There is so much talk on the loss of the middle class.  From my perspective, it sure seems that way, but not for all the reasons you might think. The “experts” aren't wrong, but the entire story may not solely be about jobs, opportunity and the economy. 

Although we have various opinions on what constitutes “middle class”, we can probably agree on these three:

  • a certain level of income
  • a demonstration of material wealth, even if leveraged
  • a substantive net worth accumulation
We have less control over the first two qualifiers, the most control over the last.  This last one is the focal point of the blog and is the key to maintaining a middle class lifestyle.

When we discipline ourselves to start early to save and save consistently in the years we earn money, we benefit from many years of accumulated, compounded savings.  By doing so, we achieve a substantive net worth, fondly referred to as independent money, which can supplement lifestyle needs, without jeopardizing middle class status. 

And how do we achieve this substantive net worth accumulation?

The start is usually with a first career, somewhere between age 21-24.  Excited to finally make our own money, we have professional and personal goals and dreams to realize.  These goals and dreams, though, can ultimately add to or detract from our ability to save, and, if saving is delayed, compromises the compounding effect of our saving. 

The start is usually with a first career, somewhere between age 21-24.  Excited to finally make our own money, we have professional and personal goals and dreams to realize.  These goals and dreams, though, can ultimately add to or detract from our ability to save, and, if saving is delayed, compromises the compounding effect of our saving.

I started later than I recommend, and so I required a slightly more aggressive savings plan.
  I delayed gratification frequently and worked with a slightly higher risk ratio than I would have wanted, but it was doable and achievable.

The important elements to keep in mind are: disciplined and constant saving, the years of compounding, the long range savings goals, and, your risk tolerance.  
Rob Carrick of the Globe and Mail says it well in this article “How Rob Carrick would invest $10,000”  http://bit.ly/1khaDu0

In your quest to save, ask yourself these questions as frequently as possible and make changes if the answers are not in line with your long range savings goals:

  • What is my overall savings status?
  • What percentage of my income am I saving annually?
  • What is my net worth to date?
  • Have I been paying myself first?
  • Am I frugal? (not am I cheap) in my decisions about spending money?
  • Am I on track to achieving my "independent money"? Ruth Davis Konigsbert writes a great article “Saying No Put Me on the Path to Financial Independence”  http://ti.me/1qluZnD 

Lastly, as a long term obsessed saver and investor, I now use http://gold.globeinvestor.com to track (not trade) my portfolio.  Some site elements are free, others you pay.  It’s functionality is a bit awkward, at first, but once data is inputted, there is a lot of useful, customized information for you. Compounding is a beautiful thing!

I'd like to hear your stories.

**Janice has a passion to share experiences and opinions for those interested in personal finance. Please note the above is a personal opinion and not based on professional  designation.