Millennials Need to Move Out of the Middle Class to Be Truly Successful
There's a reason why the middle class is so big … millions work hard to get there yet don't move on to a millionaire mindset, but it doesn't have to be that way.
Over the last couple of years, we’ve been faced with the cold hard truth that middle-class status no longer necessarily equals financial independence. Our parents in that stratum could buy a home, a car, save for our school tuition and have money left over to invest, but exploding tuition, home prices, healthcare expenses, and other costs have put the squeeze on middle-income families. And while their median income may have increased somewhat over the last forty years, their ranks are shrinking: According to a 2020 report by the Pew Research Center, the number of U.S. adults in middle-income households dropped from 61% in 1971 to 51% in 2019. Additionally, most major cities where the majority of middle-class earners reside have been priced out for those earners, so more and more families are forced to buy above their means.
In short, being middle class is no longer a sufficient goal; it’s time to push past any invisible boundaries that keep us from becoming wealthy.
Alter your approach to the day job
The 9-to-5 position that paid our grandparents and parents enough money to live in a sizeable home in the suburbs is increasingly unlikely to do that now, even if it includes benefits and a pension. So, think about ways of letting it go. Begin by writing down what you are passionate about, and investigate ways of earning an income doing it. If you love writing, for example, start doing it on the side and focus free time on how to push those earnings further. Soon enough, you may notice that this “side gig” is starting to pay more than your office job, and will then be left with the happy decision of whether to leave it.
Embrace education flexibility
Learning can be truly enjoyable, especially when its focus is on a passion rather than simply being a means to an end. Our parents likely told us that in order to make more money, we needed more schooling, but the empowering reality is that there’s virtually nothing you can absorb in a classroom that you can’t by embracing a hands-on approach. If the goal is financial independence, you can teach yourself just about everything needed from books or audiobooks, through online courses, and/or simply spending free time focusing on what you love to do. Many of the world’s wealthiest people are dropouts who discovered their thunderstrike idea without a graduate degree.
The hard truth is that — to name but one profession — you can take the LSAT, become a lawyer, and possibly get the respect that comes with it, but your income will still be capped. You’ll also have mass amounts of debt, long hours of grueling work and will have to work hard to find a practice that pays enough to provide financial stability. By the time you make your first million, you’ll likely be 30 years into your new job and possibly too burnt out to enjoy it.
You can certainly become a millionaire if being an attorney is your passion, of course, but will likely need to take the right steps outside of the legal field to do so. This means investing in real estate, stocks, and having other financial assets at your fingertips.
Find ways of making passive income on assets
Most middle-class households have the small luxury of some money left over each month after bills have been paid — provided they’ve managed to find an economically priced home. The decision then often becomes whether to spend that money at a fine restaurant, perhaps, add cash to an account for a future trip, or embrace consumerism and buy more items we may or may not need. But to become wealthy, you must spend on assets that earn. This could mean investing a small amount each month, or making purchases with a credit card that pays returns, or using high-interest savings accounts instead of a traditional checking account. There is a plethora of ways in which you can maximize returns on assets, even your car (a temporary marketing banner can make up to $250 per month, which you can then invest).
Stop thinking that you’re stuck
Especially if you’ve been raised within the middle class, you may have grown up believing that your cards are dealt… that you must remain within these means. The truth is that if you’re willing to think bigger — believe you are able to provide something of value to a larger population that is unique or solves a unique problem — then the chances of seeing flourishing results is wildly amplified. Jeff Bezos created a retail giant that solved an online shopping problem we didn’t even know existed. Your idea doesn’t need to be as big as that, but it’s vital to consider the factors that are keeping you from creating and growing broader wealth.
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