Figuring out if you’re doing better than before and moving ahead and beyond the middle class can be a bit like a puzzle. Every middle-class person wants to move up in the money world, but how do you really know when you’ve made progress? Is it decided by the car you have, the place you live, or something else? In this article, I will tell you about some little signs that show you’re not just doing okay with money but making significant progress and breaking the middle-class curse.
Escaping the Middle Class
1. Asset Diversification / Multiple Income Source
The main characteristic of any middle-class person is their dependability on their single source of income, usually from their jobs. So if you have more than 2 income sources then congratulations my friend you did it you leveled up, and you are no longer into the rat race. Those who have moved beyond the middle class often have multiple income streams.
Multiple income sources mean you have more ways to handle unexpected expenses or changes. A middle-class person will see their job as the only income source, but you’ve moved beyond that by understanding how having multiple income sources is a powerful and smart way to manage your finances.
2. Passive Income
As we discussed, Middle class means your primary source of income is a job. However, if you’ve moved into a space beyond the middle class, the major part of your earnings is no longer a 9 to 5 job. Instead, your income streams may originate from various sources, including investments, an online business, real estate, royalties, or anything that generates steady cash flow.
so your pocket is not only getting filled from job earning instead your money has diversified roots, allowing it to grow even when you’re not actively engaged in the day-to-day grind. The ability to earn money beyond the traditional job represents a significant move towards financial freedom and independence. It’s a transition from being tied to a fixed schedule to enjoying the flexibility of income that continues to flow in.
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3. Education For Children
typically middle-class families depend on public schools for their children’s education, but when you move beyond the middle-class boundary you can comfortably choose private schooling for your children, bypassing the financial challenges that are common in middle-class families.
If you surpass the middle class that means you have the ability to afford private education, including prestigious schools and colleges, without any financial tension. Unlike those in the middle class who might need to get loans or financial aid for higher education.
4. Healthcare
If you’re still in the middle class, you will usually opt for basic healthcare plans and skip various optional treatments because they can be expensive and you don’t have enough financial support to afford them. But in case you are able to afford better healthcare services that means you leveled up in your financial journey and are no longer in the middle class.
5. Vacations are Affordable
Most middle-class families never go on vacations and if they do they can only afford local places or places within the country, they reside in. Vacations for the middle class are usually budgeted and they finance their vacations with debt. If you’ve moved beyond this bracket, you can afford to take multiple breaks a year, possibly to international destinations, without worrying about the money.
6. Broder Network
Does your network mainly consist of colleagues, friends, and neighbors? If yes then you are still in the rat race. In case, you’ve moved beyond the middle class, your network is much broader and likely to include connections with influential people in your industry.
Let me tell you a secret, the people you hang out with decide whether you will become successful or not. If your friends are billionaires then most probably you will be the next billionaire or if the people you hang out with are drug addicts then you are the next. So choose who you hang out with. Start networking with successful people if you really want to level up.
7. You Own House/s
Buying a house is an all-time financial goal for any middle-class person. They spend all their lifetime earnings just to buy a house. Those who have moved beyond the middle class often own multiple properties, possibly in different locations, beyond their primary residence. They now also can make passive income by renting houses and their properties.
8. You Do Tax Planning
Middle-class individuals cry over tax deductions on their earned income. On the other hand, those beyond the middle class usually have a plan or advisor to their wealth and reduce tax liabilities.
9. You Do Charity
you’ve moved beyond the middle class, If you make significant contributions to charity, to help society. Charitable contributions from the middle class are often limited due to budget limitations.
10. Leisure Activities
Leisure activities for middle-class individuals are generally budget-friendly and local. If you often engage in high-cost hobbies or leisure activities like playing golf regularly, art collecting, or country clubs, without thinking about your budget then you may no longer be in the middle class.
11. No Debt
Debt like credit card balances, personal loans, and car loans are common among the middle class. But if you’ve moved beyond the middle class, you likely have little to no consumer debt and a robust credit score that shows your financial strength. The rich tend to be in debt for assets, real estate investments, or their business.
12. Retirement Planning
Retirement planning for the middle class is often very simple and revolves around employer-sponsored plans like 401(k)s.
What Is a 401(k) Plan?
A 401(k) plan is a retirement savings plan offered by many American employers. The employee who signs up for a 401(k) agrees to have a percentage of each paycheck paid directly into an investment account. The employer may match part or all of that contribution.
Click here for more info on 401(k)
But those beyond the middle class rarely retire; they love what they do and work in their legacy business for their whole life. Warren Buffett, at 93, has still never retired from his Chairman position at Berkshire Hathaway.
13. You Have Time Flexibility
The middle class is always bound to a 9 to 5 job and they have limited time for leisure activities and for side hustle. In case you can choose how you spend your time, whether for work, leisure, or other pursuits then congratulations you’ve moved beyond the middle class.
14. Limited Budgeting
Middle-class individuals need to make a budget for everyday expenses Daily and any kind of unexpected costs can strain. But for those who have moved beyond the middle class, budgeting for daily expenses is not a concern. They have financial peace of mind. They don’t need a personal budget because they earn so much more than they spend. Their living expenses are a small fraction of their total income.
15. If Investing Is Your Main Source Of Income
Middle-class people don’t invest or even if they invest they have very limited knowledge and few of them think of investing as gambling. But those who passed the middle-class race invest and make investing one of the main sources of their income. They know the power of compound interest.
If you start to notice these little signs in your life they indicate you’re doing well financially and motivate you to do even better. Creating more than just one source of income, being able to travel without worrying about money, and having the freedom to use your time the way you want are all signs of moving up from the middle class. Now you have the chance to help others and make an impact on the world.