The majority of people I have known in my life will consider themselves middle class. I have always considered myself middle class most of my life; but I took the time to examine what really describes a middle class person. I found this fantastic article on Investopedia by James E. McWhinney titled “6 signs that you have made it into the middle class”.
He explained that a US government task force defined the middle class by 6 financial aspirations; home ownership, automobile ownership, a college education for the kids, retirement security, health care coverage and family vacations.
A very interesting list I suppose. In my relaxed research on dealing with money problems, I came across the assertion by Robert Kiyosaki that one of the key causes of money problems is what he called ‘The middle class delusion’. The fact that several of use believe we are middle class and therefore that has earned us a right to have some things and so if we cannot afford those things, we still feel a need to get them and will get ourselves into financial trouble getting them because we, in reality cannot afford those things..
Taking the 6 aspirations that represent the middle class, I want to ask if you are truly middle class
- Home Ownership- Renting in the middle class or highbrow parts of town does not mean you are middle class, it just means you are living the delusion of being middle class. The difference between ownership and renting is that rent takes money out of your pocket on a monthly basis while with ownership; you have an asset- something that can potentially yield you money if need be. Many folks stay in the rented house because they find that they cannot afford to buy in the middle class area but they want to live there. Owning a house in the ‘poorer’ part of town stops you shedding out money you cannot gain back and hey it is an asset, though it might not be worth as much as homes owned in the posh parts.
- Automobile Ownership- Owning a car tells folks you are middle class, and then we usually go on to try and own some types of cars, that make the ‘statement’ clear. Car ownership is a liability- it takes money out of your pocket; petrol, maintenance, servicing, repairs. But we understand that it is a necessity for most. Folks go into debt to buy the car that befits their ‘status’. That’s the middle class delusion at work; your actual status should be what you are worth in real time.
- A University Education for the kids- I am a firm believer in higher education as a minimum for kids. The very smart poor people kill themselves to get this for their kids. In the UK, University education is about the £10,000 mark for students now and the US is about $20,000 both per annum. Well, there are student loans in place because government helps people to ‘aspire to the middle class’, but they also load debt ahead for folks. A university education is an asset (it will earn you money in the future), so there might not be many problems with getting a student loan if it is used for the studies…..not for drinking!
- Retirement Security- Running out of money in retirement is the biggest fear that folks in the developed world have now. In the developing world sometimes the pension is not enough to give the basic life you want. To be truly middle class, you want to have a life that is not a step down on what you had in your working years. If your retirement security is not enough to achieve this; you might not be middle class yet after all.
- Health care coverage- Barack Obama’s biggest domestic programme was health care coverage for millions. In the UK, being able to have access to private medical care is sometimes considered a middle class feature. In Nigeria where I come from originally, you had better have your money on hand when you appear at the hospital or you will be getting substandard to no care. If you cannot afford qualitative care for your household you are not middle class
- Family Vacations- When ‘middle class’ families begin to have financial problems. Still being able to go on family holidays is the key factor that re-asserts to them that they are still middle class. They will use credit cards and other forms of borrowing just to go on family holidays. The folks that can’t afford family holidays are clearly not middle class in the opinion of most.
If you have all these 6 in place without any form of borrowing then congratulations you truly are middle class. Me, I am still working on it!
Picture- courtesy BMW 320d GT Luxury Line (F34) – Frontansicht, 21. Dezember 2013, Düsseldorf