Learning to Manage Money

Fighting To Stay In The Middle Class and Higher Classes

I’m going to tell you a secret, that you may or may not have realized…  Suddenly the deck is stacked against you in the wealth building process, especially if you are trying to climb up to the higher income and social classes.

First I’m going to come out and identify the reasons I believe the wealth accumulation deck is now stacked against you and what you can do to stop from falling out of such a wealth range and what you can do to keep growing!

Globalization

Yep, in the short-term this one enemy #1 to your wealth accumulation process.  If you are an employee, you compete with the average hourly rate of an Asian rate of $2 or less, when the average hourly rate of US employee is around $20.  Plus the Asian workforce are hard-working, smart folks and not to be underestimated in any way.  You also have to work against labor laws in the US that seem to make employees in Asian countries (current mainly China) a much better bargain on less legal issues along.

If you are an employer or company, then if you don’t use offshore labor pools, your competitors can sell products in the US cheaper by using offshore labor.  And the larger you are the more beneficial it is to use offshore labor.  But there is a dark side effect.  When you hire technology that is offshore today, tomorrow they might be your competition.  It’s almost like paying people to learn your technology, so they can become your biggest competitors tomorrow.

So in the short-term, globalization is a catch 22 scenario for companies.

Automation and Robotics

Gone are the perception of robots being large clunky monstrosities!  In fact, in some areas of robotics, they are practically ethereal versus the heavy metal perception of yesteryear.  Oh sure, the heavy metal version still exists (mostly in auto factories), but look at your smartphones what have the name of android as the operating system.  Robotics are now consider every shape and size, and sometimes even software…  Times have changed.

In the day of the Google drive-less car, it’s just a matter of time before farms, fast food service sector, commercial airplanes and areas that I can’t even imagine consist of automated machinery, and dare I say practically self-aware robots.  If not self-aware, then highly sensitive in that they can detect many variable occurring in their environment at once and respond correspondingly.  I get chills when my mind drifts to military applications.  The looney toons Tasmanian devil has nothing on the destruction as such intelligent and fast deadly machine are capable of.

Okay, I got deeper on the robotics and automation topic than I intended.  But I think you can see the threat they serve.  Even high-end careers aren’t safe.  I can imagine a robotic doctor or nursing unit that does “on the spot diagnosis via testing” and could potentially handle over 80% of medical visits.

The end result is that we now complete against both human and machines in the labor forces.

So that begs to question what can we do?

The Thinker

1.) For the short-term, China and possible India seem like great places to invest.  The companies over their may group substantially.  That said it’s best to research this area on your own… China could be totally unpredictable and disruptive and calling the country a wildcard is an understatement.  China isn’t playing by the same set of rules that we are in the US.  Look what happened to Google when they tried to do business over there…

2.) Think outside of box and try to establish multiple streams of income and asset classes.  This only makes sense unless you have a sure thing… but what is REALLY a sure thing anymore?  So my personal take is spread your assets out so they are not all in one asset basket.  So I have stocks, bonds, real estate and hopefully a little gold (in the future).

3.)  Practice to become more self sufficient.  Learning to fix your own stuff and managing your own environment can save you a decent amount of money as I mention in this article (Fixing Your Garage Door Opener By DIY) and (How I saved $1190 dollars by purchasing my own cable modem).  The garage door fix, saved me around $500 vs having someone work on it, and the cable modem purchase was even better.

Of course learning to fix things are easy with google, just google it…  Learning, and actually growing your own garden would be a very great think to learn too.  Many of my friends do this, and a few even have fruit trees too.

My progress on my financial journey so far…

I’ve pretty much moved up from the lower income classes into a solid position in the upper middle class, but I’m not stopping there!  If I continue on the current trajectory, I should be at the fringes of the “lower” upper class wealth level within 10 years.  By “Lower Upper Class” wealth level, I consider that to be at the 95 percentile for wealth accumulation in the United States (so that would be somewhere between 1.8 to 2 million dollars).

Hope we all keep growing!

Rich

 

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