How to help the middle class "return to poverty"?
Dingjiaoone original
Author | Tang Yahua
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There is a saying circulating on the Internet, "nearly 10 million mortgages, spouses do not go to work, and two children go to international schools", which is a three-piece set of middle-class "returning to poverty" in this era, and some people also call the middle-class "death" three-piece set.
Why is there such a statement? Probably because, in the past two years, the middle-class income has been extremely unstable, and if you have a high mortgage, household consumption is extremely high, and there is no other source of income, "returning to poverty" is indeed not a distant thing.
Regarding the criteria for middle-class families, there are different theories. Some people say that the annual household income is 400,000-800,000 yuan, and the net worth is between 4 million and 8 million, and some people think that this is only the standard of first-tier cities, and in a larger range, the annual income of 200,000 can be regarded as the middle class.
In recent years, many middle-class families are facing crisis or falling into trouble. As for the specific reasons, sudden layoffs or illnesses leading to unemployment, large-scale losses in investment and financial management, and entrepreneurial failure are the most common.
After encountering problems, most people find that their family's consumption is so high. Tens of thousands of mortgages every month, high tuition fees for children and extracurricular training fees, home insurance, family travel, hostesses' luxury goods, skin care products, a total of hundreds of thousands or even millions of dollars a year.
Once the income is broken, this tightly linked chain cannot run. The panicked middle class began to cut unnecessary consumption, while downgrading consumption and living a life of budget-wise.
To sum up, there are several culprits for the middle class returning to poverty: middle-aged unemployment and no other source of income, leveraged to buy a house, unreasonable asset allocation, consumption habits beyond economic ability, neglect of health, etc.
This group seems glamorous, but in fact fragile, income mainly comes from wages, little "money makes money" capital ability, through the rise of dividends in some industries, living a life of leveraged and high consumption, with the change of the situation, it is easy to follow the disappearance of dividends.
Through the personal experience of some people, perhaps we can discuss how to save the middle class when it encounters a crisis?
The middle class who stepped on the three-piece set of "returning to poverty"
What brings down a middle-class family is sometimes just unemployment caused by a serious illness.
Feiyu, a 44-year-old living in Beijing, has not been to work in the past two years, and her husband is in the construction industry. Their family's income after tax is about 700,000 yuan a year, and they can save more than 200,000 yuan, and the rest is basically used for consumption.
In the early years, they changed houses several times, and thanks to the dividends of the times, the Feiyu family achieved a real estate value of more than 10 million. The first Feiyu family lived in a small three-bedroom house divided by their father's unit. In 2008, in order to send its children to school, Feiyu sold the house for more than 2 million yuan and bought a two-bedroom apartment in Xicheng District for 3.65 million yuan. Two years later, the house became a school district house, and the price later reached 12 million. When the child graduated from junior high school, considering that the school district house was temporarily unavailable and the living environment was not ideal, Feiyu chose to change rooms again.
The school district house was finally sold for 9 million yuan, and the new house was bought in Daxing District, with a total area of more than 300 square meters upstairs and downstairs, about 10 million yuan landed, and a loan of 1 million. Feiyu has put a lot of effort into this house, and spent another 1 million yuan on decoration, intending to let his parents, parents, parents-in-law and mother-in-law live here in the future.
Because the income situation was acceptable, at the end of last year, Feiyu and her husband discussed paying off the mortgage in advance, and left hundreds of thousands of yuan in cash after some operations.
If everything goes according to plan, there is no problem, but this year, Feiyu's husband suddenly found out that the heart failure level three, and the pillar of the family suddenly could not contribute income.
"Everything was too sudden, I didn't have time to think, my husband was sick, my child was in high school, and I suddenly had to support this family on my own." She said, "It's been two years since I left the workplace, and I mainly rely on my husband's income alone, and now it has suddenly become zero income, and the pressure comes instantly." My husband was hospitalized during the heavy rain in Beijing, and I was under more psychological pressure, and I had to go to the hospital every day to take care of my husband, and I had to take care of my daughter when I went home. ”
Unemployment due to the decline of the industry is also a major reason for the "return to poverty" of the middle class.
Netizen Xiaomei shared that her husband used to work as an executive in a real estate company, and she used to work in an Internet company. After marriage, her husband earned millions a year, and Xiaomei changed to a relatively easy and stable job. With several upside downs, Xiaomeijia has two apartments in Beijing, one for commercial and residential use, one for ordinary residences, and millions of mortgages. It may be that the first ten years were too smooth, and Xiaomeijia was also accustomed to leveraging to buy houses and consume.
"In recent years, I have been a little floating, spending more than 10,000 a month on skin care products and luxury goods, and children's things are always the best, and when it comes to the festival, I have to buy bags and jewelry." At the end of 2019, we paid a deposit for a small semi-detached villa in Shunyi, planning that our children would go to international schools in the future, and we thought that life would get better and better. She shared.
Unexpectedly, in 2022, the real estate industry will have a big crisis. Xiaomei's husband is unemployed and has not yet found a job, and it is even more difficult to go to a new industry with no experience and an age bottleneck.
Coupled with the collapse of the stocks held by Xiaomeijia in recent years, hundreds of thousands of yuan are set in the stock market, there is no income, and the deposit has plummeted, Xiaomei and her husband are very uneasy. Fortunately, they returned the small double villa in time, took back a sum of money, and blocked part of the leverage hole.
Subsequently, Xiaomeijia quit her childcare sister-in-law and her husband took the baby full-time. During this period, Xiaomei's husband was particularly stressed, often upset and insomnia, "I originally proposed to sell the house and go back to my hometown if it didn't work, but my husband felt that if this happened, ten years would be in vain, and I was very unwilling, and in the future, my children would have to repeat our path to first-tier cities." Considering the educational resources of first-tier cities and the future vision of our children, we still plan to stay in Beijing. He once wanted to wait for me to go out to run Didi after work, but I refused, worried that there would be many people who were drunk at night, and he had a strong temper and something would happen. ”
Entrepreneurial failure "returning to poverty" is another type of middle-class status.
A netizen shared his family's situation, before the age of 30 in Guangzhou to open a garment factory to earn the first pot of gold, later switched to catering, the past two years business is not good, the loss of more than 1 million, the family mortgage, children's extracurricular interest classes, living expenses add up to tens of thousands a month, in desperation, their family chose to move back to Changsha to live.
Because of investment and financial management, there are not a few middle class who lose a large amount of money.
The chestnut "return to poverty" mainly stepped on the thunder is investment. "First, stock investment has been leveraged, and stock speculation has lost a lot of money; The second is to buy two sets of investment houses, but the results are all rotten, and there is a set of shops, after the end of the last lease period, no new tenants have been found, and the sense of crisis is very heavy. ”
Many middle-class people who have been walking on the road to rise have fallen into confusion overnight.
After "returning to poverty", the middle class began to downgrade consumption
Many people say that the so-called middle-class trap is that some people have an income, and they are unconsciously brainwashed into thinking that they should do something and buy something to be worthy of their identity, so they spend wildly, drive luxury cars, buy luxury goods, roll education, and buy houses with high mortgages.
Feiyu's consumption philosophy has always been that money is earned, not saved, and the consumption at home remains high. Her daughter attends a private high school, with tuition of 150,000 yuan a year; There are two cars at home, one worth 500,000 and the other 150,000, and the insurance + daily expenses of a year's car are 30,000 or 40,000; The insurance expenses of the whole family are nearly 50,000 yuan per year. In terms of daily expenses, the family living expenses should be at least five or six thousand yuan a month; The cost of skin care and maintenance of flying fish is about 50,000 yuan a year; Family tourism summer vacation is basically going abroad, other holidays in China, 15,000 yuan per capita abroad, 5,000 yuan per capita in China. Overall, the annual household expenditure is 4.5 million.
Under the change of the situation, Feiyu began to downgrade consumption, first of all, tourism, not only do not travel abroad, but also do not go to domestic travel. There are also daily expenses, I used to go to restaurants to eat, eat buffet and so on, and now I eat at home most of the time. "My daily expenses, clothes, bags, skin care products, unnecessary do not buy, consumables do not stock up first, just enough."
"Now is not the time to be vulnerable, I need to support our family. I am slowly not so anxious, my child's third year of high school tuition is not much, and then the family mainly depends on me, work hard to make money, open source and throttle. Exocet said.
Sister Jia in Shanghai is a more superior category of the middle class, with an annual household income of more than 3 million yuan and a total annual expenditure of about 1.5 million yuan. There are two main reasons for her consumption downgrade, one is that she is in her 40s and works as a management in an Internet company, but in recent years, there have been many layoffs in the Internet industry, and she has a strong sense of crisis, if she is laid off and then look for a job, it is difficult to get the current income, and the prospects for future income are not optimistic; The other is Jiajie's father's advanced cancer, which costs about 50,000 yuan a month.
Source / Visual China
The personal experience of friends around her also gave Sister Jia a lot of warnings. "There are people around me who are aware of these risks relatively early, and there is a friend who works in private equity, whose family expenses have dropped significantly in recent years, both sons have transferred from international schools to public schools, drivers have been fired, and the car that was used to pick up and drop off children has been sold. I also have a female friend who has been unemployed for more than a year, and now has a monthly mortgage of 20,000, and is still paying off his savings for the time being, and his life is very stressful, and he is also actively looking for opportunities. ”
Since last year, Jiajie decided to live a middle-class life with downgraded consumption. First of all, luxury goods are not bought, bags, clothes, watches have not been bought new for a long time; Secondly, the skin care products are downgraded, and they are not allowed to chop their hands to shop. In the past, she had a bad habit of hoarding goods, but now she has set up a flag for herself, and she is not allowed to buy it endlessly. In terms of lifestyle, entertainment, dinners, and dinners have decreased a lot; The frequency of fitness personal training classes was reduced, and daily exercise was changed to running by yourself; Coffee Starbucks basically quit, in the home automatic coffee machine, buy a large package of coffee beans to get it yourself; There is also travel, and overseas travel has not resumed after being interrupted in recent years.
Chestnut, who "returned to poverty" due to investment failure, frankly said that he used to spend as much as he wanted, and did not make statistics on how much he spent every year, and now he mainly cut luxury goods and overseas travel, and sold a Porsche.
Xiaoyu's husband lost millions in futures speculation, and now he regrets it, and Xiaoyu's family has to downgrade consumption. "The biggest part of my personal expenditure cut is to no longer buy luxury goods and more expensive clothes, and my consumption philosophy has always been to not humiliate myself and buy when I want. Looking back, I feel that I was too vulgar before, most of the money spent on appearance is unnecessary, too wasteful, and investing in the spiritual world can be more satisfied. ”
Basically, whether it is a complete "return to poverty" or a middle class with financial crisis, they are desperately trying to downgrade consumption. Cutting some flashy consumption, leaving only the most basic expenses, and keeping the few cash is the consensus of most middle-class.
How to help the middle class "return to poverty"?
The middle-class group that has risen in the past decade has a lot in common.
Internet analyst Ge Jia mentioned that they have relatively distinct industrial characteristics, and in the past economic development process, some industries developed relatively well, and a group of relatively high income groups appeared, such as practitioners in the financial industry, technology Internet industry, real estate industry, building decoration and other industries, and sales in some fields.
In his view, the first reason for the "return to poverty" of the middle class is the decline of the industry. Some industries have shown a downward trend in recent years, such as the Internet, real estate, and finance. The high salary in the Internet industry is still there, but in the past, a position could sit for ten years, and now there may be a crisis at the age of 35, and if you look for a job after going out, the income may not be maintained.
The second factor is leverage. "If a person's income is more than 600,000 yuan for several consecutive years, and he feels that the future is bright, he may increase leverage to spend the money he has not yet earned, such as taking a high loan to buy a house, buying a car loan, and even increasing leverage in investment and financial management. Too many people spend money they haven't earned yet, but the script doesn't go the way envisioned. ”
In addition, another reason for the "return to poverty" of the middle class is high consumption. In fact, the asset resilience of this group is not as strong as imagined.
"The difference between the middle class and the rich is that the money taken out by the middle class to invest, buy a house, start a business, etc. is a one-time payment, and if it loses, it will return to poverty." The rich usually have an industry and the ability to make money, even if one or two are not smooth, the overall anti-risk ability is still relatively strong. Therefore, the moment the middle class invests money, it must be clear that this may be a loss, but most people do not understand it, and they are confused by the beauty in front of them. Ge Jia said.
What to do next is a difficult problem that many middle classes face today.
Ge Jia believes that those middle class who have not encountered economic pressure should have a certain sense of risk before and can continue to maintain, but also suggest appropriate deleveraging, if the mortgage is too high, you can repay part of it first, have multiple houses and the mortgage is high, you can sell some real estate, international schools and the like can also be reconsidered in combination with the income situation.
In addition, regardless of the type of middle class, a certain degree of consumption contraction and consumption downgrade are necessary. "The middle class consumption is mainly a variety of training courses, beauty salons, gyms, as well as health supplements such as cordyceps, bird's nest, sea cucumber, etc., these are mostly emotional consumption, many people feel that certain things can reflect identity, when the crisis comes, the most should be cut first."
Feiyu is also thinking about the next arrangement recently, she has not been idle in the past two years, and has accumulated a lot of skills. "Home decoration, I participated in the design, construction, found a lot of resources, millions of decoration, I personally did it, at least saved 500,000; Because of the move, I went to learn the organizer, and the finisher charges more than 100 yuan per hour to tidy the wardrobe, which is also my new skill; Because I want to lose weight, I also took a health manager certificate, I am very optimistic about the big health industry, and then I have to think deeply to find a suitable direction. ”
Calming down, Feiyu felt that this was actually an opportunity to force himself to adapt to the new environment and develop new businesses.
People are often most afraid of what they suffer losses. What Flying Fish regrets the most is that he didn't have enough cash in hand, which makes him passive now. "I also have friends around me who have a higher annual income than us, but basically moonshine, and there are mortgages and car loans, and the cars are all million-level, I strongly recommend that she set aside some savings in case of possible variables." Her advice to the middle class is to try not to overspend, invest cautiously, even if it is a full-time wife, try to maintain the ability to make money, and configure insurance as the last guarantee.
Chestnuts and light rain eat the loss of investment. Chestnut suggests that everyone should not increase leverage in investment, steadiness is the mainstay, and after having money, you must not invest again because of greed, especially in areas that you are not familiar with. After learning the lesson, she finally realized that she must learn to keep money, after all, normal consumption may be enough to spend in this life, and investing indiscriminately in pursuit of high returns will be lost. Xiaoyu strongly recommends not touching the financial derivatives market such as bulk trades.
In addition, the advice of many respondents is not to toss your assets, spend less money and keep more accounts in daily life.
For those who have "returned to poverty", Ge Jia believes that they can wait for the opportunity to find some suitable path. In his view, new opportunities may appear in the future, and some new leading industries and occupations may be brewing, first seek stability, and then find new opportunities.
"In the next two or three years, the middle class that 'returned to poverty' will almost return to the starting point, and those who do not 'return to poverty' may be stronger, and with the development of new industries, a new batch of middle class will appear." Ge Jia said.
*Image from Unsplash. At the request of the interviewees, except for Ge Jia, all names in the text are pseudonyms.