Gen-Z Says $74,000 Per Year Is No Longer Middle Class
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Original TikTok Video From Freddie Smith:
-A $74,000 income is reduced to $4300 per month after taxes, 401k contributions, and health insurance.
-$500 Per Month is going towards student loans.
– $1400 to SPLIT a 2-bedroom apartment in a medium-sized city like Orlando, Florida – with utilities.
– $600 per month on food and groceries.
-$400 for a car payment
-$200 for insurance
-$150 for gas
-$100 for a cell phone
-$300 for fun expenses
That leaves you with just $650 left over. Is this middle class?
My Thoughts:
First: Very few people can qualify to buy a home, at 25 years old, with a $74,000 salary. Even if you’re disciplined and live frugally, it’s going to take you 3-10 years to pay off debts and / or save up an amount that would even be considered as a down payment, depending on your area.
Second: This doesn’t take into account the combined incomes of couples.
Just consider that 2021 Census data showed that “46% of people buying a home were married couples, compared to just 22 percent of single men and 30 percent of single women. That’s because lenders COMBINE the income of both people to determine how much money they’ll lend.
Third: It also REALLY depends on where you live.
For example, the median income in Newton Massachusetts is $122,000…while the median income in Flint, Michigan, is $24,900. This means that there will be a LOT of variance in terms of average income and values, and what “middle class” means for your location.
Fourth: Even a savings rate of $500 per month could lead to a SUBSTANTIAL amount of money later in life – especially if you start by age 25.
The way I see it – housing is INSANELY EXPENSIVE. To make matters worse, according to the Bureau of Labor Statistics, “you’d have to earn about $129,000 today to have the same purchasing power that a salary of $100,000 had just a decade ago.”
However, I tend to believe that the person earning $74,000 per year at 25 years old is going to have the upward mobility to eventually make $110,000 per year by the age of 33 – at which point, qualifying for the median house is going to be much more achievable – ESPECIALLY if they keep their expenses the exact same, during a time where their income is increasing.
No, it’s not going to happen as as soon as you land a job – and, life IS expensive – especially when you’re just starting out – but, I DO believe it’s entirely possible, and you will be able to buy a home after getting established in your career – if you budget for it .
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They may say that, but job salaries outside of silicone valley tell a different story. FL financial analyst salary starts at $58k, a lot of lawyers don’t make enough to justify law school. Of course the best advice to the average person is ‘don’t be average’ but easier said than done.
What are all these cars exploding in flames and being flooded 😂 omg
Those studies are completely wrong on the utilities part for Orlando it’s ridiculous high. Also life insurance should not be the answer to all this. Another thing to consider is insurance for health care and for your car
due to technology, many things in today are more affordable and abundant regardless of income except real estate. real estate has become luxury. since real estate has become scarce, a painful birth rate decline will match it.
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If you can’t afford all your bills, savings for retirement, and a dinner out now and again, it’s not middle class.
I agree, with the insane rise in prices in a lot of sectors due to inflation and the supply issues, money just doesn’t go as far as it used to.
“Your bills” is very vague. You need to just lower your bills.
@@chasemoray425 exactly.alot of people just open up their bank account to the entire world to pick at it lol
@@chasemoray425lowering bills can help but the statement is about being middle class, not survival. Middle class is having your basic needs met and having some left over.
@@chasemoray425 middle class should be able to afford a small basic house at minimum or even a condo.
I agree 74k is not middle class. When you have student loans and pay for daycare to watch your kids while you are at work.
Yeah, Daycare can be insanely expensive!
Kids are a choice
@@Kinetic754exactly if you weren’t in the financial place for them you shouldn’t have done it
@@Kinetic754A choice that must happen if we want any hope of continuing social security in the future, lol.
@@Kinetic754kids are a quintessential part of middle class life.
It only I save my $20 a week allowance when I was five years old, I would be able to enjoy the American dream.
That’s why they call it the American dream, because you have to be asleep to believe it
74k may be middle class in some areas. In mine it’s more like 130k+ to afford a home and raise a family.
that´s sick. In pretty much anywhere in Europe you are wealthy with that kind of a sallory per year. An CEO of a Smaller company make´s abount 100-170k $ per year, atlest in sweden.
Yes Americans live on other planet.
@@octopuz9999’Nope, just different than you guys. We all suffer in someway
I never thought my monthly bills for a family of four would be $18k a month. That’s just the basics. But I do drive a $1,300 luxury SUV and wife has one as well. Healthcare cost is $2100 every month. I’m self employed and make good money.
It also needs to be net lol
Middle class is kind of a meaningless metric to use because it has no strict definition.
I know a lot of people who would kill to make $74k a year. Also the expenses he use seem greatly over estimated, but even using his numbers, honestly sounds like a pretty decent life for someone in their 20s got everything covered and a decent chunk left over for saving to buy a home by the time they turn 30
I was gonna say… what else is life? you live to pay for things nowadays.. i guess the only thing would be the house. but as long as you can pay your bills thats gotta be enough right?
100 percent. This is the “I don’t have an iPhone I’m poor generation” his numbers were outrageous.
74000 is a good salary for someone single, but lord have mercy if you’re trying to provide for a family with that.
That’s where I’m at. I make $80k at 23 yrs old. I can’t imagine having kids until I can hopefully buy a home, free up my income from student loans, and progress in my career. I can’t complain that I’m fortunate for my position, but it’s not comfortable enough to start a family or use for others than myself.
Yep, I made 75k last year, and I’m the sole provider to a family of four. I live in a low cost area, but it’s still very hard to stay solvent.
@@TheSnappyogood u got ur priorities straight also make sure the person is actually someone you wanna spend ur life with if for no other reason cause it will seriously effect ur money if it goes bad
Other way around. If you live alone 74k is nothing because you have no one to split with
Umm, average household income is around $80k. Plenty of people are making it work. Comparison is the thief of joy. I blame Instagram.
I think the argument is more on “being able to afford a house” = middle class.
I’m legitimately thinking that middle class people cannot afford to buy a house any more. And, there’s just as strong an argument for “middle class SHOULDN’T aim to buy a house any more”, given the absurd prices for homes.
Just stop buying $400k houses.
Being a home owner provides security in the sense that you can’t just be evicted one day, and if you want to move, your money isn’t exactly just going into someone else’s pocket and can be used to at least partially finances for a new home. Plus, people want to be able to have an asset that gains value that they can pass on to their kids. Such is a normal desire for most humans throughout history.
That being said, I totally get what you’re talking about with the prices. I ALMOST* hope for a correction of some sort.
*Who really wants a market crash or MORE inflation.
In New England good luck finding even a small round down house for under $550k.
@@starspaceschool587 a townhouse in my area is 450-500. Can’t even afford a 1car garage townhouse. I’m projects poor with my $45k a year job.
@@gypsyislandgal1118
Maybe consider something that isn’t beachfront property.
Water, Electric, Gas, Sewer, Trash, Auto Insurance and Internet….The middle class is nearly dead. They have moved the carrot so far forward a lot of people aren’t even taking the first steps towards it.
Felt this. When you list them it’s always more than you realize.
Facts and even if you can get the home you’re going to be up against the wall with the price of electricity and property taxes here in North Texas good luck.
Really? Then who is buying all the nice New cars and Big New SUV’s?
Your forgetting cell phones and netflix subscription.
I think most people in the middle class don’t know what being poor really is. Like truly being poor. I think most just look around and wonder why they don’t have the nice things their friends or neighbors have and cry foul.
Pay off your debt people, use the extra money to get rid of your student loan debt, credit card debt, and car payment first. Then look at a house
That’s what they’re trying to do. How about the government takes less and they can pay their own bills instead of someone else’s.
@@ericeandcoThis! I make 69K in NJ and bring home about 46k after mandatory deductions and taxes.
That’s what I did. Then bought and paid a house off. It took 12 years.
Have no debt but rent is so high I cant even save for a down payment and without the 20% down the mortgage insurance kills me. I live in an area that desperately needs rent control
@@jaysonanderson7303 me as well took me 14 years
I’m not saying I disagree with you, Graham, but I believe most of the finance/investing people that are criticizing this notion are also conflating what “working class” is and what “middle class” is. For Gen X and those older, “middle class” was typically positioned as a single income family where median metrics were “comfortably” attainable (hence the connection between median and middle). At ~$75k, that just simply isn’t the case anymore.
Fair enough!
If the median income isn’t middle class then what is?
Well said Graham is out of his mind…..The Richer he has become the more out of touch he is with the common man…..I am sure the boot kissers will disagree
@@starspaceschool587 A socioeconomic construct isn’t pegged to the fluctuating nature of the variables, but the totality of the variables can fall within the subset of the construct. As an exaggerated hypothetical: If someone’s income is $150k but they have $800k of medical debt and can’t afford anything more than a studio apartment and a bus pass, then their standard of living would be so low due to crippling debt that they wouldn’t possibly be anything other than “poor.” They might have a middle class income, but they won’t have a middle class life.
To answer your question with a question: what is your personal definition of middle class? When you establish that definition, you build out from there.
I believe most people born prior to ~1985 would instinctively answer that “middle class” is the ability to safely provide for a family of four on a single income. We can go debate all day what “safely” might mean but in all likelihood that would be something in the vicinity of: a near-median house, one above median vehicle and one below median vehicle, minimal debt outside of major items like home and vehicle loans, and adequate savings to be able to weather temporary economic storms. American society may have shifted that instinctive answer with Millennials (and younger) to some degree, but that can speak more to economic expectations than anything.
Median income is a single metric and nothing more. The sad truth of the matter is that the median metrics of the US population are not within the range of what the middle class ideal was/is.
@@josha.bdoge2
“Graham make munee but mee stil poor, he must b bootliker 😡”
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No one is buying your alt coin no matter how many posts you make about it
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No
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Can you buy that on Fidelity? I’m not finding it?
nothing but a pump and dump… why take some “investment” call from a youtube comment lol come on now, don’t be foolish. @@Kobstopper
@@Kobstopper Its a spam comment.
I have a couple of GEN-Z coworkers who spend more than $25-30 a day on coffee because not only do they buy from the overpriced franchise, they have Door Dash deliver it to work. We have free coffee at work and a convenience store next door. Overspending on nonsense is a huge problem with this generation.
Agreed
and some overspending is not seen so well.. every other month the price of streaming services go up. So you look at your budget from the beginning of the year and notice your spending has gone up 15 bucks a month on TV alone… and for nothing really besides netflix wanting more profit
I’m Gen Z and to me 25-30 a day just is crazy. 5-10 alright but 25-30 is just dumb
@@crzycolchrisSpending $16/month on a subscription isn’t a problem compared to $25/day.
Also, things like burgers are now $15. Everything is annoyingly expensive.
There’s hardly much doubt that things will get worse this year. If I hadn’t been so worried about my portfolio, I wouldn’t have lost a tonne of money last year due to bad investment decisions I made. I was torn between continuing to invest and beginning to pay for a house. I decided to sell my positions, and the house required more work than I had initially thought. How much longer can I do this?
We all make mistakes, we are humans
It is vital that your portfolio have a wide range of exposures, including firms that are currently generating cash flows. I engaged a planner in 2023, and in ten months since I have made well over half a million dollars in various markets thanks to their redesign of my portfolio. If 2023 has taught us anything, it’s that happiness doesn’t endure forever. When things seem to be improving, we should put more effort into making plans for the worst-case scenario
I’m running out of strength, to be honest, I will also like to go down the route of having one. Who is this planner you work with?
‘VALERIE ELLEN CIRBO’
Thank you for the referral, I looked her up and emailed her, I hope she responds immediately