Is Chicken Little Right?

You remember the children’s story about Chicken Little.  An acorn falls on Chicken Little’s head convincing him that the sky is falling.  As he runs around screaming that the sky is falling, he convinces his farmyard friends Henny Penny, Turkey Lurky, Ducky Lucky and the others that there is true reason for mass hysteria. 

 

            On the news these days, we hear a lot about the coming “wealth transfer,” and also that the “middle class is shrinking.”  While you may not think these matters affect you, they really do.  Because how you react to such news can affect how you conduct your life and your business endeavors.

 

Let’s begin with the wealth transfer.  It’s very true that today’s retirees make up one of the wealthiest segments of the U.S. population with more personal wealth than any previous generation.  It’s also true that the 76 million Baby Boomers and their parents will be transferring around $40.6 trillion to their heirs.

 

At the same time you will hear the cry that the middle class is shrinking (disappearing).  Which, being interpreted, tells you that the “rich are getting richer and the poor are getting poorer.” And you are convinced without a doubt that you are in the latter group! (Oh woe is me!)

 

Can you see how such thinking can affect your actions?  Notice how easily we get caught up in labels, slogans, buzz words and phrases.  We accept them, embrace them and wear them often without much thought.

 

Come along with me for a closer look!

 

First of all, who says what and who makes up the middle class?  To what is it compared?  With those living in Calcutta, India?  To Americans two decades ago?  To those in below-poverty income?  And shall we compare the “things” we own to what was owned twenty years ago?  Did every kid in the family have a cell phone twenty years ago?  Did every family have a second car?  How about a DVD player? 

 

See what I mean?  Middle class is an extremely vague term.

 

What statistics truly show is this:

 

• Fewer people today live in households with incomes between $30,000 and $100,000 (a reasonable definition of “middle class”) than in 1979.  

 

• The number of people in households that bring in more than $100,000 rose (in that same time period) from 12 percent to 24 percent.

 

• The percentage of people in households making less than $30,000 has remained static.

 

• That being the case, it means the “decline” of the middle class came from people moving up the income ladder, not the other way around.

 

• For married couples, median incomes have grown in inflation-adjusted dollars by 25% since 1979.

 

Hmmm.  Doesn’t sound like middle class shrinkage to me!  What do you think? 

 

And that’s just it.  If you want to be set free, to take back control of your own life, you will begin to think for yourself and not meander along with the herd (or panic along with Chicken Little and Turkey Lurky).

 

If indeed there is this massive wealth transfer, it can mean there are millions of people with discretionary income to spend on your products or services.  (What if you had a product to help them invest wisely?) 

 

And if you are dead set on believing that the middle class is shrinking, then believe that it is shrinking because you have determined to leave those ranks and move upward!

 

Now there’s a concept!