Monday, October 11, 2010

A different middle class

Jacob, on Extreme Early Retirement, wrote about the idea of the declining middle class. He argues that it is not really a decline, but a change in priorities. Many who make enough choose to spend more then they have or live on the edge making them appear to be losing their footing with income.

There is a different take that I am beginning to see.  There seems to be a growing group of boomers who make choices early on to be independent of the system.  They save their money.
Choosing to purchase a houses and pay it off in cash, in a low property tax state, is considered smart thinking.  Food is not abused and often supplements to the food supply are grown.  Self powered transportation is more important than gasoline powered. A clothes line often hangs in the back yard. Clothing is evaluated for comfort and utility. Excess is taken to give to others who need it. Public libraries and parks are cherished.

How does this tie into Jacob?
This group of boomers are "off line". Yes, we are- mostly- solidly middle class.  We really don't have to "use" much money so we let it ride. In turn the money does not show up as income or capital gains.  It is just there, making more money.

 Huffington points to our group and says, "they are slipping away into poverty." Only by our taxes are we poor. Are there more of us out there than the "surveyors" think?  Maybe some of those people who appear to be living on social security alone have plenty in the bank. When you get your own savings out of the bank- no one charts it.
 Do people who live on savings get an earned income tax credit?

I asked Jacob if he considered himself middle class.  His answer was yes - and no.  As a fifty something looking at a thirty something - with lots of degrees- my reading of his blog indicates that he feels that he is solidly middle class and not poor.

My husband and I  see ourselves as middle class, but next year we will be "deemed" poor.  A friend of mine is a wealthy widow, but she is "poor" in the eyes of the tax man.

Are we poor or  simply a different, more frugal, more prepared middle class?

1 comment:

  1. Depends. Im one of those who will be poorer rather than middler-I live on a thousand dollar a month pension and will collect widows social security. While I think there are alot of people you describe, I think there are also alot like me. Forced to retire early, cannot find a job, and end up living of much if not all of their savings long before official retirement. I have a sister who lost her job in 2000 and has had nothing but seasonal work since then (and she has multiple degrees). All That savings would have served her well, but now has been tapped. Admittedly I made some bad financial strategies when wallowed in grief that destroyed much. We also made a conscious decision while living in Europe for ten years that we would spend what we had on travel, and even today I do not regret that. I think that many people are like myself. I think there are all kinds of us in my case I think I will be just fine.......