Want to Retire Early? Ditch the Middle-Class Mindset…

MansionMeet the Johnsons, a family of five recently profiled by The Washington Post. The Johnsons live in Culpepper, Va., and bring in $90,000 per year — a full 55% above the median household income for the town. Based on this alone, you might think mom and dad are prime candidates to retire early.

Then again, the family has to pay the bills. All three daughters have a computer in their room, the family shares a laptop and three iPads, satellite TV is available on three flat-screens throughout the house, and all family members except the youngest have a cellphone.

Their savings for college: $0. Their retirement savings: “meager.” When asked what more they’d need to feel financially secure, Mrs. Johnson says: $150,000 a year. If we had an extra $60,000 a year, we’d have some breathing room. I’d like to have some extra things. Not just look at them and drool.

SOURCE:  Want to Retire Early? Ditch the Middle-Class Mindset.

I’m afraid the above mentality is more prevalent in this country than many want to admit. I am also sure that many in that mode will sometime in the future go the way of others in losing their middle class status to “right-sizing” and they will be totally unprepared for that happening. For the most part we are being true to the capitalistic mentality of spending more and more as each year progresses. Where a 1500 square foot home was enough in the past, now we need at least 3,000 square feet. And we need it sooner rather than later.  We simply can’t spend frugally now in order to save up enough for a 20% down payment. We want now what our parents and grand-parents took years of savings to acquire. It seems if you are in your middle to late twenties you think you must have the house of your dreams.

The mentality of “wanting it now” will eventually be our downfall if it is not corrected. We expect to buy everything at the lowest possible costs. To do that companies must seek the lowest expenses and that certainly includes building our factories  and as many other facilities as they can in third world countries. We demand our government to give us the services we expect with little or even preferable none of our tax dollars. To live within this framework means dismantling our safety nets that protect us. It also mandates that we watch our infrastructure crumble away for lack of funding to maintain it.

Wants vs. Needs that is the difference between living simply and living lavishly. Too many of us like the folks above are in the “here and now” lavish mentality and therefore not thinking or saving for tomorrow. It doesn’t seem to matter if like the Johnsons we make 55% more than most we think we need more and more in order to “not just look at them and drool”.

We seem to be a country that wants it all but is not willing to pay the price for our wants. If we can get it on credit now instead of saving for it that is the way to go…