Pew Research has released a long report on the state of the American middle class, and the punch-line isn’t very good (there’s a short summary too, though you might, as I do, find the numbers in the long version interesting).
The American middle class is losing ground as judged by income levels as compared to the past. Most income growth is going to the wealthy. Those who aren’t wealthy are falling behind.
I believe in The Elephant’s Paycheck because it’s focused on income, not on net worth. It’s hard to figure out how to translate net worth into quality of life at a day-to-day level (at least, I find it so).
With income, it’s different.
I can plan to an income level and create a quality of life that’s in line with my income (without sacrificing my net worth by living beyond my means). I find it much harder to design my quality of life to my net worth.
I don’t feel so wealthy
I look at the numbers in reports like this, and I struggle to internalize them. Living in NYC is expensive. With two people working “white collar” jobs at big companies, we’re obviously in the “upper range”. Being in the upper range really doesn’t say anything though about our day-to-day quality of life. Simple things, like taking a family vacation or splurging on some holiday gifts have to be carefully considered. Even though they’re the kinds of things you’d think would be “easy” when one has “made it” to the upper income range.
My personal situation of course is not the point. The point is that I’d like you to be in a position where you can grow your income streams (and your income) by creating an “investing business”. This “business” not only gets you a paycheck, it’s a paycheck that grows all the time — with each reinvestment, with each dividend increase, and with each extra few dollars that you stash away.
Even though I don’t feel wealthy, I don’t have the same stress that I used to when it comes to financial security. I can relax a little because I have a minimum income from my investments that covers a lot of my basic needs. Looked at another way, my vacation and holiday gifts are fully paid for even before I wake up for work in the morning (regardless of how the market happens to be doing at any given moment in time).
Just this week, I got two dividend payments. Since they were reinvested, I got two raises. It’s just cool.
I want you to be cool.
I want you to have less financial stress.
I want you to have fun AND build wealth for your future.
I want you to buy my book.
Seriously though, I want you to have a better life. Like it or not, a better life often includes having a little more income to get by.
This is probably one of my last posts for the year, as I’m on a family vacation leading up into Christmas. Thank you for making 2015 a success for The Elephant in the Room has a Paycheck.
I wish you all the best for 2016 and hope you get to enjoy your families during the holiday break.