I was fortunate enough to be featured in an article about Why Grant Cardone Says the American Middle Class Is ‘Broken’ and how we can fix it. There is so much more to Middle-Class Finance, so let’s fix the broken.

The middle class is definitely broken, but it’s nothing that can’t be fixed! Education is at the core of the issue. I don’t know about you, by the middle-class family that I grew up in didn’t talk at all about finances. Do you think the upper class does?

So to help bridge that gap and talk about things your parents never did, here are my tips for how to thrive in the middle class:

  1. Learn personal finance. Big box AUM firms’ prey on the middle class. They know they need to invest just enough money but are too caught up in the grind to take time to manage it for themselves. We live in the age of information with excellent personal finance guidance at our fingertips. Instead of paying a firm 1.5% of your investments every single year, take a little bit of time to actually learn how to budget and invest on your own. If that is too difficult, work with a financial advisor who focuses on educating you about what they are doing instead of passively managing it for you. 1.5% over your entire lifetime is a huge number. (Probably the number 1 reason Grant thinks the middle class is broken.)
  2. Teach the next generation about personal finance. For the majority of American’s, no one talked to you about finances. Older generations have a very strong opinion that talking about finances is taboo, especially in the Middle Class. Reality is having constant conversations about your day-to-day finances is the best way to teach our kids. Budgeting is not fun, no one likes it. The people that learn about it early on are so much better off and able to actually save money back. Teach your kids how to do this at a young age and you can set them up for financial success down the road.
  3. Take advantage of your benefits.
    1. HSA’s are becoming more and more popular within companies. Use them for your long-term financial success by investing the funds instead of using them every year. If you’re relatively healthy, pay for your medical expenses out of pocket, save your receipts in an email folder and invest your HSA funds so they can grow long term. The money will grow with the market, and you give yourself financial flexibility down the road. Then use the receipts to withdraw the money when you actually need it. It is the only account that has the triple tax savings; goes in pre-tax, grows tax free, use it for medical tax free. Plus, you’ll have other options for withdrawing as you get into retirement. 
    2. Annually review the different benefits your employers offer. Everything from discounts on your cell plan to free gym memberships. Taking advantage of smaller perks can add up over time.
  4. Invest into a Roth IRA. Roth IRA’s are specifically designed to help the middle class. So much so, that they are not even available to higher income people. Roth accounts are funded after tax, so when you get to retirement age you can withdraw this money tax free. Contributions can be withdrawn at any time, giving you short-term flexibility in an emergency. 
  5. Speaking of emergencies, have an emergency fund. Emergencies will happen; it’s a fact of life. You need to be prepared to handle them as they come along without going into debt. When you do have to use it, be sure to build it back up. Be prepared for life’s challenges.
  6. Avoid unneeded debt.
  1. You’re making a decent income, so you want to show your neighborhood you’re doing well and give yourself a little taste of luxury. Debt is a killer for the middle class and banks take full advantage of that. Remember, banks have shareholders and profit for your lifestyle inflation. Avoid the debt trap, save your money instead of spending it on junk that you don’t need. The keeping up with the Joneses mentality is killing your ability to generate lasting wealth.
  2. Do not buy a new car if you don’t need one. The real way to show off is to not have a car loan. The average new car is $48k with the loan being $42k over 7 years. Keep your current car, invest that $6k and keep investing that $600 per month. At the end of 7 years $77k (8% return) in your account instead of a $10k car. Then you can pay cash and keep the cycle rolling. 
  3. Oh, and avoid Whole Life Insurance. It rarely makes sense. Term is all the middle class needs. 

Ready to actually do something about your financial situation instead of just being “okay?” Reach out to me and I’ll show you how to do it.

Disclaimer: I do not, have not, and never will claim to be a professional writer. Please excuse any spelling and/or grammatical errors. I use 8% as an average from the S&P 500, average return is really closer to 10%. All information provided is for educational purposes only and is not intended to be investment advice. The information being provided via hyperlinks may be from third-party websites and is strictly as a courtesy/convenience. When you link to any of the web sites provided here, you are leaving this website. I make no representation as to the completeness or accuracy of information provided on these websites.