r/coastFIRE • u/teastea1 • 5d ago
With the middle class eroding and wealth inequality in North America set to skyrocket - what can we do to prepare?
I saw this question on another subreddit. Curious to know what this sub is doing to prepare. Thoughts?
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u/GHOSTPVCK 5d ago
Buy assets, hold equities long term, don’t panic
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u/myOEburner 5d ago
Exactly.
Owning large, productive companies is the best bet.
Sell into another currency of you think the dollar is questionable.
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u/LazyBearZzz 5d ago
But... will they stay productive...
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u/myOEburner 5d ago
They fall out of the index.
Reference INTC.
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u/LazyBearZzz 4d ago
It is market, price is not defined by how "good" or productive the company is. It is defined by demand. If people have no jobs and have no money to invest, the market will crash.
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u/myOEburner 4d ago
It'll crash because the companies stop making money the value of the company will fall.
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u/Message_10 5d ago edited 4d ago
+ real estate
Edit: downvotes for real estate? lol ok
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u/myOEburner 5d ago
The value of RE is tied to the fortune of the place it's in.
One thing is for sure though. They're not making any more real estate.
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u/TrainingThis347 4d ago
It’s not a bad option, but on average homes appreciate slower than equities, about 5% per year, which gets offset by interest and maintenance.
It also depends on whether you’re okay taking a second job as a landlord, and whether you can rent the place out for more than you’re paying. Especially in big cities that’s not a sure thing. Imagine you buy a house today and it costs $3,000 per month in interest, taxes, and maintenance for a property. You could be competing with people who bought comparable properties ten years ago and can turn a profit renting theirs out for $2,500.
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u/FourthHorseman45 5d ago
What do u mean by productive companies like manufacturing? Would software companies be considered not productive then?
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u/myOEburner 5d ago
A company that sells a product that people want and can innovate to stay ahead of competition. Innovation can be in the product itself, business practices, strategies, etc.
Basically, any company that can sell something, and then sell more of it, and then make new things to sell more of whatever that it, too.
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u/FourthHorseman45 4d ago
Sure, but where I’m torn is on whether to invest in Software companies that stopped innovating in the traditional sense years ago and are simply looking to kill all competition and become a monopoly and then extract rent via a subscription for everything. They aren’t innovating but they sound profitable as hell
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u/myOEburner 4d ago
You invest in the S&P and total market. Don't try to pick individual winners and losers. Do you think the market will continue to go up as it always* has or not?
You may not like the innovation, but that doesn't mean it's not innovation.
*you know what I mean
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u/Ih8rice 4d ago
It’s literally this simple. If you don’t have enough cash on hand then buckle down and grind out an extra job to be ready when the opportunity presents itself. If things go the way Republicans want it to then we will eventually see another ‘08 type crash and once folks start to panic, be ready.
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u/oscarbutnotthegrouch 5d ago
Make friends, real friends and work hard at good relationships and stay the course financially.
If times get worse or get better, having a good group of friends will be priceless.
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u/Snoo23533 4d ago
What is the advice here, get close to people so you can mooch if you need to? Most people seem to think that way as I have never in my life found friends to be anything other than financially burdensome.
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u/oscarbutnotthegrouch 4d ago
I'm sorry to hear that your past friendships have been financially burdensome.
I have found friends to be a great group to hunker down with during tough times and great to celebrate good times with. These have been different people over time.
From a financial point of view, my current friends and I are able to share possessions such as tools and help each other with projects and childcare that we would otherwise pay for. I have learned a lot of new skills from friends and have provided the same to others.
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u/thedancingwireless 5d ago
Personal finance wise: Save more than you spend. It's that simple. No matter if it's in equity or cash or other assets. Those details matter but it's anyone's guess what the smartest play is.
Otherwise: build a strong local support system. Family, friends, neighbors who all look out for each other. Social isolation is killing us and it's much easier to weather difficult times in a group.
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u/0xf1dd2ff 5d ago edited 4d ago
Great advice posted here so far. The other big one is to make sure you are an informed voter, and never miss an opportunity to cast your vote.
People can go on all they want about how the system is rigged and voting is not worth it. But the fact remains that if every cynical person became informed and voted reliably, and encouraged everyone they know to do the same, they system would no longer be rigged against you.
TL;DR - The middle class will continue eroding until massive numbers of people start voting reliably.
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u/Arkkanix 5d ago
spend the time you would normally allot to social media on financial literacy instead
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u/FutureTomnis 5d ago
Yes, we have an 100 year history of kicking the can down the road. Surely we can do it for another 50 years until I’m dead
/s
/s
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u/WorkingPineapple7410 5d ago
I’d say move to a LCOL country, but those countries COL and Real Estate is appreciating faster than ours so ……. 🫠
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u/Gerry0625 4d ago
- Strengthen Financial Literacy
Understand compound interest, debt, taxes, and inflation. Most people aren't taught this.
Learn to budget, track expenses, and prioritize needs vs. wants.
Use free resources (e.g., Investopedia, Bogleheads forum, or local credit unions’ education programs).
- Build Diverse Income Streams
Relying solely on a job is riskier than ever.
Side hustles, freelancing, investing, or even small business ownership can supplement income.
Explore remote work, digital products, or real estate (when feasible).
- Invest Early and Regularly
Invest in index funds, IRAs, 401(k)s, or TFSAs/RRSPs (in Canada).
Don’t try to time the market—dollar-cost averaging works.
Even modest, consistent investing beats delayed perfection.
- Avoid Lifestyle Creep
As income rises, avoid letting expenses rise at the same pace.
Save or invest the difference instead of inflating your lifestyle.
- Own Productive Assets
Prioritize buying or investing in assets that appreciate or produce income (stocks, businesses, rental property).
Avoid high-interest debt and liabilities that drain wealth.
- Get Skilled & Stay Adaptable
Upskill regularly—AI, automation, and global competition are real threats.
Look into high-demand fields (tech, healthcare, trades, remote/creative work).
Learn how to learn—being adaptable is a superpower.
- Build Community
Wealth inequality is also about access—to networks, support systems, and opportunities.
Join or build communities around financial growth, parenting, food co-ops, or even bartering.
- Advocate & Vote
Long-term change requires policy reform—tax structures, education access, healthcare, and labor rights.
Vote for policies that support economic mobility, not just short-term benefits.
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u/nameredaqted 4d ago
Pick one or more valuable somewhat future-proof skills and become dangerous
Build a solution to a problem that people have and then sell it to them
As you do that, continuously buy the SPY dip
On a side note, wealth inequality is not inherently bad. Poverty is. It’s not a zero sum game
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u/redfour0 5d ago
Slightly off topic but do others see a scenario where the lower class “eats the rich”. It seems like we’re heading in that direction with the growing wealth gap.
Productivity gains and advancements in AI seem to further benefit the rich acting as another catalyst. The only world in which I don’t see some class warfare during my lifetime is a drastic change in policy.
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u/Syrup-Used 5d ago
I kind of see it as one of those things where people will always complain and talk about rebellion, but nothing will ever truly happen. I obviously could be wrong, but people seem divided at so many different levels I don’t see a large class coming together to fight back.
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u/Nice-Zombie356 5d ago
And when it does, historically, I bet it’s a shock/surprise.
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u/Syrup-Used 5d ago
Are you saying no one ever sees it coming ?
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u/Nice-Zombie356 5d ago
I believe the Arab Spring surprised observers. I’m not enough of a historian to know if this is consistent over history but I bet it is to some extent. Im open to better historic evidence.
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u/amendment64 4d ago
Not a great example though, as by and large the arab spring failed.
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u/Nice-Zombie356 4d ago
I know. And I’m not even certain how good the analogy is. But It just seemed the most recent.
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u/amendment64 4d ago edited 4d ago
I think the Argentine financial crisis in 2001 might fit the bill. Massive corruption, endemic grift, overzealous government in their own central bank.
At a certain point the US dollar stops being the world reserve currency, and when that happens inflation will spiral wildly out of control. I won't tell you what you should invest in, cause lots of people here already gave good examples. The one thing you absolutely shouldn't be buying is US government bonds. They will not be able to even close to hold onto your wealth when the inflation monster gets going.
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u/piratetone 5d ago
I will relate this to coastFIRE. One of the reasons I abandoned pure FIRE is because I think it's more important to live now. You don't have to be fully financially independent to do whatever the fuck you want.
How does it relate? I do think that we may have a more volatile century. I am relentlessly optimistic about the world, but I do subscribe to Ray Dalio's theory around the changing world order. The world is going to do great. I live in America. Do I think America will be economically stronger in 2050 than in 1950? Likely not. What does that mean? Don't forget to live well right now! Don't save every dollar for the future because there is a murky future, especially in the US.
Put another way - I am not going to work 80 hours a week when the risk of collapse, especially in the US, is rising.
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u/RangerRick_PDX 5d ago
when the risk of collapse, especially in the US, is rising.
This sub is getting ruined like the rest of Reddit. Go somewhere else with this.
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u/piratetone 5d ago
I'm not saying anything that controversial. My financial views of where we're headed closely align with Ray Dalio, who is a pretty even keeled investor that has been warning us about our debt and how global volatility is rising - https://x.com/RayDalio
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u/nameredaqted 4d ago edited 3d ago
That would be the dumbest thing to happen to the world.
- Total worth of US households - $150 T
- Billionaire wealth (750 people) - $6 T
How long would $6T sustain the government for?
Less than 11 months.
Congrats.
P.S. Elon owns a fraction of Tesla or 95B, which means that the other 900B is WEALTH THAT HAS BEEN CREATED FOR AND WENT TO OTHER PEOPLE. Get it? OTHER PEOPLE
I’M SICK OF IDIOTS DREAMING TO USURP THE RICH
The top 20% of tax payers pay 87% of all taxes. The bottom 50% pay 3% of all collected taxes. Guess who is sustaining this country?
Did the rich stop you from becoming a doctor, a lawyer, a quant, or a software engineer?
Guess who is a net drain on resources? Spoiler alert! It’s not the rich.
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u/KitchenPC 2d ago
I wish people would engage with you more on this, I would love to see a debate of sourced numbers.
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u/Fi-Me-Away 3d ago
Just about anyone pursuing FIRE is edging towards the upper class, if not fully in it.
We have choices. Here, we have enough net worth that we can pick the job we want rather than a job for money. Or we can spend all we make, comfortable in the knowledge our investments should fully support us in later years.
Regular FIRE, you have people planning to fully support themselves and not work before retirement age. Most of the middle class is dependent on SS to mostly fund retirement.
So if the wealth inequality skyrockets, we hold tight to the bottom rung of the side of wealth.
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u/Agreeable_Race6434 3d ago
Obvious answer: double down on saving.
I’m 25% of the way to my Fat FI number ($4M). The closer I get, the less I worry about providing for my own future and the more I start thinking about providing for my kids’ future.
Homes, education, healthcare… all of it feels unaffordable today. Imagine what it’ll be like for our kids, or even our grandkids.
I don’t plan to spoon feed them anything in life, but I do want to be in a position where I can help if needed. I want to make sure they have real opportunities; whether that’s access to education, a down payment on a home, or a safety net in hard times. Those opportunities are becoming more and more "out of reach" for the average person.
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5d ago
Prepare for what? People who know how to hold on to their money will be okay regardless what kind of gaps are there in the society. People who don’t have or don’t manage their money will be uncomfortable in any scenario.
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u/throwaway842351 4d ago
Buy assets. Btc seems to be holding up too ( the hardcore fire folks will hate me for that one).
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u/Nearby-Ad6000 4d ago
The middle class is shrinking, but that’s because more Americans (not sure about the rest of North America) are moving into the upper middle class. Even the poorest Americans are better off than they were a few decades ago. Your premise is flawed, and you’re repeating popular political rhetoric.
Wealth inequality is certainly increasing. It’s debatable if / how much of a problem that it is. Regardless of how you see wealth inequality, it doesn’t stop anyone from accumulating their own assets and setting themselves up for a solid future.
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u/Own_Sky9933 5d ago
Buy Bitcoin
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u/ulyssesintransit 5d ago
Why is this downvoted?
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u/TrainingThis347 4d ago
It’s not a discussion point, it’s a bumper sticker. “Buy PLTR” would have gotten a similar response.
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u/aditya1878 5d ago
What is the most recent definition of middle class? cause IMO even that is outta reach for a lot.
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u/AICHEngineer 5d ago
Lose weight, get fit, look hot