Let's Talk About Income

The median household income in America is $56,500 which means half of all households make more and the other half makes less than this amount of income each year.Everyone must start somewhere on the income ladder and then it is the responsibility of each person to climb the rungs of the ladder as best they can.

For a family of four, the U.S. government defines the poverty level at $24,257.If you had a family to support on this small income, you would definitely feel like you were living in poverty and struggling to get by.Unfortunately, approximately 43 million people live in poverty in America which is about 14% of the entire U.S. population.

Just up from the poverty level is the lowest tier of the “middle class.”Folks in this group have an income range of $18,871 and $47,177 for a family of three.To be considered solidly in the middle of the middle class, you would need an income range of between $37,666 and $113,000 and roughly 50% of the population in the country are classified as middle class.

The next level up is the upper middle class which is made up of folks making between $100,000 and $150,000 per year (14.1% of households in the country).About 6.1% of all households have incomes that exceed $200,000 per year but many people in this class don’t consider themselves to be near the top tier in the income ladder. However, it is interesting to note from 1979 to 2014 the upper middle class more than doubled in size from 12.9% of the population to 29.4%

At the top of the income ladder is the upper class (these folks make more than 99% of the population) with incomes that exceed $389,436.These people are doing fine and don’t spend a lot of effort worrying about where their next meal is coming from.

Once a person gets out of school (whether that be high school or college), it is up to each person to take what they have learned and the skills they have developed to find a job whereby an employer will pay them for showing up to work 5 days per week.

Since most people have 100% of their income coming from one source (their job), this is where most people concentrate all their efforts to get further training and higher skill sets to become more valuable to their employer so they might increase their income.However, the flip-side of this same coin is the employer also controls your income on/off switch and they can literally turn your income off at any moment in time.

To combat this major flaw, once someone lands a job and starts to earn a living wage their next major task is to learn the skill of converting this earned income from your job into passive income.The reason for this is YOU need to gain control of your income and not abdicate this responsibility to your employer.Understanding the previous sentence could make the difference between living in poverty or being able to live comfortably by having sufficient income come in the door whether you decide to continue to work or not.

Consider the fact that the majority or retired people in this country live primarily on their social security check(s) and the average social security monthly check is $1,360 or $16,320 per year.If you are retired and married and your spouse had worked and made around the same income, it would boost the annual household income to $32,640 which puts someone over the poverty threshold but just barely.

The point is, we can all do something about our incomes.If you are not happy with how much money you are pulling in, do something about it.Don’t be a victim and complain about how your boss doesn’t appreciate your hard work and won’t give you the raise you deserve.Do a good job for your employer but don’t put all your eggs in one basket when you don’t control the basket!

Since the upper middle class grew by 100% over the last thirty-five years and the middle class is shrinking because people are falling into the lower income tiers while others are rising to the next higher income class.You can choose which direction you want to go so pick where you want to be and make the time and effort to get on the path to an income level to support a comfortable lifestyle long into the future.Learning real estate investing is a great place to start.