Author Topic: MMM has a tough row to hoe  (Read 7421 times)

atelierk

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MMM has a tough row to hoe
« on: August 23, 2012, 02:11:43 PM »
I think this really belongs in the Antimustachian Wall of Tragedy and Comedy, but this is close enough I guess.

I was just skimming the first part of the Pew Research Center's Lost Decade of the Middle Class (Fewer, Poorer, Gloomier) and I really don't know whether to laugh or cry. While I think there is plenty of blame to go around I also have no doubt that the middle class have been their own worst enemy (financially speaking) over the years, yet only 8% think the middle class bears "a lot" of responsibility (and another 42% say "a little") for their plight.

But I can sympathize with them as well, as I was there once. I spent most of 20 years living paycheck to paycheck, feeling trapped as well as strapped. It's not a pleasant place to be, and in this economy it's got to be downright scary. I can't be so hard-hearted as to laugh at the people behind these stats. It took me 10 years to dig out of the hole I was in and turn things around.

I now look at these designations of middle class/lower class/whatever and wonder if the annual income charts mean anything really. When I was "middle class" by income, I was broke. Had a bit in savings, some in retirement, but basically was in debt up to my eyeballs. Now I live on around $2000/month - which probably doesn't make me middle class at all - but I have no debt and a bunch of cash in my stache. And unlike a lot of Boomers, I'm recently retired. But according to the bean counters, I'm now lower class (I think). Though I am still above the poverty line.

Interesting place to be: been there, done that, moved on. I'm "poor" but I'm "rich". Not sure where I fit in these stats. (Not that I really care about that part of it.) But it does seem that truth, justice and the Mustachian way have a ways to go.

Thoughts anyone?

strider3700

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Re: MMM has a tough row to hoe
« Reply #1 on: August 23, 2012, 04:30:43 PM »
I'm not sure if upper/middle/lower class is just automatically defined around income levels or if it's just come to be associated with it.    Either way like you pointed out  income level has very little to do with actual wealth levels.  You could have 1,000,000 in the bank and get your 1% in a chequing account therefore qualifying for welfare.  You could also make 250,000/year and not have 2 cents left over to put into savings.  One is definitely upper/middle class and one is definitely lower class  but  which is wealthier if probably the opposite of what is expected.

mugwump

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Re: MMM has a tough row to hoe
« Reply #2 on: August 23, 2012, 07:41:50 PM »
Moustachians have transcended class.  Below middle class in income, often upper class in assets, and perhaps upper middle class in education.  We are all different, not self-consistent, and defy the norms.

Bakari

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Re: MMM has a tough row to hoe
« Reply #3 on: August 23, 2012, 10:12:12 PM »
http://en.wikipedia.org/wiki/Social_class_in_the_United_States

Its all very complicated.  Income is a significant, but not the only, consideration.  Education and type of employment (if any) also factor in.

tooqk4u22

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Re: MMM has a tough row to hoe
« Reply #4 on: August 24, 2012, 09:04:32 AM »
I now look at these designations of middle class/lower class/whatever and wonder if the annual income charts mean anything really. When I was "middle class" by income, I was broke. Had a bit in savings, some in retirement, but basically was in debt up to my eyeballs.

This is the point that matters - income is not relevant.  What matters more it is your lifestyle desires relative to your income - the less disires that you have that cost money the less you will need.  Unfortunately, and to your point tragically, the western culture is to defines oneself by material stuff and experiences, both of which have historically been funded by debt of some kind. 

Take MMM as an example - in my view he is extremely wealthy...but lives off of a low income and demographically would be considered poor or low income as he lives at the poverty line.  Yet he has what he needs and wants and doesn't have to work - that is true wealth. 

But it is all relative.  I don't view wealth in the traditional sense such as one has $10mil or whatever number.  Wealth to me is the ability to sustain ones desired lifestyle without reliance on anyone else. Look at these three blogger examples Jacob/ERE (extreme approach), MMM (badass but more tolerable approach for the masses), and Financial Samurai (extreme the other way/consumerist approach).  You can agree or disagree with the respective lifestyles but they are all EQUALLY wealthy in my view. 

That said, aside from inerhitance/lottery/etc. people need incomes, and discipline, to achieve any of the above examples of wealth.


mindaugas

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Re: MMM has a tough row to hoe
« Reply #5 on: August 30, 2012, 09:51:40 AM »
I don't think it's complicated, it's just relative poverty. If someone who is below the poverty line has a TV and cell phone, I wouldn't consider them impoverished but I supposed the definition has widened a bit.

mechanic baird

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Re: MMM has a tough row to hoe
« Reply #6 on: August 30, 2012, 11:16:39 AM »
Net worth is a much more meaningful indicator to measure one's economical status. You can make $300K a year and spend $500K a year and got debt up to your eyeballs.. Funny thing is .. I come across those folks in my industry (financial) more often than I want to.

Jamesqf

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Re: MMM has a tough row to hoe
« Reply #7 on: August 30, 2012, 12:53:41 PM »
Not exactly a new idea.  As Charles Dicken's Mr. Micawber puts it (1850)
Quote
Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Petruchio

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Re: MMM has a tough row to hoe
« Reply #8 on: August 30, 2012, 04:18:27 PM »
I do not know. Perhaps because I am young, of the Occupy-Wall Street generation (though I did go there myself, and found it much too Woodstock-ish to be near my sympathy), I do feel cynical at times about the problems in this world. While there are tragedies, when the scope is increased to an entire country, class or generation, it is a tragedy in the classical sense, that people reap what they sow. Despite the great accomplishments of the middle class of the past generation, in the case of their financial security they have been woefully inadequate.

That is the background required to understand my sediment when I say, 'sucks to be them'.

ShanghaiStashing

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Re: MMM has a tough row to hoe
« Reply #9 on: September 06, 2012, 01:03:12 AM »
Well,

I think we're confusing the issue a bit. There is a significant difference between income during working years and income requirements during non-working years. Without a relatively high income (defined here as middle class not 'high income' according to the statistics) during your working years FI is difficult, but not impossible. As a previous poster said, the key here is what you do with the income during your working years and how you build a lifestyle that you enjoy.

MMM would probably not be retired now if he had only ever earned his current net spending. In fact, it might be said that we would have been, and likely still would be poor. However, he earned a much higher income, saved most of it, paid off all purchases and acquired his toys relatively early on and feels no need to replace them with more expensive toys. This is where the middle class goes off the rails with a 'spent don't save mentality'.

Poverty can, and probably should be thought of as income (or ability to provide) relative to needs (actual needs, not wants). Part of achieving FI is effectively 'pre-paying' some of your needs during your working years so that you don't have to pay for them during your non-working years, while at the same time working on reducing these needs to limit your dependence on consumption.

MMM and other FI folks have imputed additional spending of 12-20K per year on housing (paid for), 2-5K on vehicles (paid for and cheaply at that), and savings of 3-5K (assuming like most middle class folks you only save 5% per year). Add this to MMM's reported spending of ~28K per year and you end up with a squarely middle class lifestyle at 50-60K per year 'spent' after tax.

I suspect the definitions do reflect close to reality, but most peoples perceptions of needs are vastly inflated hence the lifestyle requirements to be 'middle class' are actually the issue.

happy

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Re: MMM has a tough row to hoe
« Reply #10 on: September 18, 2012, 07:33:53 AM »
I'm with Bakari on this one. Class is a lot more than income.

Certainly moustachianism challenges class stereotypes: FI is usually reserved for the upper classes, and moustachian level expenses akin to the lower.

Clearly Moustachians are in a class all of their own!

makincaid

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Re: MMM has a tough row to hoe
« Reply #11 on: September 19, 2012, 06:43:35 AM »
Genteel Poverty?

"genteel poverty is the condition of well bred, generally well-educated people who have little money, like a retired vicar on a fixed income."




Read more: http://wiki.answers.com/Q/What_does_'genteel_poverty'_mean#ixzz26v2gCz4Z