Either You’re Rich or Poor – There’s No Middle Class Left!
Dear Reader,
It’s been ten years since the 2008 financial crisis and the demise of Lehman Brothers, and the shock waves of the cataclysmic event can still be felt throughout the Western World, whether good or bad. One of the biggest victims was and still is the American middle class, which covers a broad range of people and can be further divided into smaller groups, such as the lower and upper middle class.
According to a study conducted in 2016 by the Pew Research Center, over half of American adults are in middle-income households, with a further 29% in lower-income homes. Just 19% of American adults enjoy upper incomes.
Within the middle class itself, upper to lower households are typically earning anywhere from $39,000-$100,000. This is also influenced by location and the number of people living in the household itself. Most studies were conducted based on a household size of three.
Historically, the well-being of the middle class has always been a metric of a nation’s economic health and condition, however, the middle ground between the wealthy and the working class has become smaller in recent decades.
Eroding the Middle Class and Creating the Rich/Poor Divide
“The middle class in this country has been decimated” – Donald Trump
The sad truth is that the dollar (and every government-printed currency) has lost its purchasing power, meaning the savings people spent decades accumulating are degrading and rotting in their bank accounts thanks to inflation and rising costs of living.
This means salaries no longer provide the same standard of living that those before us enjoyed. To make matters worse, real estate has continued increasing in value. In 2018, what we earn and what we can purchase is severely out of balance.
Combined with the everyday person struggling to hold tangible wealth, the de-monetization of precious metals, and real estate out of reach for many, the middle class has crumbled, with only a small minority truly profiting from the situation.
The dollar has lost over 90% of its purchasing power, with each generation working harder for less.
93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.
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House prices have continued to rally, returning to pre-2008 prices and beyond, with even more debt sustaining the “everything bubble” we are now in again.
The middle class never had a chance against such an insane economic system. The end result of this wealth purge is a social divide with only the rich and poor.
Economic Misery for Some, Easy Money for Others
The deliberate chaos brought by inflation can be looked at from two perspectives: the wealthy (who are already financially established) and the working class (who have to fight to stay ahead of the rate of inflation and living costs).
Poor are Getting Poorer
As illustrated earlier, the lower middle class and the poor make up the majority of adults in America. As a result, they are the ones who suffer the most from the rigged economic system.
Inflation gives bigger numbers on a screen but less buying power. With the acquisition of real estate out of the pay grade of many in the U.S., generating real wealth has never been harder.
Low-paying incomes are forcing people to find secondary or part-time occupations to simply stay ahead of a diminishing quality of living.
It’s an uphill battle that has decimated the middle class by design, creating a deep social divide not just in the U.S.A., but all over the Western World. Wealth distribution is now so unbalanced that the super-rich have total control of the entire economic spectrum. Those at the bottom are monetizable resources for the elites.
Upper Middle Class are Better Off, But Not Immune to the Dying Dollar
These would typically range from upper middle class to rich.
The highest salaries are coming from the healthcare and technology sectors. With these incomes, workers are still victims to diminishing purchasing power, but they’re able to keep ahead of inflation by having greater amounts of disposable income for value investing and obtaining real estate, making assets monetizable and enabling easier growth of wealth.
Super Rich Getting Richer
Let’s look at the other end of the spectrum. Despite high-paying salaries, the true wealth remains within the top 1%, or super rich who benefit most from the “everything bubble” and can afford to take risk in high-yielding investments, such as innovative, industry-dominating businesses or the latest tech stocks.
For decades, the super rich have slowly obtained the majority of the world’s wealth. As the chart above illustrates, the 2008 crash widened the gap between the rich and poor, where the 90% scramble over what is left.
The only way to stay out of economic hell is to make your wealth grow. Understanding the importance of monetizing investments could save you from economic doom!
Prosperous Regards,
Kenneth Ameduri
Chief Editor, CrushTheStreet.com
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