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How to Keep Emerging If You’re Emerging Affluent

The continuation of your financial success is contingent on your financial decisions. This is how to continue emerging towards affluence.

You seem to have it all. You’re happily married. Your children are healthy. You have a house and two nice cars. You and your spouse both have good jobs and prospects of increasing your incomes.

Why, then, do you always feel broke?

This contradiction is what we call, the Middle-Class Mystery. The Middle-Class Mystery is when, by all outward appearances, you and your peers are doing well financially – you’re living the dream. However, like the 47% of Americans, you’re living paycheck to paycheck.

Meet Mr. & Mr. Jones (a.k.a. Mr. & Mr. Auten-Schneider)

Despite being a well-educated, upwardly mobile couple, we experienced many of the same financial challenges of our straight peers. By the time we were in our mid-30s, we amassed $51,000 in credit card debt even with good jobs that came with decent salaries and benefits.

We were living paycheck to paycheck and always had more month left at the end of our money. Why was everything seemingly going for us but we felt financially insecure? We couldn’t make sense of it until we did a deep dive into our financial situation. By that, I mean we itemized all of our expenses for an entire year, and what we learned shocked us. We never turned down an invitation

We never turned down an invitation to dinner or happy hour, despite spending thousands of dollars on groceries a month. Our grocery bill was so high because we never used a budget or grocery list. We went on several vacations all on credit because we could rationalize that we deserved them when, in fact, we never actually earned them.

We withdrew over those 12 months several thousands of dollars from ATMs for which, to this day, we can’t account. We were without a financial plan and putting ourselves in debt trying to keep up with The Jones’. We were trying to keep up with anyone and everyone for fear that we’d be exposed as failures. Armed with this 12-month analysis, we made serious changes and turned our $51,000 deficit into a $700,000 surplus in 10 years.

Stop Keeping Up with The Jones’

The first thing we acknowledged is that our current strategy for becoming more affluent wasn’t working. Trying to keep up with both Mr. & Mrs. Jones and Mr. & Mr. Jones was a recipe for financial failure. Therefore, we quit cold turkey trying to keep up with anyone but ourselves.

We immediately stopped using our credit cards and switched to an all-cash existence. This change was hard at first, but it was the only way to stop the financial bleeding. We were fortunate enough that we didn’t have children because it would’ve been harder to ask them to give up the life to which they had become accustomed because of our mistakes.

It’s important to acknowledge that our economy is designed to keep us feeling unsatisfied. Television, the internet, social media, movies, magazines and everything else tells us that we need more of this, that and the other thing to feel happy, feel good, be liked or be like someone else. When everyone in the neighborhood is drinking this Kool-Aid, it’s hard not to take a sip.

For this reason, the best thing we did to turn our financial situation around was to decide what we most want and not what we think we should want. When we realized our most important goals, everything came into perspective, and we could manage our financial lives accordingly.

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Become an Owner

According to Student Loan Hero, “Americans owe over $1.4 trillion in student loan debt.” That’s $37,172 for every college graduate in 2016. That’s why in June 2017, the length of the average car loan reached an all-time high of 69.3 months. And, because we didn’t learn from the 2008 Housing Crisis, McMansions are back, as reverse mortgages are on the rise.

Today we’re all like J. Wellington Whimpy. We want our hamburgers today and will gladly pay for them tomorrow. Therefore, we rarely ever completely own our phones, our music, our education, our homes, our vacations, our everything. We rent everything and make an “affordable monthly payment” for it all. The problem is that a growing number of economists are becoming convinced that prosperity is contingent on our property rights. Property rights usually

Property rights usually relate to law. However, it’s logical to conclude that if we give up our property rights by financing from the cradle to the grave everything we would otherwise own, our affluence will suffer the same negative consequence as if we had no legal ownership. If everything from music to television to mortgages to education is on a small, monthly payment plan, when do we stop making payments and start amassing wealth? What do we pass on to our heirs for our family’s long-term wealth? The answer is when we decide to become owners rather than renters. Our financial situation turned around when we decided to pay off our credit card debt, pay off our cars, and buy a home rather than continue renting one. We’ve since expedited our mortgage payments. It’s because of these changes that we’re better able to take advantage of Denver’s booming housing market by watching the value of our condo increase and the stock market by watching the value of our retirement accounts increase. Those accounts are increasing exponentially more so because

If everything from music to television to mortgages to education is on a small, monthly payment plan, when do we stop making payments and start amassing wealth? What do we pass on to our heirs for our family’s long-term wealth?

The answer is when we decide to become owners rather than renters. Our financial situation turned around when we decided to pay off our credit card debt, pay off our cars, and buy a home rather than continue renting one. We’ve since expedited our mortgage payments. It’s because of these changes that we’re better able to take advantage of Denver’s booming housing market by watching the value of our condo increase and the stock market by watching the value of our retirement accounts increase. Those accounts are increasing exponentially more so because the money we used to send to our credit card companies to finance our debt now gets invested in the stock market.

Create a Financial Plan with a Financial Planner

If you don’t have a financial planner, get one. Prudential’s 2016-2017 LGBT Financial Experience Survey shows that fewer queer people use a financial planner (29%) than the general population (39%) and more queer people feel insecure about retirement than the general population. However, an HSBC study showed that individuals with a financial planner have nearly 29% more in retirement income wealth than those without one.

Granted having a financial planner won’t ensure your emerging affluence, but not having a financial plan may cost you thousands of dollars in opportunity costs over your lifetime. A 2012 CFP (Certified Financial Planners™) Board study showed that “the more extensively households plan, the better prepared they are financially in terms of their likelihood of saving, investing, and managing credit card debt.” A financial planner will look at yours and your partner’s lives in totality to ensure that you are on target to meet your short-term and long-term financial goals. They’ll ensure you have all the financial products and services you need, such as health insurance, wills, and

A financial planner will look at yours and your partner’s lives in totality to ensure that you are on target to meet your short-term and long-term financial goals. They’ll ensure you have all the financial products and services you need, such as health insurance, wills, and long-term care planning. They’ll guide you through changing your investments as your needs and circumstances change. So, the 1%-2% fee they’ll charge you for their compensation will likely give you 100% peace of mind in your quest for emerging affluence.

Ultimately, all the advice in the world does no good until you’re ready to commit to making a change. This article covered the three-point plan that helped us get back on the emerging affluence path. Our initial changes felt abrupt and hard, but as our changes gained traction and our financial lives kept exponentially improving, our lives are better today than they ever were living in debt trying to keep up with someone else’s standards.

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