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    Definition of Middle Class

    • 📊 The original definition of middle class referred to wealthy merchants or factory owners in early modern Europe.
    • 🚫 Today, the term describes people who are not extremely wealthy but not poor, with a broad and practically useless definition.
    • 🤔 The middle class is often associated with a certain lifestyle, including a regular home, two cars, and a vacation once a year.
    • 📈 However, this lifestyle is unaffordable for many people, even those with high incomes, in areas with a high cost of living.
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      Problems with Assuming Middle Class Status

      • 📉 Assuming middle class status can lead to poor spending and saving patterns, with 57% of Americans unable to cover an unexpected $1,000 expense.
      • 👥 Many people identify as middle class despite being unable to afford a middle-class lifestyle, leading to financial stress and anxiety.
      • 🚨 Thinking you are middle class can make you less likely to pick the right job, with many high-paying job opportunities in trades and blue-collar work being overlooked.
      • 🤝 It can also make you more likely to take unnecessary risks, such as taking on debt or investing in scams, in an attempt to maintain a middle-class lifestyle.
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        Financial Consequences

        • 💸 People who think they are middle class may be more likely to fall for financial scams, with younger adults on above-average incomes being 330% more likely to fall for investment scams.
        • 📊 Even those who don't fall for scams may be more likely to have aggressive stock portfolios or engage in risky strategies like house flipping or cryptocurrency investing.
        • 📈 Financial anxiety can hurt you in more ways than taking dumb risks, also making you less likely to take smart risks, such as asking for a raise or starting a business.
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          Social and Economic Factors

          • 👪 The biggest predictor of financial stability is not academic ability, but the wealth of one's parents, with wealthier parents providing better opportunities and removing financial burdens.
          • 📚 Children from poorer households may need to catch up financially, taking on student loans and building their own credit, and may be over-represented in groups with high incomes but low financial security.
          • 📺 The media often portrays the middle and upper classes, creating unrealistic expectations and a sense of FOMO (fear of missing out) among those who feel they should be further ahead in life.
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