This page has been archived and commenting is disabled.

What Does It Take To Be Middle Class?

Tyler Durden's picture




 

Submitted by Charels Hugh-Smith of OfTwoMinds blog,

By standards of previous generations, the middle class has been stripmined of income, assets and purchasing power.

What does it take to be middle class nowadays? A recent paper, The Distribution of Household Income and the Middle Class, used Census data to discuss what sort of income it takes to qualify as middle class, but reached no firm conclusion: people tend to self-report that they belong to the middle class based on income, but income is not the only the metric--indeed, it can be argued that 12 other factors are more telling measures of middle class membership than income.

In Why the Middle Class Is Doomed (April 17, 2012) I listed five "threshold" characteristics of membership in the middle class:

1. Meaningful healthcare insurance
2. Significant equity (25%-50%) in a home or other real estate
3. Income/expenses that enable the household to save at least 6% of its income
4. Significant retirement funds: 401Ks, IRAs, etc.
5. The ability to service all debt and expenses over the medium-term if one of the primary household wage-earners lose their job

I then added a taken-for-granted sixth:

6. Reliable vehicles for each wage-earner

Author Chris Sullins suggested adding these additional thresholds:

7. If a household requires government assistance to maintain the family lifestyle, their Middle Class status is in doubt.
8. A percentage of non-paper, non-real estate hard assets such as family heirlooms, precious metals, tools, etc. that can be transferred to the next generation, i.e. generational wealth.
9. Ability to invest in offspring (education, extracurricular clubs/training, etc.).
10. Leisure time devoted to the maintenance of physical/spiritual/mental fitness.

Correspondent Mark G. recently suggested two more:

11. Continual accumulation of human and social capital (new skills, networks of collaborators, markets for one's services, etc.)

And the money shot:

12. Family ownership of income-producing assets such as rental properties, bonds, etc.

The key point of these thresholds is that propping up a precarious illusion of consumption and status signifiers does not qualify as middle class. To qualify as middle class (that is, what was considered middle class a generation or two ago), the household must actually own/control wealth that won't vanish if the investment bubble du jour pops, and won't be wiped out by a medical emergency.

In Chris's phrase, "They should be focusing resources on the next generation and passing on Generational Wealth" as opposed to "keeping up appearances" via aspirational consumption financed with debt.

What does it take in the real world to qualify as middle class? Let's start by noting that real (adjusted for inflation) income has barely budged in 40 years, while household income has declined: Soaring Poverty Casts Spotlight on ‘Lost Decade’:
 

According to the Census figures, the median annual income for a male full-time, year-round worker in 2010 — $47,715 — was virtually unchanged, in 2010 dollars, from its level in 1973, when it was $49,065.Overall, median household income adjusted for inflation declined by 2.3 percent in 2010 from the previous year, to $49,445. That was 7 percent less than the peak of $53,252 in 1999.

Here is a chart of the real income of the lower 90% and the top 10%, which by definition cannot be "middle class":


The top 10% takes home 51% of all household income:

Here are my calculations based on our own expenses and those of our friends in urban America. We can quibble about details endlessly, so these are mid-range estimates. These reflect urban costs; rural towns/cities will naturally have significantly lower cost structures. Please make adjustments as suits your area or experience, but please recall that tens of millions of people live in high-cost left and right-coast cities, and millions more have high heating/cooling/commuting costs.

The wages of those employed by Corporate America or the government do not reflect the total cost of benefits. Self-employed people like myself pay the full costs of benefits, so let's "get real" and count *all* costs paid to maintain a middle-class lifestyle.

1. Healthcare. Let's budget $13,000 annually for healthcare insurance. Yes, if you're 23 years old and single, you will pay a lot less, so this is an average. If you're older (I'm 60), $13,000 a year only buys you and your spouse stripped down coverage: no eyewear, medication or dental coverage--and that's if your existing plan is grandfathered in. (If you want non-phantom ObamaCare coverage, i.e. a Gold plan, the cost zooms up to $2,000/month or $24,000 annually.)

Add in co-pays and out-of-pocket expenses, and the realistic annual total is between $15,000 and $20,000 annually: Your family's health care costs: $19,393 (this was before ACA).

Let's say $15,000 annually is about as low as you can reasonably expect to maintain middle class healthcare.

2. Home equity. Building home equity requires paying meaningful principal. Let's say a household has a 15-year mortgage so the principal payments are actually meaningfully adding to equity, unlike a 30-year mortgage. Let's say $5-$10,000 of $25,000 in annual mortgage payments is interest (deductible) and $15-$20,000 goes to principal reduction.

3. Savings. Anything less than $5,000 in annual savings is not very meaningful if college costs, co-pays for medical emergencies, etc. are being anticipated, and $10,000 is a more realistic number given the need to stockpile cash in the event of job loss or reduced hours/pay. So let's go with a minimum of $5,000 in cash savings annually.

4. Retirement. Let's assume $6,000 per wage earner per year, or $12,000 per household. That won't buy much of a retirement unless you start at age 25, and even then the return at current rates is so abysmal the nestegg won't grow faster than inflation unless you take horrendous risks (and win).

5. Vehicles. The AAA pegs the cost of each compact car at $6,700 annually, so $13K per year assumes two compacts each driven 15,000 miles. The cost declines for two paid-for, well-maintained clunkers. Average cost of auto ownership: $8,946 per year. let's assume a scrimp-and-save household who manages to operate and insure two vehicles for $10,000 annually.

6. Taxes. Self-employed people pay full freight Social Security and Medicare taxes: 15.3% of all net income, starting with dollar one and going up to $113,700 for SSA. Since an adjusted gross income (AGI) of $66,193 or more puts you in the top 25% of earners, let's use a base income (self-employed) of $68,000 to calculate our SSA/Medicare taxes: that's about $10,000 annually.

Property taxes: These are low in many parts of the country, but let's assume a New Jersey/New York/California level of property tax: $10,000 annually.

Income tax: Since the mortgage interest is only $5-$10K a year, itemized deductions are less than the standard deductions of around $18,000. One-half of the self-employment tax is deductible, as well as the health insurance and IRA retirement contributions, so that's another $30,000 in deductions. That leaves about $20,000 in taxable income and about $3,000 in Federal tax, and let's assume $2,000 in state and local taxes for a total of $5,000.

7. Living expenses: Some people spend hundreds of dollars on food each week, others considerably less. Let's assume a two-adult household will need at least $12,000 annually for food, utilities, phone service, Internet, home maintenance, clothing, furnishings, books, films, etc., while those who like to dine out often, take week-ends away for skiing or equivalent will need more like $20,000.

8. Donations, church tithes, community organizations, adult education, hobbies, etc.: Let's say $2,000 annually at a minimum.

Note that this does not include the cost of maintaining boats, RVs, pools, etc., or the cost of an annual vacation.

Here's the annual summary:

Healthcare: $15,000
Mortgage: $25,000
Savings: $5,000
Retirement: $12,000
Vehicles: $10,000
Property taxes: $10,000
Other taxes: $15,000
Living expenses: $12,000
Other: $2,000

Total: $106,000

Oops. That's more than double the median household income. OK, let's assume the mortgage is a bit high, ditto the property taxes. Let's say we need "only" $96,000.

Oops again: our tax calculations were based on $68,000 in self-employed net earnings. To earn $96,000, our taxes are going to skyrocket, as we're still paying the full 15.3% SSA/Medicare taxes while we'll jump into the 25% tax bracket when our taxable income exceeds $35,000. Since we'll be paying at least $15,000 more in SSA and income taxes, then we're up to $111,000 as the minimum household income to maintain a middle class lifestyle for two self-employed adults.

An individual earning $111,000 is in the top 10% of all wage earners. A household earning $111,000 is in the 80%-90% income bracket--the lower half of the top 20%. This suggests that the "middle class" has atrophied into the 10% of households just below the top 10%. Households in the "bottom 80%" are lacking essential attributes of a middle class lifestyle that was once affordable on a much more modest income.

Note that this $111,000 household income has no budget for lavish vacations, boats, weekends spent skiing, etc., nor does it budget for luxury vehicles, SUVs, large pickup trucks, etc. There is no budget for private schooling. Most of the family income goes to the mortgage, taxes and healthcare. Savings are modest, along with living expenses and retirement contributions. This is a barebones budget.

If costs had stagnated along with wages, it would take a lot less to maintain a middle class lifestyle. But costs for most middle class essentials have skyrocketed. I was struck by something I read recently in a history of the Tang Dynasty in China, circa 700-900 A.D. When costs are cheap, goods and trade are abundant and prosperity is widely distributed. Once costs rise, trade declines and living standards stagnate. Poverty and unrest rise.

Here are a few charts that illustrate the pressures on the middle class:
Wages have risen modestly while debt has increased enormously.

Social Security taxes have skyrocketed:

So have property taxes: they rose right through the last recession even as property values tanked:

Labor's share of national income has plummeted:

Interest income has fallen through the floor (thank you, Federal Reserve):

The bedrock of Main Street, small business, has cratered:

Net worth of the middle income households has been reduced to a sliver:

As costs have risen faster than incomes for decades, households have been priced out of the middle class. By standards of previous generations, the middle class has been stripmined of income, assets and purchasing power.

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 12/05/2013 - 16:12 | 4218816 Seasmoke
Seasmoke's picture

Game Over.

Thu, 12/05/2013 - 16:14 | 4218825 knukles
knukles's picture

Another speech from Dear Leader and I'll be all OKayed for another week or so.
Hungry, tired, cold, frightened, with no fucking prospects, but happy to be in the arms of my Grand Federal Family.

Die you fuckers.

Thu, 12/05/2013 - 16:22 | 4218842 hedgeless_horseman
hedgeless_horseman's picture

 

 

If I get rid of the wife and kids I think I can make it.

Thu, 12/05/2013 - 16:25 | 4218854 Ignatius
Ignatius's picture

The wife is gone and the kid is grown.

It works, but it's lonely. 

Thu, 12/05/2013 - 16:28 | 4218868 hedgeless_horseman
hedgeless_horseman's picture

 

 

Oh to be gay with an income-producing partner. 

The new middle class?

Thu, 12/05/2013 - 16:29 | 4218877 Ignatius
Ignatius's picture

I'll send you a pic, HH, if you'll wedge me in the middle.

Thu, 12/05/2013 - 16:46 | 4218945 Janice
Janice's picture

They look like twins, except one with long hair.  I have often wondered if attraction to the same sex was a type of self-love...narcissism???

Thu, 12/05/2013 - 16:50 | 4218962 Enslavethechild...
EnslavethechildrenforBen's picture

WHO do you have to do to be middle class

Thu, 12/05/2013 - 16:59 | 4218982 Killer the Buzzard
Killer the Buzzard's picture

Is that Phil Leotardo behind Ellen?  I thought he got whacked.

Thu, 12/05/2013 - 17:19 | 4219049 AldousHuxley
AldousHuxley's picture

Middle Class = WORKING Class

 

0.1% Owners who decide which game to play

1% Rulers who decide rules of the game

10% Enforcers who decide how to execute the game

20% Prized game players

50% Benchwarmers

bottom 50% workers outside the stadium not even allowed to see the game in person

Thu, 12/05/2013 - 17:25 | 4219079 AldousHuxley
AldousHuxley's picture

Egypt

 

Royalty decides to get buried in a giant 3D triangle

Aristocrats and Advisors decide to build a pyramid next to a river and have citizens work on it instead of some other work such as farming for food

Military guards make sure to keep everyone in line

Skilled tradesmen and builders are allowed to lead other workers and how to get stuff done

Slaves drag stone from one place to another till they die

The old, children, women are kept far away from the pyramid

Thu, 12/05/2013 - 17:32 | 4219095 AldousHuxley
AldousHuxley's picture

America

 

Royalty decides to get buried with lots of digital 1's and 0's in their bank account in database in switzerland

Aristocrats and Advisors decide to build factories of both goods and services and have men and women work on it instead of some other work such spending time with their their family

Military, NSA, police make sure to keep everyone in line and break up unions, unauthorized protests, etc.

Skilled businesspeople, atheletes, and scholars are allowed to lead the unwashed masses

Wage slaves shuffle pieces of paper one place to another till they die.

The old, children are kept far away from reality with TV.

Thu, 12/05/2013 - 23:32 | 4220259 Raymond K Hessel
Raymond K Hessel's picture

High holy fuck!!!  

 

What a shitty premise....puh lease----- 

 

M E D I A N   I N C O M E   <>   M I D D L E   C L A S S

 

You can't look at an economic chart and say here's the middle class anymore than you can find Goths, Bikers, Immigrants, College Grads, Pedophiles..... it doesn't work.  Middle Class is a social demographic, not economic.  Economically, most middle class people fall in the top 10% range of income.  Always has, always will.

 

You're fucktards are talking about the Median Class.

Thu, 12/05/2013 - 20:55 | 4219886 FredFlintstone
FredFlintstone's picture

Nice.

Thu, 12/05/2013 - 16:47 | 4218954 Enslavethechild...
EnslavethechildrenforBen's picture

He'll yes I'd tap that

Thu, 12/05/2013 - 17:01 | 4218989 Overfed
Overfed's picture

Need to get rid of the ugly cunt on the left.

Thu, 12/05/2013 - 16:31 | 4218885 Skateboarder
Skateboarder's picture

Staring guy in the back.

Thu, 12/05/2013 - 16:33 | 4218896 Ignatius
Ignatius's picture

I'm younger and better lookin', but not by much.

Thu, 12/05/2013 - 16:45 | 4218943 Dave Thomas
Dave Thomas's picture

Oooh Hey! I Just busted his chops a little and now he's startin to get fuckin fresh!


http://images2.wikia.nocookie.net/__cb20121028215836/godfather-fanon/images/9/97/Billy_Batts.jpg

Thu, 12/05/2013 - 16:30 | 4218890 knukles
knukles's picture

Sorry, but that's upper crust 1%, in this case psychotic bat shit crazy as all hell limousine liberal

Thu, 12/05/2013 - 17:38 | 4219110 kaiserhoff
kaiserhoff's picture

You forgot bugs in their heads;)

Thu, 12/05/2013 - 17:13 | 4219032 0b1knob
0b1knob's picture

Didn't Ellen drive her previous partner to become heterosexual?  Or crazy?

Thu, 12/05/2013 - 17:18 | 4219051 Agent P
Agent P's picture

No, we're not homosexual...but we are willing to learn. 

Thu, 12/05/2013 - 17:33 | 4219096 marketheretic
marketheretic's picture

There's a reason why this is the number 1 demographic for new accounts/assets in the financial services industry.  Every branch manager I know is actively looking for the "right" people that can reach the LBGT market!

Thu, 12/05/2013 - 17:31 | 4219093 Sleepless Knight
Sleepless Knight's picture

I'd rather be lonely than miserable.

Thu, 12/05/2013 - 16:27 | 4218865 novictim
novictim's picture

So you are saying that a wood chipper is the path to middle class status?

Thu, 12/05/2013 - 16:33 | 4218898 max2205
max2205's picture

And that's why the government is buying a lot of bullets

Thu, 12/05/2013 - 16:42 | 4218934 centerline
centerline's picture

Nah.  The middle class is being crushed into a lower class in what is becoming a two class society.  The current lower class is going to be crushed into oblivion.

The system always requires slaves.  Those who do not work do not quality as slaves and are more expendable as a result (unless smokin' hot).

Thu, 12/05/2013 - 18:52 | 4219407 AGuy
AGuy's picture

"Nah. The middle class is being crushed into a lower class in what is becoming a two class society. The current lower class is going to be crushed into oblivion. Those who do not work do not quality as slaves and are more expendable"

So far, the Middle class is the only wage slave, feeding the top 0.1% and the bottom 40% collecting welfare benefits. The Middle class is paying both sides: rich and poor. The poor aren't really slaves since they can choose not to work and simply live off welfare, All they need to do is vote for the people that will continue to provide welfare.  Sooner or later the Middle class is not going to pay as thier jobs are getitng outsourced or eliminated. The middle class is becoming extinct.

At this point the poor are much more important to the politicans (at least the DNC) as they depend on the poor to win elections. The DNC and to a lesser degree, the RNC are waging a war against the middle class, and the middle class is getting slaughtered. The Middle class no longer has the voting power to influence elections.

 

 

Thu, 12/05/2013 - 19:04 | 4219479 Flakmeister
Flakmeister's picture

Instead of projecting what you would like things to be, why don't you actually breakdown what demographic votes what....

You know, real research....

You will be suprised at what you might learn...

Thu, 12/05/2013 - 22:56 | 4220181 AGuy
AGuy's picture

"Instead of projecting what you would like things to be, why don't you actually breakdown what demographic votes what"

Lets see. Who won the last two elections? Do you think the majority voters were taxpayers or takers?  Boomers: do they vote for those that cut entitlements or increase them? Do you think if boomers are given the option to working until 90, or take SS to retire that they will choose the former? Of those without jobs, do they vote for welfare reform? Speaking of Demographics, is the number of people in the workforce increasing or declining? What was the labor force participation rate in 2000 and what is it today? How about the wages, Wasthe median household income in 2004 higher or lower than 2013?

 Its not what I want things to be, its the way they are. If you asked what I want, i want the number of those living on the dole to disappear, but thats not realistic, wouldn't you agree Mr Flak?

"You will be suprised"

What I to be surprised at? I got all wrong, and the economy is booming?, Are you suggesting there are hardly anyone dependant on the govt? Poverty is going to be extinct soon? Please explain how I got it all wrong. Thanks!

 

 

Thu, 12/05/2013 - 23:42 | 4220290 Flakmeister
Flakmeister's picture

Yawn....

Fri, 12/06/2013 - 11:20 | 4221312 AGuy
AGuy's picture

Yup, That's exactly the reply I was expecting.

 

Fri, 12/06/2013 - 15:52 | 4222471 akak
akak's picture

Obamameister always seems to get tired when backed into a corner.

Sun, 12/08/2013 - 10:53 | 4226512 Flakmeister
Flakmeister's picture

You still missed the point...

See for example:

http://www.democracycorps.com/Republican-Party-Project/inside-the-gop-report-on-focus-groups-with-evangelical-tea-party-and-moderate-republicans/

There are other polls and studies as well..

In other words quit making shit up...

Thu, 12/05/2013 - 16:32 | 4218894 666
666's picture

Why bother to work and become middle class when you can stay at home, visit friends, fornicate and smoke weed without working thanks to the dole and ObamaCare?

Thu, 12/05/2013 - 16:40 | 4218926 NOTaREALmerican
NOTaREALmerican's picture

Re:  Why bother to work and become middle class

Yeah,  actually, why bother to become "middle class".   Isn't the entire point of life to be happy?   You aren't going to get rewarded for "working or being middle-class" except with more bling.

Thu, 12/05/2013 - 17:29 | 4219085 starfcker
starfcker's picture

Blah blah blah. What a total crock of shit. defining middle class is much simpler than that. the ability to own a home and raise a family. same criteria as to whether a job is really a job.

Thu, 12/05/2013 - 18:10 | 4219205 SilverRhino
SilverRhino's picture

Because I like to avoid the idea of being someone else's farm product and avoid being prepared for slaughter?

Thu, 12/05/2013 - 18:04 | 4219174 DosZap
DosZap's picture

the difference between me and those couples you mention is that I'm not a debt whore.  I'm not chinese but I'm doing like those old dudes you talk about and building something up for the kids.  Got a 15 y/o car, no iGadgets, but I can manage some modest savings.

 

Here is where one needs to be very watchful.

I raised my chidddren to be hard workers,and when they got out of hand on WHAT kind of clothes,etc they HAD to have.(you know because ALL the other kids had them!).I sat em both down,and told them they would still be dressed appropraitely, just NOT in the style in which they had become accustomed to.AND if they WANTED the $100.00 tennis, and $100.00 blouses, then they would GET a job.

Which they promptly did, took my son about 90 days to decide he did not NEED AiR Jordans,etc.My daughter never learned and she has managed to be a debt slave,along with her hubby.

So, in light of that, WE as parents must pass along any inheritances based on Stewardship.My daughter WILL get some, but she will be 55-60yrs old before she sees a dime,unless I see a vast turnaround prior to.Our Chiddddddddddddddren do not automatically deserve our savings, and the fruits of our labors, and frugality simply by vitrtue of  blood.

That is stupidity,and is a tremendous disservice to them.

 

Thu, 12/05/2013 - 16:23 | 4218824 Mercury
Mercury's picture

In Why the Middle Class Is Doomed (April 17, 2012) I listed five "threshold" characteristics of membership in the middle class:

1. Meaningful healthcare insurance

 

Think you might want to amend that to just: "Meaningful healthcare"

Remember when "homeowner" was big Middle Class metric?

Don't confuse the marker for the underlying, real value.

Thu, 12/05/2013 - 16:18 | 4218831 Ignatius
Ignatius's picture

I'm middle class.  I have a big screen TV.

Thu, 12/05/2013 - 16:26 | 4218862 just-my-opinion
just-my-opinion's picture

I own my house....but if I don't pay 8,000(city...state...who the fuck knows)....some dumb-ass will take it in the future...and my taxes are not that high...so I know where the GOV sucks....Take...Take...Take....and take some-moar

Thu, 12/05/2013 - 16:34 | 4218905 Getting Old Sucks
Getting Old Sucks's picture

Home owners rent their house from the government and government makes sure the "home owner" maintains that house according to code.

Thu, 12/05/2013 - 17:17 | 4219042 Rubbish
Rubbish's picture

6.5 C-3 acres sitting on a lake, taxes $90 a YEAR. Will be loading a bubble top van and seeing the sights and girls. Rest a bit do it again. Health insurance is a hand loaded special round with my name on it should I get terminal. Damned if I'm gonna let some death panel decide my fate.

 

Gold/Silver bitchez, you can deposit my check in the bank.

Thu, 12/05/2013 - 18:28 | 4219281 scrappy
scrappy's picture

Where is this haven?

Thu, 12/05/2013 - 20:49 | 4219857 FredFlintstone
FredFlintstone's picture

+1000. If I could get the ol lady to see the wisdom in this, I would be doin the same.

Thu, 12/05/2013 - 16:36 | 4218915 Cannon Fodder
Cannon Fodder's picture

I've started thinking about this lately. How depressing that person can work hard and pay off a property/home only to have it taken away if they don't pay rent to the government. Thus in effect you never really own property. How did this every come to be? I also read a story a while back where cities are selling off the late taxes to debt collectors who just come in and take the property leaving you out in the streets. I'm waiting to see people start making it "interesting" to reclaim that property just because of some late taxes on a full paid off property...

Thu, 12/05/2013 - 16:47 | 4218952 Getting Old Sucks
Getting Old Sucks's picture

You're late to the party but an arrow up for showing up.

Thu, 12/05/2013 - 16:53 | 4218953 NOTaREALmerican
NOTaREALmerican's picture

Re:  don't pay rent to the government

If you mean property taxes then here are a few good reasons:

1)  If you don't pay,  I don't pay.   People are assholes that way.
2)  If we both don't pay another group of assholes will probably make life hard on me (note, I don't care about you, I'm an asshole too).
3)  That means I'd have to hire private cops, firemen, and garbage collectors (most of whom are assholes)
4)  As there would be no public schools, most people's asshole kids would be out on the street acting like the assholes their parents are.
5)  I'd have to pay for more cops.

Life is really just a big visious circle of trying to avoid assholes worse than the guy in the mirror,  which is what government is really about.   We (collectively) hire assholes to control other assholes and hope things work out.

Thu, 12/05/2013 - 17:24 | 4219070 rustymason
rustymason's picture

With or without government, it's about which gang you belong to. The U.S. gang leadership has been infested by hostile foreigners and is not so hot on protecting us anymore. That's what all the new security is about, preventing a better gang from coming to power and taking control from the current coven.

Thu, 12/05/2013 - 20:48 | 4219852 FredFlintstone
FredFlintstone's picture

Damn, there are a hell of a lot of assholes where you live. Even the guy in the mirror. I am glad I live in the USA.

Thu, 12/05/2013 - 18:28 | 4219288 scrappy
scrappy's picture

Happens all the time.

Thu, 12/05/2013 - 16:20 | 4218833 just-my-opinion
just-my-opinion's picture

You can be middle-class today.....I should be but I get the rod....I don't even have children

Thu, 12/05/2013 - 16:35 | 4218835 Hongcha
Hongcha's picture

An interesting analysis.  I often converse on this subject with my Maoist-cum-Capitalist wife who grew up with a vast mouthbreathing class and a very small elite, namely the Chinese Communist Party members.

I suggest a somewhat different set of factors, one that boils down to simple balance sheet calculations s/a cash in hand, income over debt service, debt-to-equity, amount of leverage in play over savings, quality of credit purchases, and so forth.

I know many in the professional class who have the accoutrements of upper-middle-class in say Walnut Creek or Mill Valley who are living paycheck to paycheck while paying off student loans, childrens' student loans, their huge houses and their 2-3 cars per household and 4-5 iPhones.  Net negative but with bling and big faces.

I also know even better many shabby-looking old Cantonese guys walking around on Grant Street in Chinatown who are cash millionaires with no debt overhang whatsoever; art collections, RE paid for.

They learned the hard way not to stick out.  Many of them dress nearly in rags and still save 50% or more of their net.  They are the Anti-Bling and Anti-Status.  BTW the blacks know this and target them for strongarm because they still have and carry cash.  They despise the Heiren as animals and it's hard to argue.

And imagine this -- it is heavily important to them that they save to help their children move forward - they forgo many comforts even after they no longer need to.  I have learned a great deal from them and enjoy the freedom they enjoy, and I imitate it every day.

 

Thu, 12/05/2013 - 16:36 | 4218902 Moe Hamhead
Moe Hamhead's picture

There's wisdom there Hong.

Thu, 12/05/2013 - 17:39 | 4219119 HoleInTheDonut
HoleInTheDonut's picture

My numbers are really close to the hypothetical case there, slightly higher, but the reality is like he says.  So I'm in the top 10% of income, for at least the last five years.  I arrived, but when I got there I didn't get new cars and exotic vacations, all that stuff. 

 

the difference between me and those couples you mention is that I'm not a debt whore.  I'm not chinese but I'm doing like those old dudes you talk about and building something up for the kids.  Got a 15 y/o car, no iGadgets, but I can manage some modest savings.

Thu, 12/05/2013 - 20:57 | 4219899 FredFlintstone
FredFlintstone's picture

Where is this Milf Valley you speak of?

Thu, 12/05/2013 - 16:20 | 4218836 RaymondKHessel
RaymondKHessel's picture

Middle Class? That's history. There's:

>.01%-Uber Rich

>1%-Filthy Rich

>5%-Very very Rich

>=10%-Rich

<90% Soon to be on the dole.

Thu, 12/05/2013 - 16:22 | 4218841 RaymondKHessel
RaymondKHessel's picture

I'm middle class I just slept at a Holiday Inn Express and had a Salsbury Steak Lunch with 2000mg of sodium to boot.

Thu, 12/05/2013 - 16:22 | 4218848 CaptainSpaulding
CaptainSpaulding's picture

I'm middle class. I own the Columbo dvd box set seasons 1-7

Thu, 12/05/2013 - 16:35 | 4218899 knukles
knukles's picture

May I recommend the ObieDontGiveAShitCare Serious Psychological Gold Help Package as a consolation prize?

Thu, 12/05/2013 - 18:36 | 4219316 scrappy
scrappy's picture

Peter Faulk and Alan Aldrin - Serpintine!

https://www.youtube.com/watch?v=A2_w-QCWpS0

Thu, 12/05/2013 - 16:23 | 4218852 Flakmeister
Flakmeister's picture

Amzing how those curves related to income equality inflected under St. Ronnie....

Trickle down is clearly a winning strategy, as long as you don't look at the data....

Thu, 12/05/2013 - 16:36 | 4218897 akak
akak's picture

You got my automatic downvote for propagating more specious "red team/blue team" partisan bullshit.

And how do the income curves look under your beloved Obamessiah?

Thu, 12/05/2013 - 16:42 | 4218922 Flakmeister
Flakmeister's picture

Would you prefer if I said '80s? 

And yes, BHO has done jack shit to change things, not that the House would let him anyway even if he could...

Face it Akak, you just have a problem with any form of statism. And you are blind if think there is no difference between the Red and Blue team...

You live in complete fucking denial of all recorded history, the state always emerges because someone wants it to, because it is in certain peoples interest to see it rise...

Get over it...

Thu, 12/05/2013 - 17:15 | 4219011 Overfed
Overfed's picture

The "wealth effect" espoused by your messiah O'bomb-a is even worse than Ronnie's trickle down economics by an order of magnitude at least. Not to mention he hasn't been President in nearly 25 years. Talk about needing to get over it.

Thu, 12/05/2013 - 17:15 | 4219040 Flakmeister
Flakmeister's picture

Hey, all I am pointing out is that the slope changed under St. Ronnie and it has not budged since. That is where the Middle Class started to disappear... 

Moreover, you have a serious reading comprehension problem if you think that what I wrote is any form of a endorsement of BHO...

The only thing I can say in defense of BHO, is that he is not Mitt Romney. That is the very definition of "damning with faint praise"...

Thu, 12/05/2013 - 17:28 | 4219074 Overfed
Overfed's picture

The curve really started to change under Nixon, due to his and his predecessor's policies, and it would probably have done so considerbly earlier if not for the destruction of most of the worlds industrial base via WWII.

At any rate, when you indict someone for hating statism, it sure sounds like an endorsement thereof. I will agree that Ro-money is a mega-douche and not one thing would have changed for the better had he been elected.

Thu, 12/05/2013 - 17:57 | 4219163 Flakmeister
Flakmeister's picture

  Correct in that the American Golden Age was in part due to the shattered remains of the world's economy needing time to rebuild. But there is more to it than that...

----

Statism simply is, whether I like it or not. It is part of our ascent to a technically advanced civilization, get over it. Not liking it is not going to make it go away. The "state" has always been the means by which power has always been exerted, it has many forms and it obviously has evolved. But short of a subsistence level society, it will be always be there. Because somebody will always parlay a materiel superiority into power and project it through the state. This has been true at basically ever instance of our recorded history...

The best we can do is keep the crazies out...

-----

As for Nixon:

I will repeat this once again:

Study these two charts very very carefully

The first figure here:

http://goldnews.bullionvault.com/US_gold_reserves_01120092

and

http://en.wikipedia.org/wiki/File:US_Crude_Oil_Production_and_Imports.svg

----

Did you correlate the increasing imports of oil with the cessation of the dollar convertability in gold?

Did you think is was really some big conspiracy, or simply the fact that no one thought it was a good idea to tell the American People the game was over? They had no choice but to print....

In other words, did you really think the US was going to either cut oil use by 50% or see all of the world's gold in OPEC hands? 

Do you think that the US would knowingly throw it's global hegemony out the window to keep their currency tied to gold?

Thu, 12/05/2013 - 18:09 | 4219201 Overfed
Overfed's picture

Statism will only get worse with an attitude like yours. Or maybe wanting real liberty is obsolete?

I understand why the gold standard was abandoned; it boils down really to the government's desire (and most of the people's, I suppose) to live beyond it's means. A welfare/warfare state costs big bucks, and due to Fed-driven inflationary forces, a little more every year.

And great, the funneling of gold to the MENA was averted only to see it all funneled to the Far East. We lost far more than we gained, unles you're a banker or MIC/LE/surveillance/for-profit-prison operator.

Thu, 12/05/2013 - 18:41 | 4219344 Flakmeister
Flakmeister's picture

I am personally far more worried by corporations who project their power through the state... They are the one with the real power, or is that not obvious?

BTW, I tire very quickly when people blather about "welfare state" and use bullshit labels, seriously... Do I need to show you the the Federal deficits at the time? Or a breakdown of spending over the past 40 years? 

Look, the game is control of the means of settlement for oil, when you start to realize that it becomes alot clearer.   No one wants to recreate Mao's Great Leap Forward...

It is clear that we have nothing further to discuss...

Thu, 12/05/2013 - 20:48 | 4219850 akak
akak's picture

 

I am personally far more worried by corporations who project their power through the state... They are the one with the real power, or is that not obvious?

Fuck are you clueless.

And no, it is NOT obvious!  More precisely, what IS obvious is exactly the converse --- it is only through the inherently coercive, corrupt and sociopathic institution of government that the corporations which you so fear have any meaningful power at all.  And even at that, their power pales in comparison to the power of the parent institution through which they obtain their secondary and derivative power, that again being government.

You liberals (and many so-called "conservatives" too) are idiots when it comes to discerning cause and effect --- you consistently and ignorantly can only see the superficial facade, and never the underlying causes and prime movers.

Thu, 12/05/2013 - 23:50 | 4220306 Flakmeister
Flakmeister's picture

Akak, it is very obvious, maybe living in Alaska has shielded you....

Fri, 12/06/2013 - 00:39 | 4220401 DaveyJones
DaveyJones's picture

it's really a conundrum. There's very good arguments for either theory. The corporations do not rise to evil global power without say, for example, our supreme court ruling their money is now an unlimited form of speech or the second or first branch announcing that they are for sale 24/7. Mankind, along with his business structures, have always been greedy. The corporations only got to their new thrones with significant help, help that dripped all the way down to a complacent generation - and probably complacent because of that sick apex of easy and soon obsolete energy - something you know well. This stuff has drugged everyone, and like any drug, completely skewed our perspective, made us lazy, brain damaged, fiscally stupid and unskilled. This predicament is all our fault, each and every one of us. Every stupid, purchased or lying leader, every naive, partisan or complacent citizen, every SUV suburban mother more concerned about the size of their master bedroom than their new master in the press room and most of all the "wise ones" who saw a glimpse of things and only bitched. It took us all to get here. it will take a lot of us to get out        

Fri, 12/06/2013 - 01:24 | 4220512 Miffed Microbio...
Miffed Microbiologist's picture

Flak, you must acknowledge that without the government as enabler corporations could not begin to exert the massive takeover of our economy. I watched myself the local Walmart squash local small business by pricing items below cost. They knew they could hold out having the capital advantage. This was all clearly illegal. Look at the revolving door between the FDA and big Pharm executives. Clearly conflict of interest. The overt duplicity today is utterly shocking. Why aren't antitrust laws being enforced and violators prosecuted? The government and corporations want only two things, power and money and they use each other to get them. Linked together they are a powerful force, perhaps unstoppable.

There is no chicken or egg argument here. This clearly starts with a corrupt government.

Miffed;-)

Fri, 12/06/2013 - 09:51 | 4220555 Flakmeister
Flakmeister's picture

Just who is capturing what when "regulatory capture" occurs... That is your tell. 

Politics has been dirty since politics began, there is more to it than that. The administration of U,S, Grant was as crooked as they came. And that was hardly the era of proactive government. You convieniently forget that there was big business acting as the state before big government, read your history... Company towns, use of private security (e.g. Pinkerton) to deal with disputes. The emergence of the trusts in the late 19th century predates any progressive govemment....It is also noteworthy that you fail to mention labor as the third balancing leg. You fixate on the trees and miss the forest...

The process of Corporations coopting the state has been a ongoing process since the 1880s. This did not happen overnight...

Not everything happened because of 1913, 1886 was a very important date as well. Do you know why?

Fri, 12/06/2013 - 14:12 | 4222027 Miffed Microbio...
Miffed Microbiologist's picture

I am no arguing this is unique to today. Pick any random point in the history of the world and you will find this dynamic. Either in small microcosm in a tiny town in an obscure pacific island or in modern day USA.

Just recently, I was purusing an article highlighting the building of the railroads which was frought with deception and speculation causing swaths of money to flow to the Railroad Barons. History books don't begin to cover the depth of corruption of these men and their government counterparts. I suspected as much, so was not surprised to find the level of duplicity was greater than I had known.

My point is not to debate the start of such a dynamic but to formulate a solution. Anything else is banter over cocktails at a party. At some point we may have the technology to discover the exact point mutation in the first cancerous cell that occured in a person's body. Now that we have this information what good is it to us? We still have a wildly proliferating cancer that is killing our patient. Will he find solace in our knowledge? A plan of action would be more fruitful.

History can be instructive and predictive. It has it's uses. But every person who documents the past always,either unwittingly or purposely, adds their own personal bias. This is also true of scientific research. I always view both with a certain amount of skepticism having been shown their inaccuracies numerous times in my life.

Miffed;-)

Thu, 12/05/2013 - 17:15 | 4219037 DLux
DLux's picture

There really is no difference between blue team/ red team anymore when talking about sucking up to corporations and banks. Obummer is a facist, Shrub was a facist...

Thu, 12/05/2013 - 17:21 | 4219050 Flakmeister
Flakmeister's picture

This is for the most part a defensible statement that applies to 80% of the Federal pols...

But please do not even suggest that there is no difference between a person like B. Saunders and Ted Cruz...

I will also provide the House Science Committee as Exhibit B....

Thu, 12/05/2013 - 17:38 | 4219115 Uncle Remus
Uncle Remus's picture

Well, enligthen us as to the difference between a person like B. Saunders and Ted Cruz...

Thu, 12/05/2013 - 17:58 | 4219167 Flakmeister
Flakmeister's picture

Why don't you get off your lazy ass and learn for your self?

Thu, 12/05/2013 - 18:22 | 4219246 Uncle Remus
Uncle Remus's picture

Hey, it's YOUR comment and YOUR perception I am asking about. Whom else should I axe?

Thu, 12/05/2013 - 18:25 | 4219264 Disenchanted
Disenchanted's picture

If there's a TV camera in the vicinty, not much. But that applies to most of the Congress Critters.

btw I think FM means Bernie Sanders...

Thu, 12/05/2013 - 18:10 | 4219209 Overfed
Overfed's picture

I don't know who B. Saunders is, but I sure know there was a big difference between Nazi Pelosi and Ron Paul.

Thu, 12/05/2013 - 18:25 | 4219261 Uncle Remus
Uncle Remus's picture

RP is most likely human.

Thu, 12/05/2013 - 19:17 | 4219543 Overfed
Overfed's picture

That is one important difference. :-)

Thu, 12/05/2013 - 16:27 | 4218866 centerline
centerline's picture

Knocked it out of the park on this one CHS.  Simple terms.  Ugly truth.

Well done.  Doesn't even cover all the bases actually.  Doesn't need to.  Enough said already.

Thu, 12/05/2013 - 16:26 | 4218867 lolmao500
lolmao500's picture

What does it take to make hundreds of millions of $$$ on a lie? A big ass coverup that's what...

http://nypost.com/2013/12/05/global-warming-proof-is-evaporating/

The 2013 hurricane season just ended as one of the five quietest years since 1960. But don’t expect anyone who pointed to last year’s hurricanes as “proof” of the need to act against global warming to apologize; the warmists don’t work that way.

....

That admission came in a new paper by prominent warmists in the peer-reviewed journal Climate Dynamics. They not only conceded that average global surface temperatures stopped warming a full 15 years ago, but that this “pause” could extend into the 2030s.

Thu, 12/05/2013 - 17:59 | 4219059 Flakmeister
Flakmeister's picture

The NY Post....

Yep, a fucking bastion of integrity brought to you by Rupert Murdoch....

Why don;t you cite the paper and what it really said?

Thu, 12/05/2013 - 16:28 | 4218871 akak
akak's picture

What, no first-in-thread post by fonestar to weigh in on how owning Bitcoins is part and parcel of being "middle class"?  I'm disappointed.

Thu, 12/05/2013 - 16:52 | 4218967 knukles
knukles's picture

Fuck him

Thu, 12/05/2013 - 18:38 | 4219332 Blano
Blano's picture

The BTC threads have gotten old already, and I didn't learn much from them either.

Thu, 12/05/2013 - 16:30 | 4218873 NOTaREALmerican
NOTaREALmerican's picture

Survival of the fittest, bitchez!!!

Thu, 12/05/2013 - 16:40 | 4218924 centerline
centerline's picture

For the last 20 years it seems to have been survival of the fattest.  ha ha.

Thu, 12/05/2013 - 16:52 | 4218965 alien-IQ
alien-IQ's picture

That is a term often used but always failing to define "fittest".

For example, who is fitter, the man capable of plowing his own field and yield food from it, but cannot afford to own it or the man who can buy that field, but not operate it, and employ the farmer as servant?

In Compton, it may mean he who has the most guns and willingness to use it. In the Hamptons, it's more likely he with the biggest credit line.

But which is truly "fitter"?

Thu, 12/05/2013 - 17:09 | 4219019 NOTaREALmerican
NOTaREALmerican's picture

Only the DNA bling, of the DNA bling, of the current generation can answer THAT question.

The DNA doesn't care.   It wins regardless.

Thu, 12/05/2013 - 17:20 | 4219053 alien-IQ
alien-IQ's picture

thanks for the insightful reply. i feel richer, if not fitter, for having read it.

Thu, 12/05/2013 - 20:39 | 4219810 FredFlintstone
FredFlintstone's picture

The one who "survives", get it? SURVIVAL of the fittest. Adaptation.

Thu, 12/05/2013 - 16:30 | 4218874 reader2010
reader2010's picture

 the fancier term for working class in Amerika has always been middle class. 

Thu, 12/05/2013 - 16:31 | 4218883 NOTaREALmerican
NOTaREALmerican's picture

+1000

The wages made middle class possible.  

Thu, 12/05/2013 - 17:18 | 4219052 darteaus
darteaus's picture

And sound money + low tax rates.

Thu, 12/05/2013 - 17:40 | 4219125 Uncle Remus
Uncle Remus's picture

That and an honest return on investments.

Thu, 12/05/2013 - 16:30 | 4218875 Getting Old Sucks
Getting Old Sucks's picture

People have been lied to for decades into believing they were middle class.  That's how the 1% got the borrowed money of the bogus middle class.

Thu, 12/05/2013 - 16:34 | 4218901 NOTaREALmerican
NOTaREALmerican's picture

Re:  People have been lied

Bullshit works.    Middle class now means expectations of increasing future bling.  

Thu, 12/05/2013 - 16:31 | 4218887 Species8472
Species8472's picture

The middle class is just the middle, it may be poor but it is still the middle. The only thing to debate is how much of the middle. I would say from about 30% to  80% based on incom.

Thu, 12/05/2013 - 16:43 | 4218938 Getting Old Sucks
Getting Old Sucks's picture

So that's where the gov used the terms upper middle, middle, and lower middle.  They wanted most workers to ID with being middle.  Keep them working, borrowing, spending.  More taxes collected, more profits for the 1%, more political contributions to stay in power.   

Thu, 12/05/2013 - 16:31 | 4218891 Peter Pan
Peter Pan's picture

The middle class of my parents' generation was also able to:

  • help their children substantially with the purchase of their first home
  • give substantial baby sitting services looking after grandchildren to enable daughter/daughter in law to return to work
  • able to retire before 65
  • left enough wealth to enable the funding of their grandchildren's first home.

Thanks to the downturn in the economy and a growing selfishness amongst baby boomers I see this trend coming to an end if not reversing.

 

Thu, 12/05/2013 - 16:44 | 4218940 alien-IQ
alien-IQ's picture

And that was on a single income household.

Thu, 12/05/2013 - 16:45 | 4218946 TheFreeLance
TheFreeLance's picture

Try this: Turn of the century (20th) farming couple work their Midwest land into their 70s, sell it, bank proceeds at a sane non-ZIRP rate. Live modestly but comfortably for 20 more years, each year mailing out 4-figure checks to their kids and grandkids, admonishing them to work hard and emulate them.

Hands up who thinks that happens in 2084?

Thu, 12/05/2013 - 17:23 | 4219048 darteaus
darteaus's picture

Now?  Not legally in the US, but possible if you dodge taxes.

2084?  Not in the US, but maybe somewhere else.

Thu, 12/05/2013 - 16:39 | 4218921 TheFreeLance
TheFreeLance's picture

Techno utopians will counter with -- Yes, but you have Netflix and access to thousands of movies and iTunes for billions of songs, your Kindle is full of hundreds of books and Facebook and Twitter are free. And all are in your hand, anytime, anywhere. You have never been wealthier.

Muppet.

Thu, 12/05/2013 - 16:46 | 4218947 superflex
superflex's picture

35K a year on a house?

Fuck the McMansion dude.  I live very comfortably paying less than $1k/mo which includes property tax.

 

Thu, 12/05/2013 - 17:02 | 4218994 alien-IQ
alien-IQ's picture

Yes, but when did you buy and where are you located?

That does not seem like a realistic price for a home in any metropolitan area in the US.

You can find those prices in many parts of South America, but that is a different topic completely.

I'm sure you can even buy a house for far less then that...in the Congo, but do you want to live there?

Thu, 12/05/2013 - 17:33 | 4219099 Agent P
Agent P's picture

I heard yesterday that the average rent (as in no equity accumulation for the one paying it) in San Francisco is now $3,400/month.  That's some crazy shit right there! 

Thu, 12/05/2013 - 18:57 | 4219426 steve2241
steve2241's picture

Equity?  Home ownership is a losing bet.  Get over it.

Thu, 12/05/2013 - 17:36 | 4219105 darteaus
darteaus's picture

$70K - Commute distance to San Jose, CA.  Safe, clean, lower middle class area.

http://www.trulia.com/property/1043419338-824-F-St-Los-Banos-CA-93635

Thu, 12/05/2013 - 17:44 | 4219135 Uncle Remus
Uncle Remus's picture

What constitutes a "commute distance" in CA would put you 3 states over on the east coast or on a turnpike in flyover.

Thu, 12/05/2013 - 18:11 | 4219202 darteaus
darteaus's picture

Pretty much, but the Comcast guy who came to my house (30 miles past San Jose) was pumped to be living there.  He drove a company truck, so he didn't have to pay gas.

It took me a month to understand his point of view, but I think it's:

He makes $25/hour, and it takes him an extra 90 minutes of commute time a day to live there.  So, if the company pays his gas, it "costs" him $37.50 (pretax) to live where he gets a 3BR, 2.5BA home in a descent! middle class neighborhood where people have pride of ownership.  His kids walk to school, he has a jet ski and he lives near hunting & fishing - for $1200/month + "$37.50 * 22 days / month".

From his position, I'm an idiot scrambling to pay mortgage + tax + tuition to save 90 minutes / day.

Thu, 12/05/2013 - 18:33 | 4219308 SilverRhino
SilverRhino's picture

Nice price but you literally live in a communist shithole.  

 

 

Thu, 12/05/2013 - 18:12 | 4219207 darteaus
darteaus's picture

Don't you ever tire of the gunfire?

Thu, 12/05/2013 - 18:28 | 4219254 superflex
superflex's picture

Bought a $180,000 house 7 years ago in the burbs of Cincinnati after my divorce.  No gunfire in my neck of the woods.

No it's not NYC or SF, but I dont have to step over homeless, needles and queers to get to work either.

20 minute commute on the outer loop in the S4.

 

Thu, 12/05/2013 - 16:58 | 4218983 alien-IQ
alien-IQ's picture

The new rich will be those without debt.

Thu, 12/05/2013 - 17:11 | 4219028 razorthin
razorthin's picture

It's gonna take money - a whole lot of spending money.  It's gonna take plenty of money to do it right, child.

Thu, 12/05/2013 - 17:16 | 4219047 q99x2
q99x2's picture

I was a bum screaming "Up my FASFA Yellen Mother Fucker" and then my Bitcoin went up 100 times. I skipped all that middle class horseshit. I mean whats the sense of working for anything other than the inner voice. If people don't start listening to the song of creativity enough to allow them to see the beauty in life what is it all worth. Share your knowledge. Allow others to be heard and seen. Validate existence with appreciation for what is. Buy BitCoin.

Thu, 12/05/2013 - 18:08 | 4219198 Advoc8tr
Advoc8tr's picture

“Human life must be some kind of mistake. The truth of this will be sufficiently obvious if we only remember that man is a compound of needs and necessities hard to satisfy; and that even when they are satisfied, all he obtains is a state of painlessness, where nothing remains to him but abandonment to boredom. This is direct proof that existence has no
real value in itself; for what is boredom but the feeling of the emptiness of life? If life—the craving for which is the very essence of our being—were possessed of any positive intrinsic value, there would be no such thing as boredom at all: mere existence would satisfy us in itself, and we should want for nothing.”
? Arthur Schopenhauer

Which is why the ubers still work 14/7 even after making their first 100mill ... all that money and still they cannot stop, relax and enjoy "life"   Shame I only managed to mine 25 coins back in the day ... at least I found them backed up when it hit the news and hadn't thrown them into the rubbish ?

http://www.smh.com.au/technology/technology-news/man-searches-landfill-for-79m-bitcoin-fortune-20131202-2yki8.html

 

Thu, 12/05/2013 - 17:22 | 4219060 quasimodo
quasimodo's picture

Well according to this I can say yes to about all of the talking points, but making ends meet has never been harder and get worse each year. 

At least I know my dollars purchasing power is not eroding.

/sarc

Thu, 12/05/2013 - 17:31 | 4219094 Uncle Remus
Uncle Remus's picture

Went Galt.

Thu, 12/05/2013 - 18:07 | 4219194 Dagny Taggart
Dagny Taggart's picture

good choice ;-)

Thu, 12/05/2013 - 17:45 | 4219143 MsCreant
MsCreant's picture

When I payed off my student loans and house, it all changed. I had been working it stupid for years with a partner that kept spending and putting a drain on us both with credit cards and all. I took his debt and got the house that had very little equity in it. I refinanced, folding his debt into the house. I paid down, like crazy, my student loan. I lived frugally but it was not a big deal. The second he was gone, even with his debt, I starting digging my way out. I took credit cards and put the student loans on there. Turned a 9% loan into 2% AND made it so that it was a nonrecourse situation if I did become unemployed. Paid the cards off faster because there was not as much being eaten up by interest. Then when my student loan was paid, took the cards at 2% and loaded up the house on it. Now the money going to the student loans was going to the mortgage. The point being that now, I have both loans paid off, I have no debt, there is no house payment, I live near work, I have a wonderful clunker car, a new hubby who carries his own weight and does not send me to the poor house, and I can more than breathe. I save. I am not rich, but getting out of debt was key. 

I have a similar income to the one stated in the article for a single earner. I have fun with clothes (not designer fun, but look good fun), I eat organic, cook most of our meals paleo, I have good health, I do not own income producing assets, but I can weather a few years of unemployment if I had to.

I am middle class because I am modest. Maybe I missed the point of the article, but the article asks too high a standard of living. I don't spend anything like the amounts he lists. I have more than plenty and I am grateful.

Thu, 12/05/2013 - 18:18 | 4219223 Ghordius
Ghordius's picture

love your comment

Thu, 12/05/2013 - 18:29 | 4219296 Rottenclam
Rottenclam's picture

@MsCreant - I can kind of relate.  The journey of getting into massive debt was not nearly so glorious and fun as the final months of finally digging myself out of it.

Now that I have a much more advanced handle on my personal finances, I am starting to actually build "wealth".  A lot of these folks on Zero Hedge are very savvy and maybe know their way around making lots of dough by using the market, but I've had to come by my loot by actually bashing my head into the wall via stupid mistakes...and then learning how to not spend more than I earn.

My present lifestyle would be considered quite frugal by some and downright cheap by others.  So when I looked at the numbers in this article, I just shook my head.  I'd friggin' cry if my monthly expenses were aligned with the numbers in this article.

Thu, 12/05/2013 - 18:35 | 4219319 combatsnoopy
combatsnoopy's picture

"payed" = "paid"?
You didn't graduate from college.  

Thu, 12/05/2013 - 19:44 | 4219646 TalkToLind
TalkToLind's picture

Fuck college.  It basically teaches people how to speak with authority about shit they know nothing about.  And for that "skill" you get saddled with massive debt.

Thu, 12/05/2013 - 20:33 | 4219786 FredFlintstone
FredFlintstone's picture

FU Snoopy. Your long winded post about real estate was pointless. At least she had a point and a good one. 

Thu, 12/05/2013 - 18:46 | 4219368 Blano
Blano's picture

Excellent.  If you have a single sister like you, send her my way.

Fri, 12/06/2013 - 13:11 | 4221760 DaveyJones
DaveyJones's picture

MsC

If you have some spare time, can you run congress?

Thu, 12/05/2013 - 17:51 | 4219152 Ayr Rand
Ayr Rand's picture

Once households have to start paying reasonable interest rates such as 7% on that debt, then be prepared to be amazed. And, by the way, that household debt is owed disproportionately by those with smaller wealth and income, who have been living the American dream (albeit funded by foreclosing on their future). So they will be hit the hardest. 

Thu, 12/05/2013 - 17:54 | 4219155 quasimodo
quasimodo's picture

When that happens it all comes to a very loud, metallic even, screaching halt. I envision it becoming painfully obvious those that are living large, yet hand to mouth, as you mention in your post. 

Living here in the midwest I can see shades of the 80's farm crisis coming back home to roost. It will be ugly for sure with all the ancillary industries that rely on each other.

 

Thu, 12/05/2013 - 18:11 | 4219196 FreeNewEnergy
FreeNewEnergy's picture

13. Ability to read through bullshit, like, #1, $13,000 annually for healthcare insurance. What are you, fucking stupid?

Um... don't answer that.

But, if you and honey-boo-boo are taking in 100,000 annually, you ain't making it, because your figures are fucking stupid ($2,000 for "other", which is probably more like $5000).

You're also a moron for citing all the examples and income and expense computations for typically-brain-dead couples in America who have their pay raped by the government before they even receive it, then are thrilled to get a refund. This typical CHS "of two (stupid) minds" kind of household probably has a netflix subscription, has a 56" big screen teevee, financed cars, eats out at least twice a week, thinks doing all the politically-correct things like going to house parties, buying Christmas presents and eating GMO crap are an essential part of the "American experience."

Who the fuck cares if you're middle class? I don't, and my 3 1/2 acres of arable land certainly don't, nor does my shotgun or guard dog. Fuck you and your middle class BS. People are sick and stupid to want to be classified. You're fucking chattel. Get used to it, slave.

The only people who've got this licked are those who have made choices for themselves and most of them have left the plantation, douche-bag. Middle class may have its place in polite suburban society, but, seriously, nobody in the country gives a flying shit.

Fuck off. Your articles are boring as shit.

Nice chart porn, though. I'll give you props for that.

Thu, 12/05/2013 - 18:29 | 4219243 combatsnoopy
combatsnoopy's picture

Since we're chatting about class warfare and the once was "middle class"... I have a little story from Los Angeles about how non-rich minorities made out on poverty pimping and stuff.

 

First off, I want to say I missed this site, this site was blocked at a city government finance department Just west of Los Angeles with the zip code of 90401. So Congrats! You totally beat me at p*$$ing someone off before I had the wonderful opportunity to do so! (I was making fun of the amount they spent on "artists" to paint over walls when normal humans get busted by the city for "vandalizing" their own properties, paying "historians" $107/HOUR when I don't think my own doctor makes that much... etc. Their police has a Boston Mastiff named "Rambo" too!)

And I finally remembered my password this time!

Look past the spectacle. Look at California's big secret in real estate. The real estate IS way overvalued.

Here's the trick question: Would claiming yourself as "black" on a mortgage application would win you some favors. :)

I angered the retiring boomer piece of trash when I said that SM's real estate is way overvalued (oh dear, don't take away the property taxes!)

Santa Monica IS crime ridden, ghetto and even dangerous in some parts. I used to live there. The European students are screaming about the violence- they pay the higher rents but HATE violence. I hate violence with a passion.

Now take the 10 freeway eastbound 10 miles (from the PCH) to Jefferson Park. A 2 bedroom house in Jefferson Park Los Angeles with 1404 sq. ft goes for $275,000. http://www.zillow.com/homedetails/2420-W-Jefferson-Blvd-Los-Angeles-CA-9...

 

A 2 bedroom house in Santa Monica with 1264 sq. ft goes for $1.6 MILLION http://homes.yahoo.com/california/santa-monica/2920-neilson-way-unit-402... The quality of the houses here are at par with the houses in Santa Monica.

Jefferson Park is all black.

 

SM has black hoods.

 

Government jobs were screaming "Affirmative Action" and for the first time included mostly blacks instead of latinas. THe people working there pay others to do their college homework for them. Yes there's much dishonesty there. And ample cheating.

I also heard from another black gentleman that Jews were not exactly the sharpest tools in the shed.

 

The bums are running over Santa Monica. And crime. Santa Monica was recently a very poor part of town, like Venice was. In Jefferson Park, I haven't had any problems with vandals, thugs or crime. Or dogs. Or anything. So far. And there are cops everywhere, especially by the Expo line.

 

I don't know how "location" equates to "better quality" if Santa Monica is dinged with drugs and bums. It's just prettier, but not by much. The neighborhood quality only depends on locations to a few stores? The quantity of rentals in Santa Monica are artificially suppressed by either hedge funds or private "investors"- they hoard complexes and rent out only ONE apartment.

Then gouge that one tenant for extremely high rent to pay for the maintenance, upkeep and taxes on that entire complex. If the interest rates go up... what do you think is going to happen to the properties in Santa Monica? ALL of them!

 

They gouge people $1400-$3000 for a ONE bedroom. What's going to happen to the properties in Jefferson Park? And houses... realtors take out counterfeit backed subprime teaser rate loans to flip properties to create the ILLUSION of demand.

To artificially shorten supply and inflate the cost of housing.

Nobody's bothering Jefferson Park- especially now that they're taking care of the houses and the neighborhood is CLEAN.

It's cleaner than Santa Monica-where property values exceed 6 times the housing costs in JP. THe mortgage brokers pay gangs, welfare moms and graffiti artists to create "white flight" so they can charge higher interest to new borrowers (because minorities are seen as having weak credit history and therefore the mortgage brokers want to exploit them).

 

This is called "blockbusting". Jefferson Park is full of blacks "scaring" white people? But the neighborhood itself is really just as nice as the neighborhoods in Santa Monica.

 

It's not unheard of to see a gray haired origional Panther shopping at a grocery store in Beverly Hills.

 

Ironically, Jefferson Park is so black that I had to seek out latinos anywhere in the neighborhood (I've already seen a few white people, Europeans and like, 2 asians). ???

 

Affirmative Action + bank money = perks. Is it "ghetto"? Just as much as Santa Monica is.

 

I'm neither joking or exaggerating. IF renters can't pay rent, if interest rates go up and realtors/BANKS continue to foreclose---I hope somebody has enough CASH or the ability to get a call on a house.

And in the meantime, I hope the group can comp Koreatown for the $250 mil in damages they did during the Rodney King riots (if you need any justification in becoming a less government libertarian- the Koreatown story will fully support your stance).  

If they want to retain the value of the neighborhood...well. I'm not able to make that bet. ANd RENT it out to the boomers. AT a price THEY think is fair (ie. $1800 for a ONE bedroom). :) They condoned it, they should pay. This is the utopia the collectivist boomers have always wanted.

You can make the good judgement call for yourselves.  But don't be fooled.  It's not just L.A., but the rest of California who are full of actors.  When buying here, ask people about call options on a piece of property.

 

Thu, 12/05/2013 - 19:29 | 4219584 cape_royds
cape_royds's picture

Only one question matters:

Do you control your means of obtaining income?

If the answer to that question is "yes," then you are at middle-class or better.

If the answer to that quesiton is "no," then you are a prole. You might be a prole with benefits, a prole enjoying a high wage under favourable market conditions, a prole with a diploma on the wall, or a prole who was promised a retirement by some guy holding political office, but unless you control of your means of production, you're still a nothing but a goddamned prole.

Most of the people in the developed world who got into the habit of thinking of themselves as "middle class" are in fact proletarians and were never anything but. They do not control their means of production.

In the post-WWII era the proles in the developed world enjoyed unusually high wages, which enabled them to consume goods and services at a level that had been traditionally associated with the middle class. Proles were so well paid that they could study, they could travel, they could own a residence. However, having a high consumption level is NOT the same thing as controlling one's means of producing wealth.

In our time, millions of "middle class" people are getting thoroughly schooled on the distinction between a high-paid prole, and a genuine member of the middle class.

Thu, 12/05/2013 - 19:53 | 4219673 mumbo_jumbo
mumbo_jumbo's picture

"Anything less than $5,000 in annual savings is not very meaningful"

 

i'm not even close.....:-(

Thu, 12/05/2013 - 20:10 | 4219711 Heroic Couplet
Heroic Couplet's picture

Avoided Walmart like the plague last weekend. Shopped at thrift shop. For just under $25, bought 9 men's shirts and a navy blazer for holiday party. Shirts $2 each. Blazer $5.

Thu, 12/05/2013 - 22:55 | 4220184 Emergency Ward
Emergency Ward's picture

99 Cents Store, box of 20 Xmas cards with envelopes, 99 cents, reading glasses, 99 cents, hey......

Thu, 12/05/2013 - 23:32 | 4220261 Teknopagan
Teknopagan's picture

Bruno Magli handmade Italian loafers 25.95

Fri, 12/06/2013 - 01:48 | 4220558 kareninca
kareninca's picture

Funny that CHS doesn't mention crime.  When I think of what it is to be middle class, one of my first criteria is the ablity to get through the day without being a crime victim.  Charles lives in Berkeley, CA, which has a very high crime rate.  I just went to Sperling's Best Places and did city-compare:  Berkeley has the same violent crime rate as Norwich, CT, which I think of as a tragic dangerous sh*thole that my parents will only shop in during the day, in certain areas.  US violent crime norm on Sperling's scale is 4; Berkely and Norwich are a 6.

Crime may go back to being on these sorts of lists.

And actually, if you have a low crime rate, it makes many forms of deprivation far less awful.  A high crime rate makes an otherwise okay life, terrible.  I saw a photo once of a South African township, and it didn't really look that bad to be honest.  Then I read about the crime there.

 

Do NOT follow this link or you will be banned from the site!