Listen to this post.
It’s been a few days since I’ve had an opportunity to post here on the Internet Entrepreneur Connection but today you’re in for a treat.
That’s because today I am going to demonstrate why I believe we (here in America) are seeing the very first clear signs that the American standard of living is decreasing.
However, my intention is not to bring ‘doom and gloom’. My hope is to help you understand the urgency behind becoming an Internet Entrepreneur and establishing more than one income stream for yourself, if you haven’t already done so.
We have quite a bit to cover so let’s get started.
I Was Part Of This Statistic
If you’ve been following me for sometime than you know that I became fascinated with the economy and personal finance right out of college. This was due to the fact that I felt betrayed by the very system I had always been assured was the only way to obtain the standard of living I envisioned for my life.
After college I had no job and was more than $45,000 in the hole. When I finally did find a job 9 months later, I was severely stressed and fearful of losing of losing my job, was working early mornings, late nights and even through lunches – I was working myself to death at 23 for peanuts of a paycheck.
This led me to go into deep personal study to find an answer and figure out what went so wrong in my career.
What I discovered literally blew me away. It was for that reason that I started this blog you’re reading this article on and the very reason why I am writing de-CLASS-ified: Death of the Middle-Class and rise of the Internet Entrepreneur – my very first book that I have scheduled to release this coming April.
C’mon! This is America!
I mean, c’mon! This is America we’re talking about here! We don’t take steps backward we keep moving forward.
I know a lot of people have that mindset when it comes to the U.S as a society and as a people and I say this because I hear it all the time when I talk to friends and family.
And I share in those sentiments but the reality of what’s happening to the American standard of living for the 25%-66% of American households – the middle-class of America, is much different.
For Many, It’s Start With Student Loans
I grew up poor so I didn’t even qualify for a credit card and before college I had zero debt. That all changed after I became a college student.. Unfortunately, for many young middle-class people living in today’s age, college will be the beginning of financial ruin and a lower standard of living.
Last month I wrote about the disastrous college loan plan that the current administration was putting into effect coming 2012.
To summarize, what this plan does is ‘help college grads” making student loan payments, by setting a maximum repayment cap of 10% of their discretionary income to apply towards their student loan debt, with full debt forgiveness after 20 years.
For example, someone graduating college in 2012 with $50,000 in student loan debt and earning an income of $35,000 a year, would only be required to pay back about $1,100 per year. Well, clearly if we do the math, after 20 years, there’s still about $24,000 that are not paid for, sticking tax payer with the tab.
What this college loan plan does, in my opinion, is only incentivize college students to rack up more federal student loans because no matter how much they borrow for school, they know they’re only paying a fraction of the bill.
Someone’s Has to Pay
Unfortunately, this fraction of the bill that is not paid for by the student has to be paid by somebody. At this point the federal government has 2 choices to pay off the bill:
- In crease taxes on the middles-class
- Borrow to pay off the remaining bill, which adds to the deficit, results in money printing and therefore inflation of the U.S dollar.
You see, either way you want to paint the picture, all this college loan plan does at the end of the day is allow you to go to school so that you can get an education so that you can
- Give more of your hard-earned dollars to the government; OR
- Work more to buy less with your money
By that way, at this point you (and the rest of the middle-class) is also paying for every other college grad who was granted student loan debt forgiveness with and did not pay his bill in full.
And Here Is Where I See It…
In may 2011, the New York Times reported that the median starting salary for a college grad was about $27,000 and that 24% of recent college grads we underemployed or unemployed all together.
Those are horrific number anyway you want to cut them.
The College Parents of America organization recently announced that as much as 65% of recent college grads returned home to live with their parents after college – these grads are referred to as ‘Boomerang kids’.
What does this show us?
This tells me that these students clearly cannot afford to go live off on their own; they cannot afford rent or mortgage costs, cannot afford food or energy expenses, and cannot afford vehicle or transportation cost, without the help of family members to make ends meet.
This is one of the very first signs that we can clearly see of a decreasing American standard of living.
Middle-Class, Listen up!
Today, it’s getting harder and harder to survive off of 2 incomes, much less surviving off of 1. Unfortunately, I don’t see it getting better.
It used to be that you could go to school, make good grades and find a safe secure job. I say the new paradigm is learn new skills, become an Internet Entrepreneur and ensure your way of life.
Are you seeing a decrease in your standard of living? Did it start with student debt for you or is it a result of other factors?