double the published inflation rate ....
So what does that all mean? It means very simply, that the value of your money is worth about half of what it's claimed to be worth, even after being adjusted for inflation .... and all it takes is to actually look at the historical costs of items like cars, and houses and health care costs from the late 60's to today, and also the median incomes. You see that the purchasing power has indeed declined. And this is a result of the devaluation of the currency (a hidden tax).
So when it comes to buying power, there has been a continuous decline that doubles the the inflation rates admitted .. which is why the middle class really doesn't exist for all practical purposes today.
There are the ultra wealthy, and the rest. The $250kers are just at the higher end of that rest of us, and they are the last of the upper middle class, and the next in line to fall ... apparently, much to delight of many who think that they are members of the Wealthy Club, and must fall for the sake of everyone.
I suppose this proves that indeed, misery loves company.
To the outside world you look like a poor working class man! Of course with that Net-worth you are Upper middle class but people can't tell unless you show them your investments!
For world to you know you are Upper Middle class you need to SHOW them. You need wear expensive Polo clothes, drive a BMW, and have a $1 million+ house/condo.
The POINT of this post is that so called middle-class lifestyle isn't affordable at all. Only way to get your point is to be frugal, just like YOU were. If you spent it all to show up that nice middle class lifestyle you will end up broke with no retirement.
The culture in the US is to spend and how of your stuff to others. Most people don't like cheap or frugal person. For example, try using a coupon on date with some girls today and you still probably get rude remark! What people want to see is the glamorous lifestyle with list I posted. I don't think you will changing that culture any time soon!
Indeed. My divorce was primarily caused by my ex-wife's discontent with my frugal lifestyle. Said discontent was not verbalized until after the wedding. It appears her expectation was that my attitudes towards money would change as a function of marital status; apparently I didn't get the memo I was supposed to start spending to that "middle class" standard once we became husband and wife..after all, we "went to college" and "don't have money problems", she remarked as she left.... Nice.
I consider my exwife representative of the majority, whereas I consider myself a statistical outlier in terms of economic attitudes. So yeah, it's not looking good for this country....
Wow, the OP has a really distorted view of what constitutes "middle class lifestyle" and what money can actually buy. The examples, with a seemingly random number generator of incomes to be able to afford it (instead of math), seem to round up everything they wish to have then applies every bad behavior to it that might stick.
I would love to find some one who could have 0 savings and tons of debt, then have 1-2 years saved living expenses in cash and savings to retire in the same lifestyle they have now. Add into that the down payment required to purchase cars and houses, at least the first one to build equity. Go logic, for some people it is a struggle.
What it really shows is that a number of people would benefit from a basic accounting and logical reasoning course.
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LOL/we are getting boned)) 
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