#AmericanDream, #disappearingAmericanDream, #economicgrowthrates #retirementplanning
Retirement planning is complicated for Americans of all ages.
So says Jeff Reeves, editor of InvestorPlace.com, who wrote a column for USA Today. It was published in the May 10,2015, edition of The Tennessean newspaper of Nashville.
The Employee Benefit Research Institute, in a 2014 survey, found that only 64 percent of Americans have saved any money for retirement to supplement Social Security benefits. It says that roughly six of 10 Americans have less than $25,000 saved for retirement, according to Reeves’ article.
Certainly, if you are young – say, in your 20s and 30s – retirement is a long way off. Or, so you think. Time travels with break-neck speed, and 30 years can go by very quickly. It’s never too early to save, even if it’s only, say, $5 a week. That may be one visit to Starbucks that you would be sacrificing.
Your parents and grandparents probably were diligent savers. Perhaps they were disciplined and never touched their retirement money.
In their day, perhaps, jobs didn’t disappear more quickly than cake at a child’s birthday party.
If you are young, you face a daunting task of keeping a good job for as long as you want it. If you are older, say, in your 40s and 50s, perhaps you had a good job for a long time, and it’s now gone.
All this complicates saving for retirement, so that task requires extra discipline, perhaps more than your parents or grandparents had.
Despite all the gloom-and-doom reports, Social Security is likely to survive. Benefits could be reduced a bit, but it should survive. The question to ask yourself is, what kind of lifestyle will I have on Social Security alone? Even if you add in a pension, should you be fortunate enough to have one, it’s still not going to be that much. If you are a careful, disciplined person, you would have spent your whole life watching every dollar. Your retirement years should be enjoyable, not ones of deprivation.
Well, one does not have to rely on a job, pensions etc., to have a good retirement. One does not have to engage in risky, unsafe investments to get a decent return.
But, to achieve that, one has to be motivated to want to change his situation, rather than accept it and complain about it.
If you are that type of person, visit www.bign.com/pbilodeau. Check out how many people from all different backgrounds, education levels and skills are not only securing their retirement, but helping others do the same.
Many of us do not want to take handouts, but want to get what was promised to us. Promises can, and often are, broken. That’s why motivated people look outside what they are used to and find a new way to prosperity.
Now, if you are indeed young, you can save your way to prosperity. Reeves quotes John Sweeney of Fidelity Investments as saying, “we are seeing many examples of people who have $1 million in a 401(k) because they started early, they diligently contributed and kept to it.”
That’s more difficult to do as jobs come and go, and jobs, if they are replaced, are often replaced with ones paying and providing less.
But the discipline you will acquire if you diligently save and not touch those savings until later years, and put those savings in the hands of a trusted financial adviser that won’t gobble up too much in fees, you can secure potentially great retirement.
The new Voya ads talk about “orange money,” that one must put away for retirement and not spend. Designate your own “orange money,” or whatever color you deem it, so you won’t have to scrape together an old age of deprivation.
Peter
Monthly Archives: May 2015
THE DISAPPEARING AMERICAN DREAM, PART 1: NUMBERS TELL PART OF THE STORY
#AmericanDream #disappearingAmericanDream #economicgrowthrates
The American Dream is disappearing, by many accounts.
America needs the 3.5% solution.
No, it’s not a chemical that will magically remove all our country’s woes.
It an economic growth rate we once saw as a nation, but for which there is no projection to ever achieve again, under current circumstances.
That’s the premise of an article by U.S. Sen. Bill Cassidy (R-La.) and Louis Woodhill, an economics writer and venture investor. The article was published May 1, 2015, in The Wall Street Journal.
Then, on May 3, 2015, Michael W. Kraus, assistant professor of psychology at the University of Illinois, Shai Davidai, a Ph.D. candidate in psychology at Cornell University and A. David Nussbaum, adjunct assistant professor of behavioral science at the University of Chicago published an article in the New York Times that says we vastly overestimate the amount of upward mobility in our society.
Finally, Peter Morici, professor of economics at the University of Maryland, says the slow job growth and low interest rates are decreasing the number of “safe” investments for savings, while allowing big companies cheap money for mergers and acquisitions. Morici’s column appeared in the May 12, 2014, edition of The Atlanta Journal-Constitution.
What does all this mean for the average working person – or, perhaps, the average person who is no longer working? If you get a new job, it will likely pay less than the one you lost. You’ll struggle to get any kind of return on what little you are able to save, if anything at all. And, the big companies will combine into entities that will put more people out of work.
Cassidy and Woodhill say the Congressional Budget Office projects a meager growth rate of 2.3% for the gross domestic product over the next decade. Meanwhile, from 1790 to 2014, the average growth rate was 3.73%, they say. However, the two men have a way they believe will help generate the kind of growth the U.S. needs to prosper: allow oil exports, and not taxing repatriated overseas profits of U.S. companies.
Cassidy and Woodhill point out another fact: had the GDP grown from 2001 to 1014 at the 3.87 annual rate it had grown between 1993 and 2000, the federal government would have had a $500 billion surplus in 2014, instead of that big a deficit. Certainly, a 1 percent difference in the economic growth rate makes a big difference in the outcome for all of us. The writers also point out that current GDP growth per person is $2,433, lower than Papua New Guinea’s.
If we are truly in for growth rates in the 2s rather than the 3s, we will certainly see a decrease in upward mobility, as the trio who wrote in The New York Times suggest.
To extrapolate more on Morici’s column, low interest rates cannot be sustained forever. Average people usually can’t go looking for riskier investments at higher returns, lest they get burned. Yet, Morici says that is what some are doing.
Let’s look at Cassidy’s and Woodhill’s recommendations. Oil-company TV ads are telling us that the U.S. is currently the No. 1 producer of natural gas, and soon to be No. 1 in oil. The tendency, after decades of buying energy ingredients from countries who hate us, is to keep all that oil and gas we are now producing to ourselves.
But Cassidy and Woodhill say we should sell some of it. Perhaps we should analyze what it would cost us to ship the oil and gas elsewhere, vs. distributing it domestically. It’s cheaper, for example to ship Alaskan oil to Japan and other Pacific nations, rather than getting it to the U.S. mainland.
Then, there are the profits U.S. companies make overseas. There are trillions of U.S. assets awaiting repatriation. But, much of that would go to taxes in the current milieu. One has to analyze whether it’s better to bring the money home, tax-free, and put it to work here, vs. allowing it to sit in foreign institutions while we still collect no taxes on it. That’s certainly worth a full vetting.
As for our own prosperity, you may be among those who have given up looking for work, or who has been forced to take a job that pays less than the one you lost. The good news: there are many ways out there to make incomes without having to have a traditional job. Sure, there is work involved, but no boss and no threat of layoffs. For one of the best, visit www.bign.com/pbilodeau.
Sometimes, when all looks bleak, there’s a huge ray of hope that will guide those who would go for it. It may require new thinking and motivation, but sitting around complaining of bleakness and wishing ill on those who have it better than you accomplishes nothing.
Peter
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WORKERS, CONSUMERS, VOTERS AND POWER
#workers #consumers #voters #power #RobertReich
As a worker, consumer and voter, do you feel powerless?
Do you feel that the world favors those with more than you, and tramples you because you might be in their way?
Robert Reich, the former U.S. secretary of labor and current professor of public policy at the University of California at Berkeley – and a frequent commentator on TV news programs — discussed this in a May 3, 2015, column in the San Francisco Chronicle.
“A large part of the reason” that people feel their voices don’t count, “is we have fewer choices than we used to have,” Reich writes. “In almost every area of our lives, it’s now take it, or leave it,” he continues.
Companies are treating workers as disposable cogs, and most working people have no choice, he says. The once-powerful private-sector unions have lost much of their clout, he adds.
As consumers, we find that as companies merge and deliberately create fewer choices, we pay the price. “U.S. airlines, for example, have consolidated into a handful of giant carriers that divide up route and collude on fares,” Reich writes. In 2005, there were nine major airlines. Now, there are four, he adds.
Even in the political arena, there is less competition because so many districts have been gerrymandered to be safe for the incumbent – or at least the incumbent’s political party. “(More than) 85 percent of congressional districts are considered ‘safe’ for their incumbents in the 2016 election,” Reich says.
What’s the average person to do? Certainly circumstances have occurred that are beyond the average person’s control. But there is also good news: the average person can take advantage, if he so chooses, of ways to combat the apparent lack of choice.
As consumers, we can, as individuals, adjust our behavior to fight the put-up or shut-up attitudes of the companies that serve us. Using the example of airlines, there isn’t much an individual can do about delays, whether they be caused by a mechanical problem, weather or some other issue. No one would want to fly unsafely just to get to a destination sooner.
But, as an example, to combat the big airlines’ recent policy of charging a fee to check a bag, we can learn to pack more carefully, so that everything fits into smaller luggage that can be carried on the plane. On full flights, if people come prepared to carry on their luggage, airlines will ask that some of the suitcases and other items be checked. Then, they cannot charge you.
As voters, we can vote defensively, if we don’t like the ideology of the candidates most likely to win. How? If your state laws allow, vote in the primary of the political party whose ideology is generally opposite yours. Find the candidate(s) with records of statesmanship, i.e. working with the other party to get things done. Vote for those candidates, even if they would not be your choice in a general election. Negotiation and compromise are the essence of governing. The problem in politics, regardless of one’s political beliefs, is too much ideology and not enough statesmanship.
Finally, as workers, we need not to think of a job as the only way to make an income. There are many other ways out there with which people, regardless of education, background or skills, can earn substantial income without having to put up with an employer’s whim. For one of the best, visit www.bign.com/pbilodeau
As for unions, they did wonders for workers and the middle class many decades ago. However, today’s global business world requires companies to have extreme flexibility and efficiency. Unions decrease both of those things, but years ago, productivity gains and other business progress occurred much more slowly. It’s best to presume that no matter what your job, and no matter how good you are at it, it will probably go away before you want it to.
In conclusion, Reich is largely correct about the state of the world, and our place in it. But, just as circumstances we can’t control can hurt us, the world has provided more options for those who choose not to tolerate those circumstances, and want to make their lives much better.
Peter
WHO’S CADDYING FOR YOU?
#innercaddy, #JordanSpieth, #TheMasters #positiveinnercaddy
A professional golfer routinely has a caddy to help advise him on what club to use for a specific shot, what type of shot to make etc.
In the example of young pro golfer Jordan Speith, who won The Masters tournament in 2015, and his caddy, Michael Greller, there is also positive motivation.
Gregg Steinberg, professor of human performance at Austin Peay State University in Tennessee, and author of the best-selling book “Full Throttle,” discussed the “inner” caddy in a column in the April 26, 2015, edition of the Tennessean newspaper in Nashville.
As Steinberg points out, Greller probably would be out of a job if he kept telling Spieth things like, “don’t hit it right again,” or don’t leave it short.”
Steinberg says that if one’s “inner” caddy is giving him negative information, or keeps berating him, it’s OK for that person to fire his inner caddy.
The point here is that you, and your inner caddy, should only have positive interaction. Perhaps you have gotten complacent, or your inner caddy is a bad habit that you have way too frequently.
Steinberg says that one aspect each successful athlete and business person has in common is that he has fired his bad inner caddy, and keeps training and retraining his good caddy daily.
How do they do this? Steinberg offers three ways. First, develop a good inner caddy book filled with positive affirmations, such as, “I really feel it, today.” Secondly, like Bruce Lee write down any negative thoughts on paper, and visualize crumpling it and throwing it into a fire. Third, Steinberg cites the tried-and-true rubber band trick. If you start thinking negative thoughts, have a rubber band on your wrist that you can snap, and that will snap you out of those thoughts.
To some, this may sound like psychology 101. We’ve all learned along the way that thinking good thoughts is always better than thinking bad ones. But, bad things often happen to good people, no matter what they are thinking about.
When that occurs, instead of thinking about more bad things that could happen, think of the good that will come after you’ve dealt with a bad circumstance. Bad circumstances often are our greatest teachers.
Circumstances you can’t control are not inevitable, but they can and do occur. We must use whatever methods at our disposal, and within our personalities, to make sure the bad things don’t get to us, or, at least, only get to us for a short time.
One must believe he is a better person than the bad circumstances he’s been dealt. He didn’t deserve what he got, but he can overcome it.
Sometimes overcoming bad circumstances may require us to step outside our comfort zones. Jordan Spieth, in his very early 20s, could have found it difficult to compete against players more accustomed to pressure-packed tournaments. Instead, undoubtedly with the help of his real caddy, he hit shot after shot over four days, overcame the bogeys that came his way, and won The Masters.
If you, no matter what your age, have the determination of Jordan Spieth, are willing to fire your negative inner caddy and hire one that gives you the strength and grit to win, power to you. If you are looking for something outside your comfort zone to help you win, and help you help others win, visit www.bign.com/pbilodeau.
Spieth had dreamed about winning The Masters since he was 14. What are you dreaming about? It’s there for you, if you find the right reinforcement, and the right vehicle, to take you to it.
Peter