Over 120 million Americans fall into the middle-class.
The American middle class was once thought of as the backbone of the national economy and while the people who make up the middle class are still just as hardworking as ever, some of the things that we thought we’d have - like retirement, a house, a debt-free lifestyle - just aren’t there anymore.
Many middle-class Americans don’t have retirement savings.
Many aren’t living comfortably, but are actually in considerable debt.
If you’re looking to break out of the middle class, and retire comfortably, or pay for your kids’ college or anything else avoid these middle-class bad investments.
1. Not Enough In Your Savings
First, many middle-class Americans don’t have enough saved for emergencies.
Some 70% of those in the middle class don’t have $1,000 saved.
When families experience an emergency they put it on a credit card or taking out a short-term loan and end up paying interest, making an already difficult situation even more problematic.
It’s a good idea to have an emergency fund of cash to use for emergencies like this.
2. Not Investing Enough
Another type of money trap is simply not investing enough.
Would it surprise you to learn that half of all middle-income Americans have nothing invested in the stock market?
It’s a shame too because the stock market is the single best way to make money, long term.
Of course, some people are simply scared of the stock market.
More on that next...
3. No Trust In The Stock Market
Third, is that many middle-class American’s don’t trust the stock market.
When they do make the decision to invest many Americans think that investing in CDs, bonds, or their 401(k) will let them make it through retirement.
Most of these options won’t even keep up with the rate of inflation and you’ll get burned in the long run.
4. Not Thinking Long Term
Our final trap is not thinking long-term with your money.
This means buying things you don’t really need, like a car you can’t afford, or the best new gadget on the market.
Buy when you need to, and invest the rest.
The stock market is the best way to save for your kid’s college fund, to buy a house, and retire wealthy.
Keep in mind, investing and even regular budgeting properly demands a long-term way of thinking.
If you’re looking to break out of the middle class, invest, and don’t fall for these money traps.
If you want to learn more about investing mistakes to avoid so you can set yourself up for financial freedom, check out my 10 Do's and Don'ts of Successful Investing below!
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