Shouldn’t higher income and greater net worth lead to a life of greater flexibility and individuality? Logic would seem to suggest as much. More commonly however, as people make the transition from middle/working class to the upper middle class, the addiction to conformity seems to grow ever larger, ever more influential. This is perhaps never more true than with the upper middle class.
That has tangible costs. The financial costs should be obvious, but there are personal costs as well, and those can be even higher.
The Middle Class is All About Conformity
As people work their way into the middle class, conformity seems to be something of a benefit. It’s about accepting – perhaps on blind faith – that conforming to society’s norms will provide the quickest and surest path into the middle.
For example, people widely consider education to be a sure path to the middle class. Homeownership is also foundational. It naturally follows that you would want to purchase a house in an area that has good schools, so that your children can receive a similar good education.
Along the way, the middle class is bound by rules, real and imagined. And since those rules are often both ambiguous and unofficial, people commonly take their behavioral cues from those around them. If the majority of people in the middle class are getting a college education and buying houses in the suburbs, those will become prevailing goals.
It’s understandable that adherence to unofficial rules – which is really conformity at the core – drives people in the middle of the economic ladder. It’s putting the credo when in Rome, do as the Romans do into actual practice. After all, how could so many millions of people be wrong?
But what happens as your financial situation improves? Do you shake off the chains of conformity? Or do you develop an even stronger orientation toward conformity?
Strangely, many in the upper middle class become even more conformist. The evidence is all around, even if there is scant evidence to somehow “prove” that it’s happening.
Shouldn’t Increased Wealth Translate Into More Self-Direction?
It often seems that people who move up the financial ladder in life follow the same strategies and patterns of the middle, except that it’s simply done to an even greater degree. For example, the house in the suburbs turns into a McMansion. The state college education they received translates into a private university education for their children.
More serious is the continued – and often accelerated – desire to emulate the herd. That plays out in the form of moving into subdivisions with hundreds of essentially similar homes. The extra wealth in people’s lives is “invested” in keeping up with an imaginary social orbit. It’s as if to say that “trading up to a subdivision with larger houses is what you do when you become more prosperous”.
Is it really? Is that what you do when you have more money?
Maybe it’s just my own personal preference, but it seems that one of the major benefits of greater prosperity would be moving away from the herd.
It’s not an anti-social desire either – in fact, it’s quite the opposite. The move into the upper end of the middle is often an unspoken choice to surround yourself with even greater insulation from those who are not “members of the club”. That is, from people who are not of the same socioeconomic background. There’s even a perverse assumption that merely associating with people of a lower financial status could reverse the gains you’ve made.
Is there ever the consideration of living a life that’s truly different? Is there ever a desire to escape the tentacles of suburbia, and the suburban “arms race” of who can accumulate the most and the best toys? Are a bigger house, a luxury car and more expensive toys the reward for greater prosperity?
McMansion subdivisions are a standing testimony that answers those questions. It’s conformity at a higher level, but it’s still conformity.
The Ultimate Manifestation of the Upper Middle Class Addiction to Conformity
This is found in the upper middle class desire to live in HOA neighborhoods. No matter what the popular common interpretation of it might be, at its root it’s a legal arrangement in which one largely signs one’s homeownership sovereignty over to a governing body known as a homeowner’s association board. The supreme job of the board is to enforce conformity throughout the neighborhood, in the name of preserving and advancing property values.
Here’s the problem with that cherished institution: it makes being a nonconformist problematic. It’s actually the perfect arrangement for the conformist-minded, which is why such neighborhoods are so popular among the upper middle class. You live in a house that looks substantially identical to almost every other house in the neighborhood, and significant variations are not permitted. And since most people in HOA neighborhoods are employed somewhere in the white collar corporate and government complex, there’s relatively little occupational variation from your neighbors.
This increases the chances that your neighbors will largely look like you, have similar socioeconomic backgrounds, do similar work for a living, and even pursue similar hobbies (swimming, tennis, golf, etc.). We can also presume that people so oriented toward collective behavior largely plan to retire to similar neighborhoods, except that they’ll be located in areas with warm weather, beaches and palm trees. Such is life when you’re following the herd.
But what if you aren’t? To the degree that your race/ethnicity, socioeconomic background, occupation and lifestyle depart from the conformist norm, you may find life in an HOA neighborhood uncomfortable.
But if you’re addicted to conformity, you won’t even question the arrangement. You will revel in its benefits (rising property values and being surrounded by people who are basically like you) and ignore the loss of sovereignty and self-expression, both in your life and in your home.
This has become common among the upper middle class, many of whom aspire to that kind of existence.
The Tyranny of Groupthink
The consumption patterns and housing choices of the upper middle class are largely the product of groupthink. It’s about watching the herd, then moving in lockstep. You don’t buy a luxury import because you necessarily want to, but because six out of 10 households on your street have done just that. You don’t buy a vacation home because you necessarily want one, but because three out of 10 people on your street bought one.
The lifestyle choices and patterns of the group – in this case the neighborhood – dictate what you do. Your reaction to it is almost a default.
I’ve lived in upper middle-class areas most of my life, and I’ve seen the results of the suburban arms race. A prominent example is buying a brand new car for a recently licensed teenager.
We’re talking about a 16 or 17 year old who has little experience behind the wheel. But mom and dad nonetheless furnish Junior with a brand-new car. I’m not exaggerating – I’ve seen teenage kids pull into the parking lots of local high schools driving Mercedes, BMWs, and monster trucks. All brand spanking new.
I can’t believe that a sane parent would do this. For starters, the teenager needs a well-used car to cut their teeth on. There will be accidents; do you want those to happen in a $50,000 car or a $5,000 car?
Logic dictates that it should be the latter. But something else is at play. Once again, if five of your 10 neighbors buy brand new cars for their teens, you’ll feel pressured to do the same. It’s what you do when the group is calling the shots. And that seems even more pronounced among the upper middle class than it is in the middle class.
Also, we haven’t even gotten into the moral hazard of giving a brand new car to a teenager. But that takes the conversation in a whole new direction, doesn’t it?
Conformity is an Expensive Way to Live
The deeper that you move into upper middle class conformity, the more powerful the trap. It often becomes difficult to keep up with, and in that way it can actually lead to a decline in prosperity.
No matter how high your income or your assets are, desires are unlimited and can easily overwhelm financial resources. It can and does happen with the lower- and middle-classes, but it seems utterly illogical when it happens to the well-off.
As the expenses of conformity outstrip income, debt beckons. There’s actually a connection between high income and high debt. Not only is credit more readily available to the well-to-do, but there’s often a sense of invincibility that can drive someone into a never-ending debt cycle. This can happen more easily than most people think. The lifestyle can eventually become more important than the resources that created it.
During the financial meltdown of a few years ago, McMansions were well-represented in the ranks of foreclosed properties. What made it worse was the widespread use of alternative mortgages. No income verification mortgages, interest only loans, low rate adjustable rate mortgages and subprime mortgages enabled people to buy more house than they could afford. The end result was inevitable.
But there’s another area of debt that’s festering right now, even and often especially among the upper middle class. It’s the student loan debt time bomb.
If you live the upper middle class lifestyle, the accepted wisdom is that your children must go to the best schools so that they too can move into the upper middle class – it’s how you do things. The social pressure to get that gold-plated education is suffocating. And so are the financial costs.
Let’s say you have a household income of $200,000, which is good money almost anywhere. If you have two children, each of whom will attend a private college for at least four years at a cost of $200,000, you’ll have to find a way to come up with $400,000 to pay for it.
That’s a lot of money to come up with even at such a high income. Even if you’re able to come up with half of it, through 529 savings plans, borrowing against home equity or other savings, $200,000 would still need to be covered with debt. That’s $100,000 in student loan debt per child. And probably you’ll cosign for both children, giving you a secondary liability.
The point is, the upper middle class will often technically bankrupt themselves to pay for college for their kids.
Think of All the Freedom You Could Buy by Not Conforming…
Let’s take a radical turn here and dare to consider that conforming is not in your best interests. Rather than drinking the Kool Aid and buying into the TV version of the upper middle lifestyle, you choose to live beneath your means. Not just a little bit, but way beneath your means. As an upper middle class income earner, you’re in a better position to do that than the average person.
If you make $200,000, can you live comfortably on half of that? You certainly can. We know that you can because you probably weren’t earning anything close to that earlier in your life.
Assuming that your after-tax income is $150,000, you could choose to live on $75,000. That would buy you a comfortable middle class life in most areas.
But it’s what you could do with the other $75,000 that would make all the difference:
- If you invest $75,000 per year for 10 years at, say, 5%, you’d have nearly $1 million saved – $970,515.89 to be exact.
- If you invest the same amount for 15 years, you’d have $1,670,558.
- Continuing the same savings/investment pattern, after 20 years you’d have $2,568,963.
- If in 20 years you were to begin living off your savings at the safe withdrawal rate of 4% you’d have $102,759 per year to live on. That’s more money than you’d be living on now.
Do you see where I’m going with this? Everyone talks about early retirement, but upper middle class income earners have a better-than-even chance of making it happen.
It comes down to giving up on the conformity addiction, with it’s senseless pursuit of eternal consumption, and focusing instead on long-term goals. It’s about using your financial resources to favor investment over consumption for the future of your dreams.
True financial freedom waits at the end of that strategy. Eternal financial bondage waits at the end of conforming to “living the life”.
Shouldn’t Increased Wealth Free You to NOT Conform?
The lower class and the middle/working class have fewer financial options. There really is something of a minimum cost of living, even if the exact amount is different for everyone. But lower- and middle-income often put you in a position in which your finances, and by extension, your life, are dictated largely by others.
The higher your income is, the more financial freedom you should have. That won’t come if you’re bound by the upper middle class addiction to conformity.
Conformity is expensive. Worse, it denies you the chance to find your real self, and to become the person you were meant to be. The conventional upper middle class lifestyle can be hypnotic. Since so many people in it are living well, it can blind you to the reality that many are simply going through the motions of life. They live a life of “must-dos” and “must not-dos”.
If having greater financial resources doesn’t free you from that trap, then what it it’s true purpose? Why even pursue it?
Greater financial resources should give you the ability to create a life of your choosing. If you’d prefer to live in a flat downtown, rather than in a McMansion, then that’s what you should be able to do. If you want to pull back on your career at some point and make music or create art, that should be a goal – not retiring to the beaches-and-palm trees equivalent of the HOA neighborhood you’re living in now.
Give this some deep thought. It takes courage and thinking outside-the-box. If you’ve been blessed to be upper middle class, you’re in a better position to live a life of choice than the average person. Are you taking advantage of it? Or are you conforming to the herd?