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2018-12-13

Why Does Middle Class Work Income Just About Equal Middle Class Expenses?

By author Morgan Jassen

First published on 2018-12-13 at https://i̶n̶v̶e̶s̶t̶o̶r̶w̶o̶r̶k̶e̶r̶.̶c̶o̶m̶/2018/2018-12-13-middle-class-income-expenses.txt

Why does middle class work income just about equal middle class expenses? On average why does the income just about equal the expenses?

Coming from this mindset, it is something that personally has kept haunting me, and has kept me up at night.

The idea of average income equaling average expenses is so ingrained in our United States middle-class culture that it can feel like there is hardly any room to do differently. Tax laws are set up rigidly to tax an individual's primary residence in a unique way. Tax laws are also set up rigidly to tax an individual's salary income in a unique way. Average insurance costs, such as automobile and medical, are expensive but just within a threshold a certain amount that, on average, people can afford.

Is part of the answer that it is baked into -- intertwined with -- the middle class cultural mindset, and into our tax laws, and our real estate laws, and so permeating our government and culture?

Instead of maintaining the mindset that it's ok for income to equal expenses, instead how can everyone, myself included, look for a solution to become more financially strong?
 
Moving on. 

Where to go from here; what to do about it?

Is part of the answer to change our mindset and actions? After all, my mindset and actions are within my influence. 

I take inspiration from some books. In "Rich Dad"¹ (book), Author Kiyosaki spells out guidelines of how to get out of the (Kiyosaki's so-called) "Rat Race". The books speak of gaining multiple sources of income including investment income. The books speak of buying investments. The books speak of leveraging a corporation or leveraging corporations. "Rich Woman"² (book) by Kim Kiyosaki et. al., and "Start Your Own Corporation"³ (book) by Garrett Sutton et. al. also point this way and give guidance along these lines. 

If I aim for a financial goal of letting my *passive* income just about equal my expenses, a.k.a. so-called "Financial Independence.", then will that be more noble, and allow me to sleep better at night?

Books like these highlight the fact that there are other forms of income (besdes work income that is) -- i.e. investing income, for example from ownership of corporations -- and that these aren't as closely-tied into the average income and average expenses. Furthermore highlighted is that one person can have both types of income. Multiple types. One can *both* work to earn income *and* harness investment income *at the same time*.

At this point a vision pops in to my head where everyone, myself included, labors for work income, but at the same time, they (and I) additionally, at the same time, own a part of a company that also flows additional income -- for example in the form of a quarterly dividend check.

A good vision, right?

Now I have been sparked with awareness of what "financial independence" is, and how to move towards it. However, I still have to figure out how do do it, and then I still have to actually go and do it.

And so do a lot of people I've met. 

How can I, and anyone, have an abundant income -- not excessive, just abundant -- so that one's income comfortably covers one's expenses?

Are habits (repeated thoughts and actions) of self-discipline, focus, and ambition, enough to get out of The "Rat Race"? If we maintain and tune into ambition -- in the good sense of the word -- the type of ambition that inspires you and me, and lifts us up -- then how far will it get us towards these goals?

One weak area seems to be a gap between working class and wealthy class. How about bridging such a gap, and, how *to* bridge such a gap? If we, and I, work to spread the word that anyone can both work and invest, not either-or, then what can happen?

A main point of this blog post was to ask-- Why does middle class work income just about equal middle class expenses? It does-- but, ...Why? Also to ask why this is a problem, and maybe start to provide an answer.

An immediate answer may be that the income equals expenses because that's the mindset of the middle class persona and also tax laws and financial management customs reinforce it. One strong solution might be to strive for financial independence through investing and corporation ownership, so you and I can grow and maintain an ethical wealth.


¹ Rich Dad, Poor Dad : Kiyosaki, Robert T. [ https://bpl.bibliocommons.com/item/show/656002075_rich_dad,_poor_dad ]
² Rich Woman: A Book on Investing for Women - Because I Hate Being Told What to Do!; by Kim Kiyosaki; Rich Publishing, LLC, 2006. ISBN-13: 9781933914008
³ Start your Own Corporation : Sutton, Garrett [ https://bpl.bibliocommons.com/item/show/3265606075_start_your_own_corporation ]