Why 6 Figures Still Feels BROKE 🤔 | NerdWallet

The American economy is split in two and whether you're on the top or the bottom almost has nothing to do with your salary. So, we are currently in a K-shaped economy. And while this isn't necessarily a new phenomena, this is a year where it's really become impossible to ignore. So, what is a K-shaped economy? It's a period of recovery or growth that benefits one group a lot while the other group falls behind at the same time. It's shaped literally like the letter K where you have one arm going up and the other arm going down. And in a casual economy, the top arm is higher inome households whose wealth is compounding through things like stock market gains, home prices going up, and assets they already own. The bottom arm is everybody else getting squeezed by things like prices that are outpacing wages and the job market. This is how you can have an economy that looks relatively solid on paper while things like rising credit card debt and auto loan defaults are appearing in the same news cycle. This is a feature of how the K-shaped economy works and the forces accelerating it. things like asset prices, interest rates, the compounding nature of wealth itself. This is not slowing down. People at the top of the K aren't just earning more. Their wealth is self-compounding through things like stock market gains, home prices going up, assets they already have. People that depend entirely on a paycheck are structurally on the bottom of the K, no matter how big that paycheck may be. And this is why so many people feel like they're doing everything right and still falling behind. Maybe you went to school, you got the job, you're earning money, and you're like trying to save for all these goals. And yet every milestone, whether it be for the house or for retirement or for just feeling okay about your money, it keeps moving. And this is not because you're bad with money necessarily, it's because the game keeps changing while you're playing it. The things that used to build real wealth, like a good income, a steady paycheck, those things might not be enough anymore in the K-shaped economy. This K-shaped economy is not going to fix itself overnight, but understanding what you're up against can change how you make decisions. The K is going to keep doing what it does. The question is if your money is going to be working with it or against