Middle Class Are Doing Worse in the Current So-Called Economic Recovery Than the Actual Recession

Newspaper headlines of late are quick to detail what little sign of national economic stability they can; some job growth here or a sign of stock market recovery there. And while it may be true that the S&P 500 is up 77 percent from the lows of March 2009-especially good for big-time stock market gamblers-median household incomes are falling at faster rates during this so-called “recovery period,” than they were during the actual recession years. As you can see from the chart below since the beginning of 2009 the median income has dropped sharply while unemployment rises significantly.

In the meantime, the National Association of Realtors (NRA), in addition to providing evidence of continued decline in home sales, also reported a record-high affordability index, which when taken together simply do not add up. How are homes more affordable when the median income continues to decline? Another example of how the media, along with agencies like the National Association of Realtors try to make things look better than they are. Low consumer confidence and tight lending policies by the banks pose definite difficulties, however there is more to be gained than lost as the cyclical nature of the economy will not provide such optimal investment opportunities for long. Now is the perfect time to start to invest in real estate as rates are low and you can make a great return on your money due to cash flow.

There are also great opportunities to purchase property with built-in equity as the banks continue to liquidate their inventory. Taking control of your future is more important now than it has ever been. As median incomes continue to decline the middle class will be pushed into poverty IF they do not do something about it. There are plenty of available resources and alternative investments the middle class can make right now but education is the key. Unfortunately the media is controlled by stock market advertising dollars which control the education base of the American public. Now is time to get educated about alternative investments instead of putting money in the stock market where all one has is hope the values will continue to climb, which is highly unlikely in the current volatile economic times. Stop hoping and enact an investment strategy that works. Stop investing for capital gains and invest in cash flow. A cash flow investor can weather economic instability much more than capital gain investors.

Owens Consulting Group founder Mathew Owens is a California licensed CPA and a full time real estate investor. He has completed over 100 transactions in the past three years, representing approximately $10 million in real estate, most of which has been sold to cash flow investors. He does multiple live educational events and online webinars.

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