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Am I Really In The Working Class? Ruminating On The Middle And Other Social Classes

September 12th, 2011

I Just Re-categorized Myself Out of the Middle Class!

I’ve come to this conclusion because after thinking I understand what middle class is, and what it takes to be a member of it, lately I’ve changed my mind because now I’m not so sure. Typically, my mind changes when I’m doing something mundane like mowing the lawn. I’m behind the mower and WHAM, I think “Hey, I’m not really middle class, instead I’m more within the working class, and here’s why…“. My mind is evil that way, continuously raining on my parade!

To backup my new reclassification, I reference Felix Dennis, who believes that I’m not even comfortable poor! Under his definition, you need 2 to 4 million to be within the range of comfortably poor, thus meaning that I’m “uncomfortably poor“. The more I think about it, the more his argument makes sense to me!

Why I May Not Belong To The Middle Class

History! Since we are a newer country than most, we have to look at Europe and England in particular for a more true definition of what being in the Middle Class means. According to them, the middle class of yesteryear were rich merchants but not in the nobility class. Some of the merchants of the middle Class were even richer than the aristocrats. You see, to them (England in particular) the middle class isn’t the same as middle wage earners. So in their society, the new rich are more in the middle class than the nobility that fell upon hard times. Since I’m not rich, perhaps I’m not in this group! I’m sure if I lived in England, I wouldn’t be considered Middle Class.
I must work for money or else my family goes hungry. Since I have to work, doesn’t that naturally put me in the “Working Class“?
I don’t have one million dollars in net worth yet! So if I were forced to live on all my assets invested in stocks or/and bonds, I would be below the poverty level for a family of four.
I don’t have any power in my community. In my town, when I talk, nobody listens or at least goes out of their way to do so. Now if I had money to support local community goals, then people would listen, or if I created special events that benefit my local community, then people would listen.

Perhaps I Am in the Middle Class?

I have a college education, and advanced training
My net worth is much higher than average for even the middle class category. This is from years of being frugal and investing.
I usually go on a nice vacation (at least one or two a year).
My kids are in sport and will probably go to college without paying anything or taking out a loan.
I’m in a continual state of learning.
I have power within my small social groups, where my ideas are listened to and sometimes acted out. This is true among my friends and work peers.
I look middle class…

Or Am I Upper Middle Class… (not)?

Nope, I’m not even close to being in the category! Actually, I use to fancy myself being on the line between middle and upper middle classes. However, if examined my salary, I’m close to making an Upper Middle Class salary (according to some measures anyway). As for education, I only have a bachelors degree, but as I mentioned before, I’m in a continual state of learning.

I’m a home owner and I’m totally debt free. My kids have some of the finer things (my son recently got a ipod touch and soon will get a cell phone). We go on nice trips for vacations and mini-vacations.

Even with all of the points above, I know that I fall short in this group, so I won’t waste anymore time thinking about it, perhaps in future. Check out my financial pyramid for the way I define my progress…

So in the end, I guess it’s how I look at what I do and what I am. One could argue that I’m a member of all of the social classes: Working Class, Middle Class and possible the Upper Middle Class (again this is stretching it).

For more great reading material on this subject, check out Roshawn’s brilliantly written article called “The Impossible Question: Just Who Is The Middle Class?” about why it’s so hard to determine who is in the middle class and not!

Thanks for ruminating with me!

MR

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Posted in Social Class

Tags: am I middle class am I working class class in england middle class upper middle class working class

Memories of Poor Friends In My Distant Past

June 17th, 2011

Coal

When I was a young kid, I remember being at my neighbor’s house and experiencing a lifestyle that was very different from where I lived. I didn’t realize that they were poor at the time though. I’m going to describe the setting and lifestyle of this charming couple from my memories.

One of the most vivid things that I remember wad that their heating system was a coal furnace in the basement (which had a dirt floor). It was kind of hard to breath in the house, it has a distinct smell that I will never quite forget. One time, I remember riding in a pickup truck to pick up some coal. The coal was literally poured into the back of the truck through a metallic chute of some sort, or so I believe.

Next my neighbor drove the coal home and we feed the coal through another chute that open down to his basement. He had a pile of coal in his basement in some kind of large bin. I helped shovel for a little bit, but I was so young that I didn’t last long… so I went home.

Another thing I remember is Jesus paintings and pictures and bible quotes throughout the house. This family was minimalist before the term became popular… although not by choice. I remember a couple of mini-statues of Jesus throughout the house too, along with other religious symbols.

The other things that I remember in the house was a very small TV, a second hand small couch and a non-matching chair, a beat up dinette set (used of course), and a bed that was small and appeared lumpy. In their 2 bedroom house, they had a small lumpy bed in the guest/storage/sewing all-in-one room. The other bedroom was the one that they slept in. I never went into that room. The total size of their house was less than 1/2 the size of my current house.

So what did they do for entertainment?

Mostly free stuff, they had a garden where they grew their own food and they also socialized with family and friends. I remember that church was a very important function in their life. The wife went two or three times a week, mostly riding with other women since I don’t believe she had a car. The husband mainly watched TV while chewing tobacco. Most (if not all) of their cloths were either made by the wife or bought second-hand.

You might think that they were miserable, but actually they seems fairly happy, especially the wife. I only live in that neighborhood for a few years, so I’m not sure how they did as they aged. I think not having money in your later years would mean it would be hard to get decent health care. So their retirement might have been rough.

At the time I didn’t realize how hard they had it financially, but as an adult, I now realize that they were quite poor. The husband had injured his back and was on some form of disability, while the wife didn’t work. They had a frugal lifestyle so they were able to get by though.

They weren’t rich or even middle class, but they were charming in their own way.

Being wealthy doesn’t make you a better person, but it does make life easier.

MR

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Posted in Social Class

Tags: being poor being poor in america being poor in the US lifestyle of the poor lower class lower financial class poor class poor lifestyle poor people working class

Billionaires Should Spend Their Money!

September 7th, 2010

I noticed an article on yahoo today called 7 Spending Tips From Frugal Billionaires in which the article goes on to talk about how many Billionaires are frugal too. The article was a good one with a good message, which basically states that if billionaire are frugal shouldn’t we non-billionaires be frugal too?

I’m not disputing the message of the article, but I think Billionaires should spend their money instead of being frugal and hording their cash like a Scrooge!

IMO, when Billionaires act frugal and keep their money tight, that keeps the money from the hands of the middle class people! This means the money supply is constricted, and then not as many people purchase goods which in turn slows down the economy.

Now you might think that when Billionaires spend money, they buy expensive things like yachts, personal jets and other such luxuries. And this is true, but even when Billionaires spend money on luxury good, that money pays workers that build or create those luxury goods. Then those workers spend money on ordinary goods, and once again money flows freely again.

So, while I believe in being frugal, I don’t think it’s such a great idea for a billionaire (or high-end millionaires) to do so. These extremely rich folks should enjoy life a bit more instead of being so frugal.

Recently, Warren Buffett and Bill Gates went around and convinced over 40 Billionaires (and near Billionaires) to give over half of their money to charity. While that’s an admirable goal, I think some of the money would have been better served helping the economy by them spending some of it. Don’t get me wrong, I think it’s great that these billionaires are giving their money away to charity!!! But, I know that during the recession, I actually spend more of my money, and I’m not a millionaire…, yet. Of course, I didn’t go into debt when I was spending more money during the recession.

An outstanding example of a frugal billionaire hurting their local economy would be the richest man in the world, Carlos Slim. Carlos Slim is a mexican, and very frugal. But if he were to buy more things from mexican business, wouldn’t that help the mexican economy? I know that mexico has complex and not easily solved business issues, but every little bit counts…

What do you think of frugal Billionaires hording their money?

MR

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Posted in Social Class

Tags: Billionaires Spend Cheap Billionaires Frugal Billionaires

A Frugal Middle Class Assessment

March 26th, 2010

I was in twitter when I noticed that SeeJaneGetRich.com tweeted a link to a U.S. News article on yahoo called “How to gauge your middle class status“. Since I love feedback and statistics, I thought I’d check it out.

It was interesting read so I decided I’d write about how I was doing.

Income: We are very close to the midde-middle income level for a 2 parent, 4 person household. We are a bit above that $81,000 dollar number, but still less than $100,000.

Housing: Our house is assessed at $200,000, but it’s only 2,100 square feet. It’s good size for my family though.

Medical Expenses: First, we are doing a HSA, so it’s kind of like it’s still our money. But we are much lower than the $5,100… We are more like $500…

Cars: We have 2 cars, both were bought new, but only cost about $30,000. That period in time may be the last time we buy new cars. Our expenses around them are less than average, because I telecommute a few times a week and car pool with a buddy occasionally.

College Savings: This is one area that I am very average. My savings rate is around $4,000 a year. To date, I have a total of $65,000 saved for my kid’s college expenses in a 529 plan.

Vacations: We’re pretty typical here too! Although we usually only spend about 75% of the $3,000 amount the average middle class American spends.

Retirement: I save about 15 to 20% of my gross income in this area. I got hit hard during the recession, but it’s coming back nicely!

Everyday Spending: This is one area we use to really win at (being frugal and all), but kid’s sports, and other needs has had this number slowly rise over the last 5 or so years. We have been going thru a bit of a lifestyle creep for our kids. But at least our kids are happy… Our cost are still far less than the average though!

Number of Earners: For the past 9 years, it’s been primarily me, but since my daughter started kindergarten, my wife now works a side job for about 6 to 8 hours per week. She works mainly to keep her skills fresh. Since it’s not critical, the job she works has a high degree of flexibility.

Hours Worked: With my wife working now, we still work less that 50 hrs a week, but definitely more than 40.

Education: Both my wife and I have college bachelor degrees. I play around with the idea of going back for an MBA, but so far, I’m too busy.

Free Time: We are fortunate that we have an adequate amount of free, but busy time, no big complaints here.

Household Net Worth: I don’t think this number is for the average 4 person middle class family… When compared to a similar socio-economical family like ours, we are higher than average. Hopefully in the near future our spread will continue to expand, since we are totally debt free (no house mortgage).

Debt: I have no debt (credit card, auto or mortgage) at this point in my life. I’m actually surprised that the payments towards debt is only 18% of the disposable income! I was thinking the percentage would at least be over 20%.

Well, they you have it! My assessment for how I’m going verse the average middle class American! Overall, I’m very happy with our progress. In fact, I believe we are going better in every area above, at least in a positive sense (for example, our hours worked isn’t over 70 per week, and I view that as very positive).

How are you doing, do you have any weak spots with your financial armor? Are you developing a plan to rectify any deficiencies? Reading personal finance blogs helps, on my home page, check out my Yakezie links in the sidebar to the right, it’s under “Best of MR”, I’m sure you’ll find someone that was in the same situation you may currently be in.

Enjoy the weekend!

-MR

15 comments »

Posted in lifestyle, Social Class

Tags: middle class middle class 2010 middle class assessment middle class benchmark middle class checkup middle class lifestyle middle class milestones

How I Have Lost Over Half A Million Dollars Having Kids, So Far!

December 15th, 2009

Since my son has been born, We have lost over half a million dollars in income!

How?

My wife stopped working to be a stay-at-home mom, the day my son was born.

In her previous work life (before my son was born), my wife was an accountant. Below is her calculated income based off of the last salary she received before becoming a stay-at-home mom.

	Wages and
Year	Bonuses
2000	40,000
2001	42,000
2002	44,100
2003	46,305
2004	48,620
2005	51,051
2006	53,604
2007	56,284
2008	59,098
2009	62,053
	$503,115.70

I added a 5% standard of living increases for every year after the first year. I really think she would have made more that the amounts that I have here, but this gets my point across.

We never projected out our future income loss, but as you can see it’s quite substancial (Augh). With my wife’s former income steam, we could have be living an “Upper Middle” class lifestyle by now. Vacationing in Paris for Christmas, owning new low-end luxury cars and maybe even a vacation home in the South… we could have been really living it up

So, the question is, would we change anything if we had it to do over again? Hmmm maybe! (initially I was going to say no, but half a million dollars is a lot of money). I think given the choice, I’d at least ask her to continue to work part-time.

Why would I ask that of her?

Half a million dollars is a lot of money!
It would be nice to have a little bit of security, in case I were to get laid off
Half a million dollars is a lot of money!!
The kids would learn that everybody has to go to work to earn a living
Half a million dollars is a lot of money!!!
We would be able to increase our lifestyle, at least alittle bit.
Half a million dollars is a lot of money!!!!
The extra money could be a huge emergency saving fund
Half a million dollars is a lot of money…, really!!!!!!
The extra money could have been used to fully seed the kids College funds. (I’m fighting the savings battle with it right now).

All told though, I really do like the fact that the kids have a mom that is there for them anytime… but, half a million dollars is a lot of money!!!!!

What would you do? Live better and larger (at least a little), or forgo the money and be a stay-at-home mom?