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The Middle Class Mindset is the Opposite of Lifestyle Design

Fred Perrotta
Fred Perrotta
3 min read

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[T]he middle class in recent history has been defined by its ability to both earn and spend money in very predictable ways. —Venkatesh Rao

Whether you call it the middle class mindset or a financial script, the point is the same. Those who adhere to it are following a script, likely without a serious examination of that script's efficacy. This middle class mindset is the opposite of lifestyle design.

The middle class mindset means that you to do what everyone else does. Lifestyle design requires a re-examination and rejection of the scripts you've been given in favor of a new, personal script that you write for yourself. Scripts aren't the problem. Using generic, unexamined ones is.

The Middle Class Mindset

In Acting Dead, Trading Up and Leaving the Middle Class (2011), Rao outlines the limitations of the middle class financial script and the dangers in those limitations when the class they represent is on the decline.

These dangers beg the question, "Why is anyone following these scripts?"

Mainly because it makes financial management easy. Constantly computing the total costs of ownership, potential returns and risks around all spending decisions, is hard. And it doesn’t seem worthwhile when the income side is predictable and comfortable. Why bother to control costs when revenues are fixed and somebody else has already made up a predictable-costs script with reasonable margins designed to get you through retirement?

You get a paycheck. You buy what people like you buy. You follow the script.

Once you're locked into a script like this, escape is near impossible due to social pressure. If you reject the script and aim for something different, you are implicitly rejecting friends and family who have stuck to the script. You risk your identity and your social circle. A fear of losing "status" is too much for most people to overcome.

A norm-based social class will persist with disastrous financial choices long after the secure financial environment, on which its scripts are based, collapses. Simply because membership of the class is the source of all social identity and access to social capital.

Rejecting a script requires going against what everyone you know is telling you and, instead, making your own decisions. Luckily for me, I have a friend who also wanted something different. He, Jeremy, is my business partner. But not everyone thought that Tortuga was a good idea. My dad certainly didn't endorse my quitting a job at Google to start my own business. My path is the opposite of his generation's script.

The Lifestyle Design Alternative

Rao explores a radical alternative in The Las Vegas Rules I: The Slightly Malevolent Universe.

The middle class script is all about dependability, consistency, and security. The opposite approach, lifestyle design, is "gambling with time."

Lifestyle design isn’t a path to freedom. It is an opportunity to gamble your way to freedom. Which means you can lose, and end up worse off than if you had taken the traditional paycheck route. But unlike in the middle-class paycheck life, you have a non-zero chance of coming out on top.

He makes this distinction to clarify what many in the lifestyle design and 4-hour workweek communities get wrong.

Newbie drinkers of the 4-hour Kool-Aid don’t seem to get this. They think lifestyle design is a guaranteed path out of their crappy lives in cubicle prisons and the burden of the middle-class life script, mortgage and all.

Lifestyle design is not a panacea. Living in Bali or starting an Amazon business does not guarantee you anything.

Are you willing to reject your script and go against your peer group? Are you willing to fail and hear, "I told you so" from them? If you reject your class script and make a bet on lifestyle design, failure is the most likely outcome. If you're from a lower middle class town like me, you won't be lauded for the attempt, you'll be mocked for the failure.

As Dan Andrews, of the Tropical MBA, points out in The Middle Class Mind:

[A]lthough being a broke-ass entrepreneur certainly doesn’t guarantee that you’ll become a wealthy one, I believe those who are willing to be broke – on purpose – are more likely to become rich.