Yes, the middle class is on thin melting ice … an endangered species.
35 hours of TV per week! That’s what the average American watches. 43% of Americans retire with less than 10,000.00 in savings. Connection? You decide.
As promised here is the first of two things you need to know, understand and do to move into or stay in the top 5% and avoid the slide down into the lower 43.
This lesson could also be properly entitled “borrrrrrring!” Few want to hear this one. Even fewer will take action on it. Most (43% perhaps?) will prefer to live in denial until time robs them of their choices.
Here’s the deal: We don’t all share the same understanding of the phrase “living within our means.”
The lower 43% generally believe that living within one’s means entails being able to pay their bills. It means not spending more than they have. It means not buying a product until they can make the payments. Would it surprise you to know that the vast majority of the lower 43% retiring with less than 10,000 in savings do so with a good credit report?
They’re good citizens. Many are veterans who served their country well and they’d best be loyal voting democrats because they’re going to need a lot of government support. Ironically, most of them aren’t but that’s another matter.
Soooooo … what does living within one’s means represent to the top 5%? It means NOT spending every dime. It means saving for retirement, saving for a rainy day and saving to invest. The average California millionaire household spends only 7% of their after-tax income. Of course they do! They have lots of money right? Well, the fact is they had that mindset long before they became wealthy. That mindset is the foundation of WHY they became wealthy.
We at 37th Parallel do a lot of research and put a lot of thought into these things. It’s our job and our passion. Most importantly, it’s our service to you. We believe that the average California household earning 61,000.00 per year can live frugally but comfortably on 70% of their after tax income. Research is sketchy but it appears that 70% is fairly close to what current millionaire households lived on while they were amassing their wealth.
How do you do that? It’s different for everyone. First of all, we must let go of the idea that we can’t. We can live perfectly well in smaller more affordable houses. We can live without the designer labels. We can keep the Honda a few more years rather than upgrading up to the sleek new Jaguar. We can adopt the mindset that “we can.”
About those 35 hours of TV per week: Embedded within those 35 hours are roughly 11 HOURS of Madison Avenue programming. Is it station programming or mind programming? For 11 hours a week for year after year we invite Madison Avenue into our relaxed, passive subconscious minds. Advertizing gurus create “wants” and then turn those wants into virtual addictions.
Everywhere we look some creative marketing company has posted an enticing advertisement.
Shortly after a small band of religious fanatics flew those planes into our New York towers the president got on the airwaves pronouncing that we’ve got to get the economy moving again. The advice? Shop, spend and consume! Not to go too far afield with a political rant but if shop, spend and consume are the best words of solace, inspiration and financial advice a president can offer during such trying times … well …
43% of Americans retire with less than 10,000 in savings and it is not because they didn’t make enough money. They’re the consumer equivalent of emaciated heroin addicts!
Learn to live on less than you earn and you will have taken the first crucial step into a more secure and plentiful world. Learn to live on less than you earn and you will have taken the first step to taking control of your future and living your dreams.
Take that step. Change your mindset. Change the game. Start today.
If difference number one is the “WHY” of the wealth difference, then difference number two is the “HOW”.
The 2nd major difference of two … in my next blog. rw
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{ 5 comments… read them below or add one }
Excellent analysis!
Rick, as always your articles are informative, and timely. I am weary of reading articles on investing that are more form than content, and that are lacking in real life strategy. Thank you for taking the time to write about a great topic, and doing it in a way that is straight-forward and concise. I enjoy these blogs, and look forward to reading more.
Thanks for backing up your report with numbers (even though in the future sources would be helpful). The figures may not be exact, but they do sound plausible. Also, if religion is the opium of the masses – then what is TV? And the net?
Thanks guys,
Yep, sources! My main source for information for this series has been Phoenix International Marketing. I’ve also used the Gallop Poll website quite a bit though not on this particular blog topic.
Good suggestion though. I’ll cite my sources more often in the future.
Very timely perspective and strategy. We are Realtors and it is always puzzles us to see how many people gamble their future on the volitalty of the stock market when they could be getting higher returns with less risk in the Real Estate. How long do you expect the recession to last? Do you we have hit bottom?