29 Ways Middle-Class Families Can Become Fully Independent

Trista September 2, 2020

If you don’t know a lot about investing, that’s okay; there are people who can help! Shutterstock

9. Start Investing

Making sound investments can be an effective way of generating passive income. The money you earn as interest and based on the company’s performance does not depend on how many hours you put in at work or how well you nailed your latest presentation.

But make sure that you remember the cardinal rule of investing. Only invest money that you are willing to lose. In other words, making investments has to be independent of your regular savings. The money that you have in savings needs to say there, in liquid form. Investments are a bonus, and any money earned from them is a bonus too. Being too risky with your investments could make you wish you were even back in the middle class.

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Talk with a financial advisor about your investment portfolio. Shutterstock

8. Build A Diverse Investment Portfolio

When people begin investing, they often have questions about whether they should invest in high-risk, high-reward funds, or low-risk, low-reward funds. The best answer is to do both. Building up a diverse investment portfolio is one of the best ways to weather the rollercoaster ride that the stock market regularly goes on and build up wealth over time.

When building up your investment portfolio, make sure that you keep your values central. If you value the environment, invest in stocks separate from companies that produce fossil fuels and genetically modified food. If you value education, invest in stocks for companies that benefit education. Doing so intelligently will put you on the path out of the middle class.

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7. Put Money Into Investments While In The Middle Class

Building up an investment portfolio that will carry you into retirement and eventually allow you to pass on wealth to your children is not something that happens overnight. It would be best if you planned to make regular investments so that you build up your portfolio over the decades.

Remember that investments are not the same as savings. A stock market downturn can cause you to lose significant amounts of money, as happened in 2008 and then again in 2020. Having liquid savings will help you weather those downturns and still be able to achieve your financial goals, like escaping the middle class.

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If you are nearing retirement, it is time to get your finances in order. Shutterstock

6. Talk With A Financial Advisor

A financial advisor can help you determine the best way to achieve your financial goals throughout your lifetime. While many people believe that a sudden windfall will change their fortunes and allow them to fulfill all of their dreams, a financial advisor can help you look at what you have available and what you can realistically expect.

Creating a financial strategy with a professional can help you make sure that you can pass on wealth to your children. While no plan is fail-safe (as many found out when the crisis of 2020 hit), having an idea that is grounded in realistic expectations and past performance generates a higher possibility of success.

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5. Create A Retirement Plan

A retirement plan is more than a retirement hope. Of course, you hope to retreat early, but many people don’t think they will ever be able to retire without some miracle. A retirement plan involves making regular investments into a retirement account, getting matching employer contributions, and making parallel plans that will produce the best possible outcome.

You may end up not being able to retire when you want to because unexpected things do happen. But a retirement plan, and meaningful steps towards making that plan become a reality, will put you ahead of the curve. Even if you did not fulfill your dreams and goals like vacating the middle class when you had hoped to, you will one day be able to.

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4. Stick With Your Goals

Saying that you are going to stop eating out so much is one thing. Getting some recipe cards and cooking meals at home for a week is a step in the right direction. But you have to keep with the program to see long-term results.

When things get hard, keep making payments towards your debts. Keep up with your regular savings plan. Keep shaving money off of your monthly expenses so that you can plan for the future. Stick with your goals so that one day, you can start seeing meaningful results and eventually escape the middle class.

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Hang out with friends who don’t mind spending time at your house instead of the restaurants.

3. Associate With People Who Have Similar Goals

Spending $5 a day on one gourmet coffee cup is an effortless thing to do when you are surrounded by people who also pay $5 a day on one gourmet coffee cup. But when you start spending time with people committed to financial freedom, so much so that they are willing to brew their own coffee at home, then making those changes and sticking with them becomes more manageable.

Look for people who have similar goals as you, and make those people part of your life. Maybe you have a sibling or relative who is also trying to reduce monthly expenditures and start planning for the future. Make those people part of your inner circle. They will provide accountability and help you get to where you want to go.

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Reaching financial goals is very fulfilling; just make a list and get started. Shutterstock

2. Keep Personal Values Central To Planning

Again, making a budget and planning your financial future to escape the middle class, at its heart, is really about values and prioritizing the most critical things in your life. If being able to get out and spend time with friends is essential to you, make that part of your financial plan. Perhaps traveling and seeing the world is important, so plan a budget that allows you to continue doing so.

If you don’t care about being able to make regular visits to Disneyland, then don’t bother making those kinds of things part of your financial planning. Stick with what is important to you, and then you are more likely to stick with the program. When you have your own plan laid out, you can begin to build towards leaving the middle class.

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1. Give Generously Even While In The Middle Class

In keeping with your values, give to charities and programs that bring you joy. Giving away part of your income is about more than being able to get a tax deduction at the end of the year; it is about using your money in a way that is particularly meaningful to you. That way, you can get more joy and fulfillment out of your financial plan.

Maybe there is a local charity that you believe in, like a nearby chapter of Big Brothers and Big Sisters of America. If you cannot commit to making regular financial gifts, look for other ways to give, such as becoming a mentor to one of the children in its program. Or maybe volunteer at your local food bank or senior center. Because remember, your finances are really about your values, so make sure that you keep the most critical things central.

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