To Achieve the Middle-class Dream in Today’s World, You Need to Start a Business

Earn your degree, and find a job; grow as a professional, advance your career, and earn more than you need. The surplus pays off debt, allowing you to buy a car and then a home. You can afford to start a family, travel on vacation, and eventually send the kids off to school. The dream cycle repeats itself.

With some variations, this model represents the quality of life to which many Americans aspire. You don’t have to be among the 1% to enjoy a good life. Being in the middle class gives you financial stability and the promise of a better future for yourself and your children.

In modern times, however, the challenges we face in achieving this dream are amplified by other factors. The cost of living keeps rising, and affordable housing is scarce. Rent is expensive; millennials are finding it more practical to live with their parents, even though they are already earning. Our elders might have to stay in the workforce longer if they want to have a comfortable retirement.

Is there still a reliable method to achieve financial stability in this uncertain world? And how can someone apply it to improve their financial position?

It’s simple but complicated

From a simplified overview, financial independence is all about inputs versus outputs. Whatever it costs to live must be offset by income generation. However, the details of everyone’s situation will complicate matters.

Not everyone starts with a clean financial slate. Many people already have some debt to pay off by the time they start working. Differences in educational attainment translate to differences in the quality of opportunities you get in your career. These are just a few of the factors that can limit your ability to earn more.

People also have varying habits and lifestyle preferences. Some might have a high level of discipline and can tolerate frugal living. Others might struggle with their expenses. The temptation to spend becomes hard to resist when you’re bombarded with online ads, or associate frequently with other free-spending individuals.

If you’re single, mobility allows you to pursue more opportunities and relocate if necessary. If you have a family to support, the margins are tight. Expenses rise, as you have to cover emergencies and care for seniors and children. Your time is also kept in check by the needs of your family.

Smart management might not be enough

There’s a lot of information available online regarding how to manage your finances. But due to the many complications and personal factors involved, these tips must always come with a caveat. Your mileage will vary. It can take a lot of trial and error to figure out what works.

Working on the many different facets of financial management can improve your situation. You can slowly tighten up a leaky ship and minimize unnecessary expenses. At the same time, you can explore ways to boost your revenue streams. Over the months and years, these improvements will add up.

The question remains, though: is this enough to achieve the middle-class dream? For an increasing number of people, the answer might be no. In 2019, middle-class families were less optimistic about the economy and future financial stability. The outlook can be even more negative now that the pandemic has disrupted our lives.

Start a business to break free

Business owner beside his laptop

If you’re from the middle class or lower-income brackets, simply managing your finances might result in a best-case scenario of holding your ground. It can feel as though you have to win the lottery to break free and move upwards.

For this reason, more people should consider starting a business. Although there’s a lot of risks involved, your chances of succeeding are far better than the odds of winning the lottery. Many of the factors that can help drive business success are under your control. And the potential rewards aren’t limited by the amount of time and effort that you invest.

You don’t need to use your own money to start a business. Start small, and explore different funding options. A simple idea like printing T-shirts can convince investors to fund a heat press from instagraph.com and get your business up and running.

You can even mitigate the risks of entrepreneurship by sticking with your day job. For as long as possible, develop and run the business as a side hustle. This way, if things don’t work out, you can fall back on a steady income source and try again.

Sensible financial practices are still vital to achieving a middle-class lifestyle. But the world is changing rapidly, and combining those practices with launching your own business can be the best way to reach your goals.

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