5 Things the Middle Class Can't Afford in 5 Years

Summary

In this video, the speaker discusses the financial challenges the middle class will face by 2030. Key issues include the rising unaffordability of residential properties, education, cars, vacations, and healthcare due to inflation. The speaker explains how price-to-income ratios and loan interest rates are escalating, making it harder for the middle class to afford essentials. The video urges viewers to save, invest wisely, and seek ways to supplement their income to navigate the increasing costs of living in the future.

Takeaways

• 😀 Middle-class families will struggle to afford residential properties by 2030 due to rising property prices and inflation.
• 😀 The price-to-income ratio for homes in India has significantly increased, making homeownership increasingly difficult for middle-class individuals.
• 😀 The average EMI-to-monthly income ratio in India has surged from 46% in 2020 to 61% in 2024, highlighting the growing burden of home loans.
• 😀 Education costs, including private school fees and higher education, are inflating at a rate higher than the general inflation, making it harder for families to afford quality education.
• 😀 Medical education and private medical college fees have skyrocketed, with MBBS course costs now ranging between ₹70-80 lakh to ₹1 crore.
• 😀 Car prices have more than doubled over the past few years, making even basic vehicles unaffordable for many middle-class families.
• 😀 Rising taxes, government fees, and global supply chain disruptions are contributing factors to the escalating costs of buying and owning cars.
• 😀 Vacation costs, particularly air tickets and hotel rates, have surged dramatically, with some domestic airfares increasing by up to 40% since the pandemic.
• 😀 Travel-related inflation, particularly in the tourism sector, has accelerated, making vacations, especially international ones, increasingly unaffordable for the middle class.
• 😀 Healthcare costs, including insurance premiums and hospital expenses, are growing at an annual rate of 14%, making quality healthcare harder to access for middle-class families.

Q & A

What assumption does the speaker make about the audience?

The speaker assumes that the majority of their audience, around 80-85%, belongs to the middle class.

What is the main focus of the video?

The video focuses on discussing certain things that the middle class will not be able to afford by the year 2030 due to inflation and rising costs.

Why has the middle class been ignored by the government, according to the speaker?

The middle class has been largely ignored by the government because they are taxed heavily, and the inflation on essential goods significantly impacts them.

How has the price-to-income ratio changed over the years?

The price-to-income ratio in urban cities has increased substantially, from around 6.6 in 2020 to 7.5 in 2024. In metropolitan areas, it has reached about 11-12.

What is the predicted difficulty for the middle class in affording residential property by 2030?

Due to rising property prices and increased home loan interest rates, it will be extremely difficult for a middle class individual to afford a residential property by 2030.

What are the rising costs in education that middle-class families will face by 2030?

The cost of education, especially in private schools and colleges, has been rising significantly, with an annual increase of 10-12%. In the future, it will be very challenging for middle-class families to afford quality education.

How much has the cost of an MBA course increased since 2007?

The cost of an MBA at IIM Ahmedabad has increased by 575% from around ₹4 lakh in 2007 to ₹28-29 lakh recently.

Why are car prices increasing so rapidly?

Car prices are rising due to higher production costs, including raw material costs and government taxes like GST, as well as supply chain disruptions.

How have the costs of taking vacations changed, and why will it be harder for the middle class to afford them in the future?

The costs of vacations have increased, especially after the pandemic. Airfare and hotel rates have surged by 40% and 15% respectively, making it increasingly difficult for the middle class to afford vacations, particularly international ones.

What is the predicted impact of healthcare costs on the middle class by 2030?

Healthcare costs are rising rapidly, with an annual inflation rate of 14%, which is the highest among Asian countries. This will make it very difficult for the middle class to afford good quality healthcare by 2030.

What advice does the speaker give to the middle class in response to these rising costs?

The speaker advises the middle class to save, plan, and invest their money efficiently, keep their expenditures minimal, and supplement their income to cope with the rising costs and ensure financial stability in the future.