One phenomenon of the modern economy is affluence that doesn’t feel like it. You work, earn and spend quite a lot, yet it seems you’re getting nowhere.
That opening paragraph begins the interesting article I read recently titled ‘The ‘Wealthy Poor’ replace the Middle Class’
…spending every dollar of regular income — even if it’s a high income — can leave affluent families as vulnerable to an economic shock as those who have no wealth at all. The problem comes when a major portion of net worth is tied up in illiquid assets such as homes, cars and other such items that can’t be translated easily into cash when necessary.
[As an aside, this last paragraph describes where the non-profit Common Change has been seen to work so brilliantly. Many families are living close to the line and it can just take one unexpected happening, such as a car crash, appendix operation or pregnancy to be the thing that pushes them over the line. As someone who is part of a Common Change group, that would make a perfect need to share with the group and save that person or family from crashing over the edge]
While debt-inducing expenses such as tuition and mortgage payments may be easier to justify that some others, for many people who find themselves in this situation, the solution might be as simple [and as complicated] as making different life decisions that fit more in line with the income you have. Questions like ‘Where I live’, ‘Where my children go to school’ and ‘What stores I shop at?’ might lead many people to changes they don’t particularly choose to make, but which would help alleviate the situations they find themselves in.
Would love to hear your thoughts on this? How much does decision-making and lifestyle choice have to do with contributing to the phenomenon suggested in this article?
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