Wealth Podcast Post

Are You Middle Class?

George Grombacher June 23, 2023

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Are You Middle Class?

Are you middle class? Is that something you aspire to be, or does the thought of it bother you? While we may be more financially successful today versus the 1980s, it doesn’t necessarily feel like it. 


George talks about the reasons why so many of us are struggling to get ahead financially. 


Here’s the WSJ article:



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George Grombacher

Episode Transcript

What a time to be alive. What a time to be alive. By most measures by most available measures. This right now is the best time to be alive if you live in the United States of America the best place to be alive in history of humanity. But it doesn’t necessarily feel like that does it? Depending on what your situation is, it’s hard to come to grips with the idea that stuff really seems pretty bad than a lot of ways. But actually look at the numbers and break everything down. Pull your perspective back far enough. We’re doing pretty well.

Unknown Speaker 0:42
Do you remember Robin Leach? Robin Leach, and lifestyles of the rich and famous, it would close the show with you wishing you champagne wishes and caviar dreams.

Unknown Speaker 0:56
And it’s highly possible that you have no idea what I’m talking about. It’s worth revisiting. But the idea the name of the show says it all Lifestyles of the Rich and Famous before

Unknown Speaker 1:12
lifestyles and excess were ubiquitous which they are today before. We were all broadcasters before, influencers before social media before Pimp My Ride before cribs, there was lifestyles of the rich and famous. And if you trace it back that timeline,

Unknown Speaker 1:36
I I was a little kid. And or maybe I was you know, when it was on or maybe it was replays, it probably should have done more research and tell you exactly when that show was actually airing on TV. But I’m well aware of who Robin leach was rest in peace.

Unknown Speaker 1:54
But I wonder I wonder if when people were watching that show back in the 80s? Did they view that lifestyle lifestyles that Robin leach was was detailing as accessible?

Unknown Speaker 2:09
Or do people think about it, like that’s completely inaccessible and 100% out of reach for me? I wonder. It’s more just voyeuristic. Like, we get to take a peek inside how the other half lives, how the other 1% lives. That’s my perception. Somebody I would love to, to get somebody’s take on that and what your feelings were, if you were, you know, consuming that. Because now where we are today, let’s just let’s just assume that that’s what people thought was that, wow, this is fun to be able to watch and look at. But that’s never something that I’m ever going to be able to do. It’s not a lifestyle I’m ever going to be able to have.

Unknown Speaker 2:52
Fast forward to 2023 where we are today. I think that most everybody thinks especially young people think that the number one career that young people want is influencer, YouTube star.

Unknown Speaker 3:07
And I think that everybody thinks I’m going to be rich. And it’s not outside of the realm of possibilities. It’s without question very possible because people are doing it every day, getting rich and famous on the internet, get millions of followers on Tiktok. And this that the other thing, and probably a million different platforms I’m not even aware of. So you went from this is not even it’s fantasyland to this is my my buddies makes a million dollars a year, make tic tock videos. So very, very different.

Unknown Speaker 3:42
Where am I going with this? I was reading The Wall Street Journal. And there was an article about the cost of living versus the cost of thriving in America. What’s it says forget the cost of living? What’s the cost of thriving in America. And as always, I will link the article in the notes. And the idea was that in the 80s, what was it really what did it take to be in the middle class versus what it takes to be in the middle class today. And they measured your your really basic staples like cost of transportation and food and housing and health care and education. And the big takeaway is that, although it might not feel like people are better off today than they were in the 1980s, they are so kind of like the whole thing. And a lot of Steven Pinker’s work talking about how by most objective measures, this is the best time to be alive for human being ever even though it doesn’t feel like it. So perception, reality, feelings versus what’s really going on. Not not crazy that there’s a gap between those two things. Obviously, you and I both know that.

Unknown Speaker 4:55
But what made me what kind of popped into my head was what I

Unknown Speaker 5:00
started with was do people want to be in the middle class? Is that aspirational?

Unknown Speaker 5:07
And I don’t think that the answer is yes, I think the answer is no. I think that there might be a stigma around being middle class.

Unknown Speaker 5:17
And I’d be very curious to get feedback on that from millennials and Gen Z. Folks. When you think about middle class, what do you think about is that a place where you want to be, is that a place you don’t want to be? So thick, that is a pretty interesting thing. And then there is, I think, also a greater conversation about wants and needs, because wants and needs in 1980 are similar, but also very different than wants and needs in the 2020s.

Unknown Speaker 5:56
And obviously, you understand what wants versus needs are wants, in terms of personal finance, I think that you literally can’t live without so those are the measures that the article and the journal were, we’re really focused on food, medicine, housing, clothing, transportation, insurance, stuff like that. Now, a lot of those are still pretty similar today. But needs have exploded, there are so many things that we spend money on today, that didn’t even exist in 1980. It is a massive list. And now I’m sure that that’s true, from 1980, to 1960. And from 1960, to 1940, so on and so forth. But that it is fascinating, when you think about in your life, things that you are spending money on that didn’t exist 20 years ago, like the internet, streaming services, delivery, Uber, you name it, it is a long, long list, our technology expenses, massive compared to what they were back in the 80s. And do we really consider those things to be wants? Or do we consider those things to be needs, all of these things have really shifted? So, so many more awesome things to be spending money on? Doesn’t make it a good thing, necessarily. And I think that that really has the effect of making us feel a lot less well off than then maybe we would, if those things did not exist. It’s all a matter of perspective. But if you are in a position where you feel like you aren’t not ahead financially, I think that that is very, very, very common, and understandable, because I think that there are a lot of people who are not doing very well financially. So why is that? It’s the proliferation of cool stuff to spend money on. It’s the proliferation of Keeping Up with the Joneses, and being able to see into the lives of so many different people. It’s new platforms that allow us to broadcast our lives and to be monetized or to put to be compensated for it. It’s the promise and the potential of becoming famous and becoming rich through those mediums. And it’s the shift of having a pension to a 401k.

Unknown Speaker 8:29
More specifically, the shift of being personally responsible for saving for my retirement and having a pension that I was compelled to contribute to.

Unknown Speaker 8:43

Unknown Speaker 8:44
although it’s been this way now, since the 80s, I think a lot of us have failed to catch up with the fact that if I am going to have money, if I’m ever going to be financially independent, if I’m ever going to

Unknown Speaker 8:59
be in the middle class, to be financially secure, to be able to step away from full time work, I need to be saving money. And so now, we have so many extra poles, so many extra

Unknown Speaker 9:14
demands on our attention and our finances that weren’t there before. And we’re needing to be putting money away in ways that maybe we didn’t use to. So I think that if you’re feeling like you’re behind, in many ways, it’s because you potentially are behind.

Unknown Speaker 9:36

Unknown Speaker 9:38
the thing about money is that there’s an opportunity cost and that there’s a time value to it. Whenever we’re making decisions about things we say yes to one thing, we’re saying no to everything else. When we say yes to buying something we’re saying No to putting money away for some financial consideration or

Unknown Speaker 10:00
Financial objective, which you obviously know, and the whole time value of money, there’s a couple of different ways to think about that. But practically speaking, I think one of the important things is, the longer we wait to begin pursuing, or financial goals and objectives, the harder they become to reach,

Unknown Speaker 10:18
which is obvious. If I’m not saving any money. If I wait till I’m 60 years old to start saving for retirement, it becomes really, really hard, if not impossible, to actually become financially independent and started early.

Unknown Speaker 10:31
But the tax of wanting the tax of spending money on wants versus needs and not understanding that and not prioritizing, and or

Unknown Speaker 10:46
what’s a right way to say this.

Unknown Speaker 10:51
If I don’t want to, if I don’t see myself, as somebody who is in the middle class,

Unknown Speaker 10:58
then I will reject the things that come along with that I will reject what it takes to be there from a financial standpoint. And the longer that I do that,

Unknown Speaker 11:12
the harder it becomes to actually become it.

Unknown Speaker 11:16
I don’t want to live with if I do not want to live within my means. I guess that’s that’s really what I’m trying to say. I think that there are a lot of people out there, that’s me too.

Unknown Speaker 11:25
I am drawn to want to have nice things. And I see everyone else having nice things. And I have the means to consume nice things. There’s another difference from the 1980s. Between it’s where we are today is the absolute, ubiquitous nature of credit, and my ability to continue to consume,

Unknown Speaker 11:52
even if it is at my detriment.

Unknown Speaker 11:55
So like most things financial, it’s emotionally driven.

Unknown Speaker 12:01
Danny Kahneman, author of Thinking Fast and Slow, famously figured out that 90% of the decisions we make around money are based on emotion. And that’s exactly what I’m talking about here.

Unknown Speaker 12:14
It’s wants needs it’s emotion over logic. It is where I see myself in the future. And I love optimism.

Unknown Speaker 12:25

Unknown Speaker 12:27
we need to also be

Unknown Speaker 12:29
taking out little insurance policies. And we’re taking out little insurance policies and doing boring stuff financially by socking a little bit away. Just in case, I do not become internet rich, just in case I don’t become the next XYZ influencer, just in case I don’t blow up on social media or whatever it might be it hedge your bets a little bit, so that I’m shooting for the stars, but worst case scenario, I will end up on the moon versus in the gutter as it would be. So I think it’s fascinating. I think I am constantly wondering about why it is that I behave the way that I do. And constantly questioning and musing on my motivations. And the reason I make financial decisions and the things that I want. And the sacrifices I’m willing to make sacrifices I don’t want to make what comes easy to me. What is hard. And I think that the more we can be thinking about these things, the more you can be considering and thinking these things, the better off that we will become. And I talk a lot about values. I talk a lot about goals. I talk a lot about purpose, I think a lot about habits. And the more we can align all those things, the happier that we’re going to be, the more optimized that we’re going to be. And that will help us to become more logical with our money. And then then interested in having you’d be a robot or some kind of a Vulcan like Spock who is only focused on logic that would be boring and bland. I want you to have champagne wishes and caviar dreams. But also put a little bit aside just in case things don’t go exactly to plan. As always, do your part and doing your best

Transcribed by https://otter.ai

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