The Risk Averse Middle Class

Posted by in Miscellaneous

I’m not sure why, but I think it’s probably going against the grain that has highlighted this to me. I think the middle class is full of people terrified of taking risks. Most people, in general, are terrified of doing anything risky, but I think the middle class has certain forces within that make it even tougher.

Now let me preface this a little bit. I’m talking about people who grew up and knew they were going to college. You may not have had all of your college paid for, but you knew you were going to go (whether or not this is a good thing is a different story).

I’m also talking about people who have a high safety net. Meaning if you were to fail, your worst case scenario would be living for free or cheap with a relative and being underemployed.

Also, if you have kids or a mortgage, you naturally have a much lower safety net. Failing means not feeding your kids or going into deep financial troubles.

But that’s not most people graduating from college now of days. Most people graduating from college or around college age in the middle class don’t have kids, don’t have a mortgage, and typically have a friend or relative they could live with if everything went wrong.

A lot of us have a least a period in our life where all these factors are true.

When these factors are true, you have an extremely high safety net. The idea of a safety net is something Cory and I talk about all the time. If shit were to hit the fan, where would we fall too? If my businesses were to all completely fail, what would my life be like?

Well, I’d probably move back to my parents’ place and immediately start saying yes to the people who have asked me to consult. I’ve never wanted to consult, but it would be enough of an income stream to start putting my life back together quickly.

I’m pretty good at copywriting at this point, so I could start freelancing with that. Using this income to try again at running my own business, even if I’ve failed previously. Because it’s not about being correct all the time, but it’s about being right all the time:



Talking about failure is a common practice of entrepreneurs and traces back to the ancient Stoics. If you are thinking about failure and planning for it, you’re more likely to be able to avoid it. While I am very positive and confident about the things I do, I’m not blind to the possibilities of everything falling apart.

Black Swan events happen, and sometimes you’re not set up in an antifragile way.

Also, the most powerful part of planning for failure is that I’ve realized, I don’t fall that far if I fail… and if you’ve fit the description of the middle class I described above, chances are you won’t either.

But Why Are We Scared Then?

Realizing that our safety net is higher than expected doesn’t address why we are scared to take chances to live the lives we really want. Lives where you don’t get the Sunday Blues because you know tomorrow is Monday.
I think there are a couple of main reasons to this. The first being that we have social scripts that as middle class people we are told to follow.

1. Go to college
2. Get a job
3. Land a corporate gig
4. Work up the ladder for 40 years
5. Buy a car and a house. Go into debt to do so.
6. Retire

You probably know the script, and have heard it said quite a few times, but have you honestly asked yourself why you follow it?

I’ve talked about it before so I won’t dive into it much here, but that script used to work for our parents. However, even when it was working, it wasn’t the only way to go about life.

This is what we’re still told to do, though. We don’t question it because we assume anything we’re told repetitively is true. This is called the availability bias. We are inclined to believe what we hear most often, whether it is true or not.

In reality, though, the people who created this script and try to enforce is are no smarter than anyone else.

You may not be told this directly (although I have), but you get told it indirectly thousands and thousands of times over the course of your life. You even get told it when are successfully not following that script.

There is a social stigma for doing things differently. It makes people feel weird, and if you’re the only one who is doing it and truly believes in it, then it can become isolating. Nobody really wants to feel isolated. From a social standpoint, it’s easier to just live the safe script and not be the weird person.

One of the second factors that make the middle class risk averse is our inclination as humans to avoid loss more than wanting to gain. This is well known in behavioral economics, that people would much rather not lose $100 than gain $100.

The crazy part is that it isn’t until the gain becomes around $600 versus losing $100 that the feelings start to become equal.

Basically, as humans, we are six times more worried about losing than we are about gaining.

What does this mean for taking risks in life? It means that if you are middle class, you are afraid to lose your “middle classness”. As a middle class person (and upper class as well), there are certain luxuries built into your life that you have always known. Probably like where your next meal will come from. Being able to watch TV. Not having to work two jobs. Things that people born and raised middle class have never lived without.

Being afraid to lose these comforts makes you afraid to take risks. If you are six times as worried about losing your middle class comforts as you are about building a life you truly want, then you have a lot hidden forces to fight against.

Note: Being upper class isn’t the goal, but having the ability to tap into the lifestyle that only the upper class has had access to is the goal. The upper class is typically the only one that has financial freedom, gets to travel often, gets to choose their work more, etc.

If you combine this pain of loss with the social scripts ingrained into us, it’s no wonder that so many people settle. They settle for jobs they don’t like just to follow scripts that they really don’t have to.

Being afraid of losing life’s comforts goes back to another stoic practice of practicing poverty. Seneca the Younger, one of the most famous Stoics, had a practice of dressing down into peasant garments and living like someone in poverty for a couple of days each month.

Doing this practice taught him that his luxuries in life aren’t what define who he is and how he feels. He can still be happy and fulfilled without anything.

This has to make you wonder, why are you afraid of more afraid of losing something that doesn’t actually define who you are?

Where all this Starts to Get Ironic

Something that my girlfriend and I have been talking about lately is how do we repay our parents for providing this comfortable middle class life for us?
What is the best way to thank them for providing such a high safety net for us?

I feel like the best way to thank them is to live a life that you are truly passionate about. A life where you are equally excited about the work week as you are about the weekend.

I feel like the last thing parents want to see is their child working a job they don’t like just to maintain a certain lifestyle. Some parents may not say this to their children, and may actually say the opposite since their enforcing the scripts they’ve been taught, but at the end of the day, a parent doesn’t want to see their child unhappy.

If your safety net is high and you want to thank your parents for it, then start to take some risks. Give some dreams a shot.

The best part about giving your ideal life a true shot is that you build skills while doing this. You become a better person. You can’t chase your dreams and be lazy.

When you are working towards something you really want, you don’t mind working weekends, learning new skills, pushing through obstacles. You may feel like “that isn’t the type of person I am,” but I’d like the argue that you only become that person when the end goal is something you care about.

That’s when you become the self-disciplined, motivated person.

Even if you fail, you won’t fall that far and will actually come out the other side a better person. But if you continue to work a job you’re unhappy with, then you’ll begin to stall. You’ll stop learning. You’ll start to do what’s only needed of you.

You can sit by and live the safe life and never truly become who you can be, or you can take a risk, knowing that even if shit hits the fan, you’ll be better off than if you didn’t even try.

We know who we are, but we know not who we may be – Shakespeare