Last Updated on October 15, 2025 by Chin Yi Xuan
What does it take to be the first in your family to escape the middle-income trap – and more importantly, never fall back into it?
I’ve been thinking about this lately.
On paper, Malaysia’s middle-income (M40) group earns between RM 5,250–RM 11,819 a month. But today, I’m not talking about income bands – I’m talking about a way of life.
The middle-income trap is when you earn enough to survive, but not enough to live freely.
You don’t have to worry about basic survival – but every life decision feels like a trade-off:
- Want to send your kids to ‘brain development class’? That means cutting back on your annual family trip.
- Want to buy a house? That’s 30 years chained to a job you might not even like.
- Want to join that Pilates or yoga class? Then your food budget takes the hit.
Every small upgrade in one area demands a compromise in another.
Table of Contents
How most of us got here:
When I was born, my parents only had RM1,000 left in their bank account.
My parents worked and saved hard, ensuring that I received the best education. In my parents’ generation, we’ve climbed from survival to stability.
However, growing up in a middle-income environment, I was exposed to the way of thinking that a lot of us would be familiar with:
- “Investing is risky” (so don’t do it).
- “Study hard and get a stable job” (the only way to get money is by exchanging your time).
- “Insurance is a scam” (so don’t EVEN talk about it)
- “Having debt is bad” (no one taught me about ‘good’ debt and ‘bad’ debt)
- And the things that aren’t spoken out loud, but done subconsciously – these are the most difficult mindset to reverse down the road: To prove that you’ve ‘made it’ in life, you need to have big cars and houses.
When I started my content creation career in the personal finance field, I noticed something:
The truly wealthy people think about money and wealth VERY DIFFERENTLY.
Heck, even their kids are brought up (thinking) differently.
While the mindset that I was taught growing up ensures survival, the limiting beliefs are also the ones locking many people in the middle-income trap.
In other words, the next leap requires a complete mindset revamp.
Escaping the Middle-Income Trap (MIT) – forever
I learned that to move beyond MIT, I needed to unlearn what once kept me safe.
More importantly, I have to adopt a different way of thinking about money and wealth:
- Money isn’t evil — it’s a tool for optionality.
- Growing income-producing assets while I sleep through investing (taking calculated risk).
- Stacking leverages to grow my income (small targeted effort, big outcome)
- Insurance isn’t a scam – it’s risk management
Also:
You do not need fancy cars or houses to show people that you’ve ‘made it’ in life.
Rewriting the Family Playbook
It took me years to rewire my own beliefs about money and wealth.
Even now, I still catch myself falling back into old, self-limiting beliefs at times.
But I’ve decided: I’ll be the first in my family to build the foundation for wealth that lasts.
If I’m lucky enough to raise the next generation, I want my kids to grow up with a different mindset:
- Freedom over materialism
- Leverage time and capital, not just effort
- Understand risk and reward, not fear it
- Seek optionality, not just stability
The Real Goal
Wealth building isn’t about flexing with race cars or designer goods.
It’s about optionality. It’s the freedom of choice to:
- Eat healthy and train without worrying about cost.
- Give your parents the care they deserve.
- Pursue projects because they’re meaningful, not because you’re desperate.
One final thought:
The middle-income trap isn’t just about income.
Rather, it’s a mindset range.
The real way out?
Think bigger than survival.
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p.s. If this resonates, hit reply and share your thoughts. I’d love to hear how you’re breaking out of your own version of the middle-income trap.
