“Ironically, historically low unemployment rates went hand-in-hand with rising inequality in an America where hard work no longer means economic success. Success includes harder work, less family time, and probably more stress. The average middle-income, two-parent family now works the equivalent of 16 more weeks than it did in 1979 due to longer hours, second jobs and working spouses.” (Thomas M. Shapiro)
We created this blog to give a platform/home/community to many middle class folks who are not only frustrated by the status quo, but passionately desire solutions. What do we mean?
If you are in the middle class, there are very few options for real upward mobility but downward mobility is readily achievable without trying. Downward mobility could result from salaries/wages not rising or lagging inflation, the loss of a high paying job only replaceable by a lower paying or minimum wage job, sudden death of a spouse or divorce, sudden or unexpected short- or long-term disability.
So, this blog is going to highlight many of the challenges the middle class faces as well as offer turnkey solutions to these problems. Because the writers are middle class folks, you are not going to be seeing many of the DIY (do-it-yourself) solutions that are common out there such as flipping properties (where you evaluate 100 properties, inspect or walk through 10 in order to find 1 profitable deal) or attending a free seminar (at which you get upsold to attend subsequent paid seminars) on one money making topic or the other. This is not to say that these methods do not or cannot work – we just know from personal experience that they are neither practical nor pragmatic for the typical middle class folk (in many families, both parents are working and juggling daycare and/or preschool and/or regular school drop-offs and pick-ups with extra curricular activities for the kids – piano, swimming, ballet, soccer, hockey, football, after-school tutoring, – and laundry, cooking etc). DIY investment in publicly traded securities (stocks, bonds, exchange traded funds – ETFs, etc) is another option that is proffered – this would work for some, but again, due to resource (time, financial etc) constraints, it is not pragmatic and at best inefficient for most middle class folks.
We believe that it should be possible for the middle class folks to put their money to work on their behalf on terms similar to those available to rich and wealthy folks – a critical step in wealth accumulation.
We also believe that many in the middle class have been misled to think that savings and investments should only be done with retirement in mind – meanwhile, the only vehicles widely available and used to achieve retirement goals for many is their principal residence (by paying the mortgage off), mutual funds and publicly traded stocks. For most people, these vehicles have proved to be unreliable, unpredictable and sub-optimal. Hence the frustration.
By the way, the existence of real upward mobility, suggests that there is fake upward mobility (please don’t get sucked into the latter).
Real upward mobility (in our opinion) would result in or from:
- Sustainable increased periodic (weekly, biweekly, monthly, annual etc) cash flow. A salary increase may qualify but its sustainability is likely subject to circumstances beyond the employee’s control
- Additional income streams that diversify away from sole reliance on a salary for example
- Increased control over what you earn and how much you get to keep. Regular earned income of the salary (most self-employment and professional – lawyer, dentist, doctor- income streams fall under this category) type leaves the earner with few options in terms of what you get to keep – tax policy changes for example or employer policies can dictate your quality of life. If your income is constant but your employer transfers you to another city with a higher cost of living, the quality of life drops
- Reduced vulnerability to the loss of a sole income source (usually salary or wages). Put in another way, this could mean reduced dependence on a sole income source
- Relatively increasing peace of mind in spite of whatever may happen in the economy due to an increase in choices, options and tools available to deal with a setback
Fake upward mobility on the other hand would result in or from:
- The acquisition of newer and/or better and/or more expensive items of consumption. These would include cars, principal residences (buying a four unit i.e. 4-plex building with 2 or 3 units fully rented and the owner’s carrying cost reduced/eliminated does not fall into this category even if the new building is more expensive than the older one), electronic gadgets, vacations, cottages and vacation time shares. If any of these is somehow rented or used to generate sufficient income to offset the carrying cost materially, then such should be excluded from this category
- Moving to a classy neighbourhood, and/or enrollment of one’s kids in an expensive private school and/or membership in an expensive country or golf club etc.
- Taking on significant debt (only in order to keep up appearances) over and above what would be considered reasonable and flexible – in other words, fiscal recklessness
- Increased vulnerability to the loss of a sole income stream (usually a salary or similar income type)
- Relatively decreasing peace of mind due to circumstances beyond control that may pull the plug on the ‘appearances’ being kept by expensive homes, cars, clubs, private schools and gadgets