The
Vanishing
Middle Class
The key point of these
thresholds listed below is that propping up a precarious illusion of
consumption and status signifiers does not qualify as middle class. To qualify
as middle class (that is, what was considered middle class a generation or two
ago), the household must actually own wealth that won't vanish if the
investment bubble du jour pops, and won't be wiped out by a medical emergency.
"Families should
be focusing resources on the next generation and passing on Generational
Wealth" as opposed to "keeping up appearances" via aspirational consumption
financed with debt.
0. If a household requires government
assistance (SNAP, Medicaid, rent subsidies, etc.) to maintain the family
lifestyle, their middle class status is in doubt.
1.
Reliable vehicles for each
wage-earner that are fully covered by insurance.
2. Income/expenses that enable the
household to save at least 10% of its net income with the second goal of
attaining 25% of net income into savings and investment.
3.
The ability to service all debt and
expenses over the medium-term – [one year or more] – if one of the primary
household wage-earner loses their job.
4. Meaningful healthcare insurance (i.e.
not phantom coverage that only kicks in after thousands of dollars are paid in
cash) and life insurance of significant value to protect the loss of a spouse’s
income.
5. Continual accumulation of human and
social capital (adding new skills, expanding social networks and markets for
one's services, etc.)
6.
Significant equity (50%+) in a home
or other real estate.
7.
Significant retirement funds: 401Ks,
IRAs, etc.
8.
Ability to invest in offspring
(education, extracurricular clubs/training, etc.).
9.
Leisure time devoted to the
maintenance of physical/spiritual/mental fitness.
10. Family ownership of income-producing assets such as rental properties,
bonds, income producing stocks along with non-financial assets such as precious
metals, business equity, raw land, i.e. generational wealth.
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