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Why We Like to Think of Ourselves as Upper Middle Class – Presented by Mark K. Lund, Utah Financial Advisor

Financial Advisor UtahThere’s no question that being perceived as poor is something to be avoided in our society. People are willing to spend more than they can afford on designer clothes, the latest phone, and a nice car to create the appearance of doing well.

Not only does a below-average income put financial stress on an individual, but they must also bear the social stigma. People assume that if you’re not making as much as someone else, you must not be working as hard as you can.

On the other hand, we don’t want to be seen as too wealthy.

Rachel Sherman, an associate professor of sociology at the New School and the author of “Uneasy Street: The Anxieties of Affluence,” interviewed fifty of New York’s wealthy. These were people who had tens of millions in net worth and made hundreds of thousands per year in income.

Yet, despite the inarguable metrics that put them in the top 1%, none of them liked to think of themselves as being rich.

Sherman describes how she used the word “affluent” when contacting one of her interviewees. This woman with a $2.5 million household income, a house in the Hamptons and a child in private school, felt that the term didn’t apply to her.

Real affluence,” she said, “belonged to her friends who traveled on a private plane.”1

On the other hand, when it comes to comparing our financial status with others, there’s what psychologists term the above-average-effect. Whether it’s estimating IQ, health, memory, relationships and even happiness, people consistently rate themselves as better than others. For example, 93 percent of people think their driving abilities are better than average—a statistical impossibility.2

This urge to be seen as above average but not rich, causes many people to describe themselves as upper middle class. In fact, when comparing themselves to others it’s the preferred term to use.3

However, comparisons of financial status are often meaningless. You may make twice the average income yet live in an area where living expenses are so high, you always feel strapped. Another reason to avoid indulging in these kinds of comparisons is that it can lead to unhealthy spending in an effort to keep up with the Joneses. And even worse, make you ungrateful for what you do have.

The financially prudent person knows that if you can avoid buying things just to appear better off, and you can stick to your retirement saving plan, then you really will be doing better than average.

If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.

Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc.
11576 S State Street, Bldg. 1002
Draper, UT 84020

Sources:
1. http://go.pardot.com/e/91522/at-the-rich-wont-tell-you-html/93dhz4/1977361764?h=-lhffGqNhL1FYrUeE4qGF39jdVyFu8RfV28F8fNnI1g
2. http://go.pardot.com/e/91522/23-01-above-average-effect-php/93dhz7/1977361764?h=-lhffGqNhL1FYrUeE4qGF39jdVyFu8RfV28F8fNnI1g
3. http://go.pardot.com/e/91522/ont-think-they-are-rich-2019-8/93dhzb/1977361764?h=-lhffGqNhL1FYrUeE4qGF39jdVyFu8RfV28F8fNnI1g

Disclosure:
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by Efficient Advisors, LLC (“EA’) for Mark Lund, Mark is a Financial Advisor in Utah. He is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment management and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Effective Investor Newsletter. Cities served in Utah are: Salt Lake City, Salt Lake County, Utah County, Park City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, American Fork City. The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.

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