I group US citizen into 4 financial categories based on annual income:
- Poverty (~$15k)
- Median income earner (~$70k)
- Professional ($200k+)
- Business owner ($100k+)
It’s important for me to define poverty here because your understanding is different from mine and if we establish the same grammar then we can communicate better.
I realize that my breakdown of US households is basic but to achieve a lifetime of financial security each group has to live and consume in a particular manner in order to succeed.
From a more global perspective, as US citizens we have a duty to the rest of the world to live more sustainable lives. The more resources we sequester in our personal lives, the more people have to suffer in other parts of the world.
1. Poverty In The US
I am generalizing in this post. It goes without say that there are some individuals who are destitute, living in the US. However, the poverty-line in the US can still afford the kind of lifestyle that even the well-off in other countries couldn’t fathom.
Regardless, it’s incredibly tough to move up from this position and so I won’t spend any time on this because I have never lived in true poverty. I have a few other posts regarding poverty which I wrote in response to reading the book Nickel and Dimed.
2. Median Income Earner
As a median income earner you have the option of living above or below your means. In this class, you have the advantage of earning wages as early as in your 20’s which means that your savings have many more years to grow – an incredibly powerful factor.
Quite a few households become wealthy by being in this median group. But many are also mortgaged to their limit, financially depleted by their car habits, and financially stagnant due to childcare expenses.
3. The Professional
It’s not easy by any means to become a professional but the incomes are powerful. With earnings in the $200k range, it’s possible to enjoy something no other category enjoys – a high, steady, nearly guaranteed income for as long as one can sustain it.
Because of this amazing potential fortune, many professionals squander the resource, not realizing that they are nearly a decade behind the competition.
It’s a problem of not being able to run compounding math in our heads. We were taught things in slightly more linear fashion during our education – x leads to y, leads to z. However, wealth building doesn’t work that way.
The most powerful influencer of our net worth is the time spent earning a return. With a steady income, we can constantly feed the investment accounts.
Few professionals think they’ll burn out. Few believe they’ll fall ill or be devastated by the death of a loved one. Malpractice lawsuits and medical board investigations seem impossible until they happen.
4. The Business Owner
If you follow the business owner crowd and swim in the entrepreneur waters, you’ll come across a very unique group of individuals. They are as unique as engineers – a breed of their own.
For most, it was a battle worth fighting to become their own boss. They’ve had to navigate through the financial system often on their own in order to make it.
Just by playing the entrepreneur game, they got to learn everything one needs to know about finances.
They place a high value on resources and their success at being a business owner goes hand in hand with efficient money management.
US Poverty Types
In our society, there are 3 poverty types that I can describe:
- True poverty (destitute)
- US poverty
- Intentional poverty
True poverty is when you are living on the street, have no way of improving your situation due to an illness (mental, medical, addiction) and get by on scraps.
US poverty is when you get SSI, food stamps, section 8 housing, WIC, own a cell phone, a beater car, discounted cable TV, enough money to buy weed and alcohol, and can take on 2 jobs for more income if you wanted to.
Intentional poverty is when you have a lot of resources at your disposal but choose to live and plan your lifestyle on an incredibly small portion of it. I’ll focus on intentional poverty in this post.
I’ve differentiated between frugality and cheap before. A frugal person will think of a resource as a whole and attempt to minimize waste.
A cheap person places little value on resources and instead obsesses over a specific unit such as dollars or time or recyclable containers.
Intentional poverty is on the most radical spectrum of frugality. A frugal person will try to spend less than they earn and drive their car as little as possible. They will turn lights off and add extra blankets instead of burn more electricity for heat.
I have a very positive view of the world but recognize that the majority of my colleagues are busy buying homes, pumping out more fetuses, getting more pets, and planning more destinations, and using our wasteful medical system.
Nobody wants to hear it but when we choose to drive to the mountains over the weekend we are choosing to kill a few more Arabs in the middle east. When we choose to upgrade our cell phones or post complaints online about the price of such devices, we are imprisoning another child or destitute person in India or China.
Living lives of intentional poverty means a household can get rid of waste. They won’t waste their time with such ridiculous things as recycling because they won’t be buying individually packed items in the first place.
They can afford the best and greatest tabletop mixed but won’t pass up an opportunity to get a free exercise by whipping up some vegan coconut whipped cream.
The Medical Professional
When I refer to healthcare professionals I am referring to Doctors, Pharmacists, Physician Assistants, Nurse Practitioners, Podiatrists, Physical Therapists, Dietitians, and Clinical Psychologists.
As a group we earn an average income of $120k. However, it’s mostly Doctors who consider themselves to be healthcare professionals. Sadly, our lower income earning colleagues buy into the wealth gap and many don’t believe they can achieve the same wealth as doctors.
This blog is geared towards healthcare professionals, I have no idea what it’s like to live in true poverty so when I am referring to poverty and being poor, realize that I am referring to the spectrum of the healthcare provider. If you still feel like tearing me up, please do so in the comment section – bonus points for colorful language.
The Poor Medical Professional
The traits of a poor healthcare professional are that she is depriving herself of all the wonderful pleasures that one can enjoy with a $300k salary.
The poor medical professional will rely on public transportation or biking – and not with a $10k road racing bike.
Their diet involves staples and they don’t spend money on dining out or buying expensive food items. They prepare their own meals at home and pack their own lunches.
Because they are active, they can consume more carbs without having to worry about weight gain. They can spend less money on more expensive foods which are less calorie dense.
Fancy makeup, plastic surgery, hair restoration products, penile extensions, slick glasses, and acne products are not something they would pay for.
They probably aren’t living in the kind of city or hanging out in the circles where wrinkles are a signs of failure.
They wouldn’t sport their BO neither but they know that they can make their own deodorant with 3 ingredients which is far more effective than what they can buy for $3.99 per stick.
Their cell phone will be old and possibly have some tape or glue holding parts of it together. They might even go a few months without a cell phone should their antiquated brick drown in the toilet.
They have zero gadgets in the house that require batteries. And they have maybe 1 kitchen item that requires electricity.
They aren’t thinking why their home doesn’t have more outlets, they are wondering why the shit it has so many.
Living the Part of Poverty
Because they are great at playing the part of a poor doctor, they aren’t pressured into spending a lot on drinks or food when socializing with friends.
It’s understood by others that they are firm in regards to their stance on spending. They are never cheap and won’t sacrifice friends for money but they won’t be pressured, neither.
Lower Income Earning Medical Professionals
My nurse buddy is a gay Filipino dude in his early 30’s. Nicest guy and I used to love working with him overnight in the ER.
I’d roll up with my blacked out H2 Hummer, carrying my 3 course to-go meal from the Thai restaurant next door. He’d show up with his used extended cab Tacoma truck and 3 cute little packed meals.
We got to talking a few times and I learned that he had 3 rental properties in the US and was buying his first overseas. He had plenty saved up in his retirement accounts and was investing with a friend in a nursing home.
The most he ever earned in 1 year was $105k but he in comparison to all us moonlighting doctors spending $10k a month, this boy was wealthy! I just thought he was poor.