The Middle Class Money Trap That’s Keeping You From Being Rich
The Middle Class Money Trap That’s Keeping You From Being Rich
Sean Fisher Wed, September 6, 2023
Navigating the labyrinth of financial decision-making can be an intimidating endeavor. The middle-class, in particular, find themselves embroiled in distinct challenges that can disrupt their journey towards wealth accumulation.
From pursuing potentially unrewarding academic endeavors to succumbing to societal pressure to live extravagantly, various money traps can pose significant setbacks to their financial progress.
High-Cost Degrees with Limited Returns
Education is often equated with brighter career prospects and a sound financial future. Yet, not all educational investments yield returns that validate the considerable debt acquired via student loans. In an era where certain degrees no longer guarantee high-paying jobs, individuals find themselves crippled by enormous student loan debts with meager incomes barely enough to cover monthly repayments.
Consider a student who pursues an art degree with a passion for painting, and incurs a student loan debt of over $100,000. Upon graduation, if the best available jobs only offer a yearly salary of around $30,000, the burden of debt can quickly become a long-lasting financial chokehold. It is therefore crucial to carefully scrutinize the potential return on investment when considering a degree.
The Financial Quagmire of New Car Loans
The allure of owning a brand-new vehicle can be irresistible, but it often represents a financial pitfall that many middle-class individuals succumb to. New cars depreciate rapidly, frequently losing up to 30% of their value in just the first year. Coupled with financing through a loan, individuals might find themselves owing more than the depreciated value of the car – a situation known as being “upside down” on the loan.
Overextending with Unaffordable Mortgages
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