8 Middle Class Habits That Keep You Poor

This is why the middle class is struggling.

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Chapters

00:00 Start Here
00:51 Not Understanding What The Middle Class Is
02:12 Thinking Your Salary Will Do All The Work
03:26 Viewing Your Salary As Your Income Ceiling
04:30 Working Hard To Make More Money
06:08 Waiting Too Long To Invest
08:38 Interrupting Compound Interest
10:40 Saving For Spending
11:39 Borrowing The Maximum

The middle class is struggling in the United States. When it comes to why, we often place the blame on billionaires, politicians, and corporate America; however, a huge reason the middle class is struggling is because of habits the middle classes possesses that are so normal we don't notice them. In this video, I share 8 middle class habits that are keeping the middle class poor.

1. Not Understanding What The Middle Class Is

To be in he middle class means living an average life and treating yourself on occasion; however, many people think that it is living a life of luxury and can afford anything you want. When people perceive the middle class this way, the end up creating a lifestyle they can't afford.

2. Thinking Your Salary Will Do All The Work

One blessing and curse of being in the middle class is having a comfortable salary that affords you a good quality of life. Oftentimes, when people get these comfortable salaries, they think that they do not need to do things like budget, track their expenses, and set goals. Instead they think that their comfortable salary will do all the work. What then happens is that they create a lifestyle they cannot afford and have no idea why they are struggling financially.

3. Viewing Your Salary As Your Income Ceiling

Another curse of this comfortable salary is that it often traps people into having one stream of income: their paycheck. When people make a comfortable salary, they start viewing their yearly salary as their income ceiling--the maximum they can make in a year. When they view income this way, they increase their income ceiling at a very slow rate. Instead, we should focus on developing other ways like investing or creating passive income to increase our income ceiling.

4. Working Hard To Make More Money

Many middle class people think that the harder you work, the more money you make; however, this is not true. Hard work will allow you to make more money, but only up to a certain point. The reason is because your income is directly tied to your labor and you are limited as a human in how much you can work. Instead, to get to the next level, you must find ways to generate income that is not tied to you working.

5. Waiting Too Long To Invest

A huge mistake middle class people make when it comes to investing is choosing to wait to invest until they are in their 40s or 50s. The problem with this is by then, you have missed your critical years to build your wealth through compound interest. It is important to invest right away, as soon as possible, so you have the maximum time to grow your wealth.

6. Interrupting Compound Interest

Another mistake middle class people make when it comes to investing is being fearful and interrupting compound interest. When you interrupt compound interest and withdraw your investments out of fear, you risk losing a lot of money. It is important to trust the process of investing and hold during both good and bad times.

7. Saving For Spending

When you ask many middle class people why they are saving, the reason is often for some material possession. Many people save money to spend money. This is dangerous because it makes people stagnated in their financial lives. If it important to see the benefits of saving to build wealth so that you make progress financially.

8. Borrowing The Maximum

The final habit that keeps middle class people poor is borrowing the maximum amount of money that it offered by a bank when taking on a loan. Banks aren't looking out for your best interest and oftentimes offer loans people can't actually afford. It is important to look at your own financial situation and decide for yourself how much you can afford.

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[nagarcia]

Some of us don't care about experiences and traveling to see the world. I am just fine sitting in my own home, reading a good book and being at peace. And this ladies and gentlemen is why I have money saved. ❤

[simonshura]

Crazy how this guy never runs out on videos on saving money 😅

It's really like, he actually is living what he preaches and good for him 😌

[Suntz_u]

My outlook on money changed when I realized someone making $300, 000 can retire broke & someone making $80, 000 can retire a multi-millionaire. Living within your means and living a frugal lifestyle is the first step to financial independence. I just hit the one million mark last year, cheers to everyone striving to get there someday.

[kaninma]

All we need is enough to cover our expenses with a little extra to save for the future and maybe a few special treats here and there. Doing that while working part-time can give you a very good life. In the US, doing this is generally not readily possible unless you do not have to pay rent.

[UsurpersAndAssassins]

You've got a really good point here. I look around and all I see is "middle class" people spending and living like they are millionaires. The whole thing is ridiculous, and it's all based on jealousy. They all compare themselves to the wealthiest people instead of the people below them.

[marias]

It's my birthday month and I'm splurging. I'm very good at being frugal and saving and living within my means, but I'm treating myself this month

[noreenn]

Sadly, an income of $60k is not nearly enough to afford an entry level home, IF you can even find one.

[LifewithTee]

I understand your points. I think the problem is that many folks now in the middle class were raised by folks that were maybe lower middle class or lower class. So, they were not taught how to use their money to make money. Now some will teach themselves (which is what I did) and others will fail at building wealth.

[DahmanYafuso]

*If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation*

[cyoishi]

Another spot on video. The key is for people to take responsibility for their own actions and not blame outside forces.

[MindOfPatrick]

I’ve seen a couple people with upper middle class salaries like $100k+ a year, and don’t have a dollar to their name because they blow every check on designer clothing, fancy restaurants, renting a ridiculous apartment, leasing expensive cars.

[frankprit]

Most people (at least my age group) Gen-Xrs. didn't have any money to invest when we were in our 20s, because we had a wife and children to support.
the sad truth is, if you want to be wealthy, don't get married and have kids.
Life is not supposed to be that way, but unfortunately, that's the reality we live in.)

[Revert]

I am 55 and have lost a butt-load in flipping houses in the past. (I bought too many too fast on borrowed money). However, it taught me a lot about buying homes.
1- home ownership is a huge responsibility. The mortgage is only a piece of it. Most houses we bought were in dilapidated conditions. The people were paying their mortgage but could not afford the upkeep. I loved living in an apartment and being able to call maintenance to fix issues and it cost me zero.
2- The mortgage may be fixed but the property taxes and homeowners insurance is not.
3- if a person can actually save 10% for a down payment, that person will likely be successful. Anyone who has sacrificed and committed to saving will make a good choice in buying an affordable home.
4- Kids are happy in a small house or a large house. Once children become teens, they may need more room. Meanwhile, take advantage of the young years, stay in a smaller home and build your wealth.

[benjamineprg]

Financial planning and retirement strategies are crucial, especially in today's economic climate. With global economic fluctuations and uncertainties, it's essential to have a solid plan in place to protect your financial future.

[BagsNBaguettes_]

The thing that gets me about buying stuff and has really opened my eyes: we pay so much taxes and then get taxed on top of that for every purchase! We are being taxed to death..💀

[DavisBrown]

*Great content! Very interesting form the start. there are difficult times and I appreciate the sensitivity with which you discuss. Trading and investing are great ways to build wealth and I have no doubts about the profitability of the cryptocurrency market. Earning a weekly income. But I really do have a question. For someone with less than $1000 to trade or above. How would you recommend we enter into trading as a newbie? I would greatly appreciate any suggestions*

[vikingprincess]

Absolutely!
There is a poor mindset and a successful mindset. Once you discover that your money is supposed to work for you, you’ve turned the corner and opened a whole new world of possibilities.

[nicolasbenson]

Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.

[DesertMav]

I do suffer from that last habit where I save up for something and then I wind up back at zero after I get said item. However, I've begun to work on this issue and focus more on paying down debt again. The good news is that I now have an emergency fund that I refuse to touch and I have some additional in regular savings as a buffer. Another thing to do is to try to pay above minimum payments on any sort of debt that you have. I have a loan I took out to do some remodeling at my house and I was paying the minimum for over 6 months before realizing that I wasn't really paying anything down. I decided to add $100 on top of the minimum per month and now the loan will be paid off in 1/2 of the term of the loan.

[joannebeauchamp]

I had a friend tell me once that she called the class directly BELOW the middle class as “Working Class.” That seems to make a lot of sense to me. $60, 000 per year is still a fairly healthy income, but what about those who are sandwiched between middle class and lower class, earning, say, $25, 000-60, 000 per year? There’s your “Working Class!” Don’t forget them! 👍🏿👍🏿