Sometimes, I don’t get people. No, let’s upgrade that to most of the time.
When it comes to all sorts of areas in our lives, we overrate ourselves. Most of us think we’re better drivers than average. You’d be hard pressed to find someone who would rate their bedroom skills as sub par, even though their past significant others may disagree. Just about every investor thinks they’re smarter than others, even though that can’t possibly be true. We overrate our abilities all the time.
How many co-workers do you know who think they’re the best thing at work, even though they slack off worse than a disgruntled Wal-Mart cashier? People overrate themselves at work all the time, which is why it’s generally pretty easy for someone who actually works hard to get ahead. When everyone else takes longer breaks and slacks off because they “deserve it”, they make themselves look pretty bad compared to a hard worker. That’s how simple it is to succeed at work, which is why I’ll never write (another) post about it.
Considering how delusional we are when it comes to certain other skills, is it any wonder that most of us only ever end up being middle class? Sure, we all want to end up wealthy. Who doesn’t? But, when push comes to shove, very few of us are willing to put in the work it takes to become wealthy. Most people just resign themselves to a middle class lifestyle, and try to convince themselves that’s what they always wanted.
I’m here today to tell you that a middle class lifestyle is really bad. In fact, I hate the term.
What separates the so called middle class from the working poor? Well, not much. Middle class folks generally have higher obligations, because they can afford nicer things. A middle class shmoe will drive a nicer car, but a similar percentage of his income will go towards his payments as someone who would be considered poor. The same thing applies to housing and various other expenses.
The point is, just about everybody in the middle class is just a small step ahead of the working poor. If you live paycheck to paycheck, does it really matter how big those checks are? You’re not getting ahead and you’re not on the road to becoming rich. In fact, with every passing moment, you’re chained a little tighter to your job, since you need that job to maintain your lifestyle.
This is why I know people who are willing to put in 60 hours per week even though they only get paid for 40. This is why we all know people who have their lips pretty much planted on the boss’s ass, just waiting for the next promotion to come along. A raise is their only opportunity to raise their standard of living. They spend all their time just waiting for their employer to throw them a bone.
This is the danger of being middle class. If you’re resigned to thinking like this, you’ll never get wealthy.
The similarities between the poor and middle class are striking. Both have no excess money, the poor spend every penny, while the middle class take on all sorts of debt. They both get 100% of their income from one place. They both typically have next to nothing saved for the future. Essentially, the only difference between the poor and most of the middle class is that the middle class make more money.
We often hear about how the middle class is shrinking. People lament the growing gap between the rich and poor, the very same gap that is squeezing the middle class out of existence. This isn’t such a bad thing, since most members of the middle class aren’t a whole lot better off than the poor. The only thing separating the middle class from the poor house is a higher paying job. That’s a dangerous way to go through life.
How do you get out of the middle class and join the ranks of the wealthy? We’ve talked about it a few times now. There are basically two steps: 1) Diversify your income and 2) Change your mindset.
I spend a lot of time here talking about changing your mindset, (and boob jokes) but not so much time about specific ways to increase your income. Over the next little while, that’ll change. I’ll look at specific ways you can increase your income, both by working part time and by investing. Diversifying your income will be the ticket to increased riches. Increasing your side income while maintaining your main income is the easiest way to throw off the shackles of the middle class existence. If you add investing smartly to the mix, you’re well on your way to financial independence.
Being middle class sucks. Stop aspiring to be mediocre.