What is the middle class trap? How does it relate to an average mindset, and why is that problematic?
The middle class trap is the idea that pursuing the dream of being “middle class” actually means you’d be trapped in a struggle when you should aim higher. In terms of The 10X Rule, it is like an average mindset in which you don’t aim for better and end up stuck at mediocre.
Keep reading to better understand the middle class trap and how it exemplifies the problematic, average mindset.
The Middle Class Trap
(Shortform note: In the rest of this summary, we’ve combined chapters and reordered material to reduce repetition and improve coherence.)
In the ‘50s and ‘60s, Americans were sold a middle class dream—the idea that a life of relative comfort and security was attainable by most people and everyone should strive for it. Many people still strive for much of their lives to become what they think of as middle class. But the dream was actually the middle class trap.
However, middle-class status means something different today than it meant 50 years ago. A middle-class income no longer guarantees comfort—in fact, because it promotes “average” thinking, it leads to failure and financial insecurity.
The Evolution of the Middle Class Trap
Most people think of a comfortable middle-class lifestyle as one with a reliable income, health care coverage, an affordable home in a nice neighborhood, vacation time, and a retirement fund. But today, living on a middle income in an urban area would be difficult and far from financially secure. Even upper-middle-class status could be tenuous during an economic downturn.
The middle class is generally defined as those with reasonable disposable income (about 30% of their income left after taxes and basic expenses). But few in today’s middle class have 30% left after expenses.
Many middle-class people feel more like members of the working class. Someone who’s making $60,000 a year pays $15,000 in taxes, leaving $45,000 (which equates to $32,000 due to inflation) for a home, food, schools, insurance, medical expenses, car payments, vacations, savings, and emergencies.
Further, they’re caught in an increasing middle class squeeze, in which their wages don’t keep up with inflation, resulting in a decline in real wages over time. Also, middle-class wealth calculations often include debt and home equity.
Besides declining real wages, the middle class has other problems:
- Many manufacturing and customer service jobs have been moved overseas.
- Higher education and health care costs have skyrocketed.
- More people are outliving their retirement savings.
- More people are dependent on credit.
In other words, a middle-class income is unlikely to provide what used to be considered middle-class security. Pursuing this average income is the middle class trap.
(Shortform Note: While the 2008 U.S. Census figures quoted in this book are out of date in defining middle-class income as $35,000 to $50,000 a year, the author’s basic points still apply. More recent figures list the 2017 median household income as $61,372.5; middle income is between $40,500 and $122,000.)
The Average Mindset
“Middle” means average—and the concept of living a middle-class life encourages average thinking, being comfortable enough and doing enough to get by rather than having big dreams. The middle class trap is like the trap of an average mindset.
The main problem with average thinking is that it assumes things will always be normal and run smoothly. An average approach can’t withstand adversity, which can occur in any or all areas of life, including finances, career, marriage, and health.
Many businesses fail for the same reason—owners put in an average or normal amount of effort based on things operating smoothly. When they plan for contingencies, it’s for typical problems, not something extraordinary. When average efforts fall short, many new business owners and partners have second thoughts and give up.
The only way to prepare for and overcome adversity is to think and act at 10X levels—when you apply extraordinary effort, you achieve results so big they can’t be undone by problems and setbacks
Reject average thinking in every aspect of your life, including advice from people close to you if they encourage limited thinking. Average thinking won’t get you an extraordinary life—and increasingly, it’s unlikely to sustain a middle-class life either.
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- How to set goals that are 10 times bigger than average
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- The 3 myths that will sabotage your chances of success if you let them