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The Extinction of the Middle Class

Jim Fox

Since the ‘70s, we have heard about the shrinking of the middle class, but is it true? There are some statistics that prove the middle class is shrinking but much slower than most people realize. Before we can figure it out, we need to know who exactly makes up the middle class, and that’s not as simple as you may think. Most people would say someone making $50,000 to $100,000 would be middle class, but if you lived in New York City or San Diego, $50,000 would be below the poverty line. According to the 2013 Pew Charitable Trusts’ survey of the median household income in the United States, the middle-class income fell between $25,309–$144,966. I’m sure you’re thinking that’s a pretty big range, and it is! So the real question is, “Why do so many Americans in the middle class feel like it’s shrinking?”


It all comes down to education. When we were in school, we were taught about biology, history, literature, and even trigonometry. The one thing that seemed to slip through the cracks was financial education. I remember as a high school senior taking a required course called “Life Management Skills,” which taught very few skills and nothing about life. Yes, we learned to balance a checkbook, but, beyond that, there were no true financial lessons. We learned about money the same way most Americans did and continue to do: from our parents. So, the vicious cycle that affects so many people continues. We go to college, then to work, raise a family, and, hopefully someday, we retire. Beyond that, it’s a crapshoot for most families. Few companies cater to young couples with little money to invest. The businesses would rather sell a car loan to a young professional than set up a Roth IRA or pitch the advantages of a credit card to a family rather than help them set up a 529 plan. The ironic part is that the media acts surprised at the end of the year when we find out that savings are at an all-time low and debt is at an all-time high per household.


What can we do to change course for the middle class? Education, education, education! I’m not talking about going back to college; I’m talking about changing the way we approach money and finances!


Here are 6 simple things that can really help make a difference:


  1. Live below your means. There’s an old saying about trying to keep up with the Joneses, and I’m sure we all have heard it. I tell people all the time to forget about the Joneses unless you want to be as broke as them! It’s not about how much money you make and spend; it’s about how much money you make and keep!


  1. Get rid of debt. We’ve all heard it from someone: “There’s good debt and bad debt.” But when things go bad, and you can’t make those payments, they look EXACTLY THE SAME! Of course, very few people have the cash to buy their home but have a plan to pay it off as soon as possible. I love credit card points, but if you can’t pay it off in full every month, don’t do it!


  1. Pay yourself first. This is something most people totally miss. I’ve heard it for nearly two decades: “I’ll save lots of money when I make lots of money.” But it never happens. Start saving for retirement now regardless of how much it is!


  1. Have a written plan. Most people don’t plan to fail; they fail to plan! You must have a written strategy to accomplish your financial goals. Seek out a professional that will work with you to set up a customized strategy, then follow it!


  1. Get help. “I’m retired. I don’t need help.” This is probably the most dangerous statement I hear. Retirement is absolutely the time when you need help the most. For nearly two decades, we have been talking to clients who are starting to focus on post-retirement. Instead of looking at their portfolio as cash, we recommend they look at the money as a representation of time they’ve sacrificed to obtain that amount. You must have a strategy to protect your money!


  1. Hire a financial professional. Having a relationship with a financial professional who truly understands your investment objectives and concerns is the most important part of financial education. In the early years, the advisor will keep your eyes on your financial goals. Later in life, you will transition from growth to preservation as you move forward into retirement. It is through these various stages that your relationship with your advisor will make all the difference. You need someone who understands your desires and wants and possesses the honesty to put you back on track when you wander off course.


Is the middle class going extinct? I don’t think so! The middle class is the backbone of the United States and has proven time and time again to be more resilient than expected. I do think we have a crisis in the middle class, but it’s something we all can work through. Educate yourself, get out of debt and stay there, save money for retirement and future fun, forget about those Joneses, and find a financial professional who will listen to your wants and needs. In the end, it’s up to you to take ownership of your financial situation. Oh, and did I mention debt? Get out of it and stay out of it!


Securities offered through TCM Securities, Inc., 2230 Towne Lake Parkway, Building 800, Suite 130, Woodstock, GA 30189, Member FINRA/SIPC, 404-889-8733. Insurance and annuities offered through Wadadli Financial Group, Inc. FL Insurance License #L093496.

About the Author:

Jim Fox has been in the financial industry for almost two decades and is the founder of Wadadli Financial Group in Melbourne, Florida. To learn more about Jim and the herd mentality, visit If you are interested in a complimentary consultation with Jim, call Wadadli Financial at (866) 678-6806 or email him at


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