History may judge the years 2007 to 2012, give or take a few years on either end, as the retirement bust years.
People not only lost jobs just before they were about to retire, but also their pensions shrank.
People who thought they were all set for retirement, with a nice, promised pension, got a rude awakening. The monthly benefit on their retirement documentation shrunk considerably.
It was a combination of the economy tanking, and companies contributing less, if anything at all, to their retirement accounts. Added to that, the stock market , which supports most retirement accounts, took a big tumble. Net worth of everything – companies and individuals — had the bottom fall out.
Even the savviest investor could not prevent what happened in those years, short of taking his money out of the financial markets ahead of time. Any investor who withdraws completely is probably not that savvy. Savvy investors take the ups and downs of the market as an expectation, though no one expected what happened in those years.
So the question becomes not who to blame for the mess. There’s plenty of blame to be spread around among Wall Street, government and, yes, individual decisions. But blaming wastes energy that should be focused on recovery.
We have all had to rethink retirement. Some of us have told ourselves we have to work until we die. Some of those folks may have other alternatives, but they are not seeing them.
Certainly, some of us have said we have to work past the age we thought we were going to retire. That’s fine if you are in good health personally. But don’t think for a minute that your job will be there for as long as you want it. Companies reorganize drastically and often. The younger generation of workers, when they retire, may brag about how many reorgs they survived, just as the older generation is thankful for the steady work they had.
Speaking of young people, they may want to think twice about ASSUMING they will survive every reorg. It’s great to believe, or even be told, how good you are at what you do and how your employer cannot possibly live without you.
But, you can’t always see into the future, especially today. The world changes quickly. Companies are constantly looking at ways to work more efficiently. Lots of good people have lost jobs they expected to have for as long as they wanted to work.
How do we avoid the instinct to cast blame and rethink retirement? First, work on you. Make sure you have a good and optimistic attitude. Remember, those who innovate are usually optimists. It’s tough to see the future properly without believing that all, eventually, will be good.
Secondly, think about the things you DON’T like to do – things that make you “uncomfortable,” or so you believe. Give them a try. Then, try them again, and again etc. This will take you out of your comfort zone, where you may have to go, eventually, to survive.
Thirdly, don’t be afraid to look at something different. The people who lament that they thought they were all set, are many of the same people who tell themselves, “oh, I couldn’t possibly do THAT!”
There are many ways to fight this. For one of the best, visit www.bign.com/pbilodeau. If you leave your comfort zone to look at something new, you may lose the instinct to cast blame for your troubles, and find a way out.
This may not be your dad’s way to retire, but the world has changed. We need to be part of our own solutions, rather than focusing on how we got into trouble.
Think of it this way: the federal government bails out some companies because innocent people would get hurt if they didn’t. But they won’t bail you out as an individual if you get hurt. You have to bail yourself out. You might not only bail yourself out, but prosper in many ways in the process.
Peter
Tag Archives: economy
ECONOMY WILL COME BACK IF WE ARE OPTIMISTIC
Most leadership experts and motivational speakers and authors talk about the power of thought.
We become what we think, the adage goes.
As Frank Daniels III, community conversations editor for the Tennessean newspaper in Nashville put it, 10 years ago, we lived in fear. We had to sleep with an eye open because we had no confidence things would get better. That kind of thinking, Daniels wrote in a Dec. 8, 2013, column, is the most debilitating factor in our economy.
Income gaps between rich and poor are growing. People who want work can’t find it. Some who are working are not earning enough to support themselves or their families.
Technology and other progress helps companies do more with less. But those who lose their jobs because of technological advances pay the price.
All these things are circumstances – many of which we can’t control. But we can control how we react to them.
Though things in one’s past may have been really good, the past is gone. We have to believe that the future is going to better. Author and speaker Andy Andrews, in “The Noticer Returns,” says that perspective is everything. We have to be actively grateful for the good things in our lives. Gratitude begets optimism.
Too many people are walking around with anger, frustration and pessimism. They believe the world and their lives will get worse, not better. Andrews would call this a period of confusion. Things are changing, and we don’t know what’s coming next. We have a choice: we can look at this confusion as opportunity, or we can fear the confusion and try to stay out of it.
Staying out of the “confusion” leads not just to malaise about the world, it will likely seal one’s dismal future. If you are optimistic during this confusion, you will take the action you need to make your life better.
Our thoughts lead to actions. Optimism, followed by action, produces a good life. It may not happen overnight. Our “confusion” can last for years. But we have to see this “confusion” as something we can work through.
The question for each of us, of course, is how does one work through the “confusion.” If you are out of work, your chances of finding another job that pays you what you made before, or better, are slim. It’s not your fault, but you probably will have to think about operating with a lower salary, or do something else to enhance your income.
There are lots of vehicles out there to enhance one’s income without a traditional job, or while working a traditional job. For one of the best, visit www.bign.com/pbilodeau. Consider it a test: if you check out other sources of income, and walk away from them because you are “confused” about them, stop. Perhaps what you are looking at is not “confusing” at all. You may just need to tell yourself, “Wow! I know I can do this.”
So think long, hard and optimistically about your future. Instead of waiting for the next shoe to drop, build a dream board. Instead of believing the world will get worse before it gets better, reflect on the good parts of your life NOW. It will help you see the future in a better light.
We can’t go back to the way things were. But we can go ahead to bigger and better things amid our current “confusion.”
Peter
P.S.: Merry Christmas and Happy New Year to all!
CAPITAL, LABOR AND ECONOMIC FUTURE
Are we, or have we been, moving into a trend in which capital surpasses labor as the economic engine?
New York Times columnist and Pulitzer Prize-winning economist Paul Krugman thinks so.
From the working person’s viewpoint, the economy is still quite depressed. But economic figures are improving and corporations are making record profits. Many of these companies are holding on to their cash for dear life, fearing the investment and regulatory climate now and to come.
Krugman points out that manufacturing is moving back to the U.S. from overseas. He uses the example of manufacturing computer mother boards. They are made largely by robots, so the cheap, Asian labor is no longer needed. Perhaps that’s why we hear that China’s economy is contracting.
But let’s look at the way things are, from where you sit. Chances are, if you are still working, you have at least some fear that your job is going to go away before you want it to. Perhaps you are saving your pennies, and not spending frivolously, in anticipation of being shown the door at work. The U.S. savings rate needed a shot in the arm, for sure, but how it is getting it is quite disconcerting.
Perhaps you are out of work, and have been for a while. You scratch your head because the job you had, which you had thought, or even had been told, was vital to your company just went away. It’s not as if you had done a lousy job at it and were replaced. Your job just went away, and it’s not coming back.
Meanwhile, you hear about record profits for companies and wonder why they are not putting some of that money back into their operations, i.e. in creating new jobs. Well, they probably don’t have to. Technology has improved to the point at which machines replace people in big numbers. No matter how much money they have, companies will not create jobs they don’t think they need. Some will actually cut jobs they should maintain.
This phenomenon is detrimental to what we know as the middle class. Because those with the capital have political benefactors, they may be creating a political system that lets them get richer at others’ expense. When the successful are protected in this way, the less successful become more vulnerable. As Krugman says, we’re not talking about a gap between the educated work force and the less educated. In this milieu, EVERYONE gets paid less. When the less successful become more vulnerable, they not only get paid less for what they do. They pay more for what they need.
INHERITANCE TAXES CAN HURT
Krugman says that the rich also are fighting to eliminate inheritance taxes. He may find some disagreement here, because inheritance taxes can prevent family businesses from being given to future generations of that family. Sometimes, families have to sell their businesses to cover the tax bill, and there is something wrong with that. On the other hand, there could be large amounts of wealth being easily transferred to people who are already wealthy, without adding to the economic engine.
If this trend of forced idleness continues, it bodes ill. Look at what is happening in other countries, where young, often educated people can’t find work. Such free time among a disgruntled group can lead to all sorts of bad things.
However, in all this, there is good news. There are lots of ways out there to make money, without worrying about having a traditional job. To check out one of the best, visit www.bign.com/pbilodeau. Hear and see the stories of how average people are making above-average incomes, and helping others do the same. It also attacks the notion of paying more for what one needs.
So if you are working, think about your plan B. Savings will certainly help you, but they may not cover all your bills without a paycheck. If you are not working, don’t be discouraged. Check out one of the many opportunities there are, through which average people, regardless of education, are prospering. Sometimes, becoming successful just requires being open to looking at something different.
It has been said that the best way to help the poor is to not be one of them. The best way to fight the capital vs. labor battle that Krugman illustrates is to find ways to generate more real capital. Kurgman calls the capital guys robber barons. If you help people prosper with you, that’s makes you a benefactor.
Peter
CIRCUMSTANCES BEYOND YOUR CONTROL
The Libra horoscope for Dec. 8, 2012, read: “Don’t waste time speculating about how you would perform in other circumstances. Focus instead on the circumstances you’re in now.”
That horoscope was published in The Atlanta Journal-Constitution.
Not everyone takes horoscopes seriously, of course. But this one has a resonating message.
It makes one think about the difference between wishes and dreams.
A wish is something you want, but usually can’t get. A wish is usually something that depends on circumstances to come true.
A dream is something a person can ACHIEVE, regardless of circumstances, if he really wants it.
A dream is usually something a person creates, along with the way he’s going to achieve it.
Circumstances are none of your business. You can’t control most circumstances. Circumstances result from things that happen beyond your sphere of influence. What takes place in your sphere of influence is how you react to the circumstances around you.
For the last three years, the economy has been in the pits. Lots of folks lost jobs. Some still have not gotten new ones. Others have gotten new ones, but at far less than they were earning before they lost their original job.
Jobs are circumstances. They do not belong to the job holder. There is no entitlement to work. Jobs will come and go, through no fault of the job holder. Some will never come back, either to the job holder or anyone else.
Job holders can’t wish for time to go backward. They have to deal with new realities. They have to face the fact that the job that took care of their lives and families is gone. It would be the same as if a hurricane, or other natural disaster, wiped out one’s livelihood, home or entire town. You may have known it was coming, but you never really know how bad it’s going to be until it hits YOU.
CIRCUMSTANCES ARE LIKE THE WEATHER
Most circumstances, like the weather, are beyond your control. When a boxer faces his opponent in the ring, he knows he’s going to get hit. He can do a lot of things to prevent himself from getting hurt, but he can’t prevent everything. And, he certainly can’t prevent his opponent from swinging at him.
We all face certain circumstances. We can’t wallow in the misery, and expect to come out better. We have to DO something to make things better. We have to acknowledge what has happened, but not be paralyzed by it. We must look at the bad, yet see the good – or potential good – of any circumstance.
If you face tough economic circumstances, solutions are all around you. You just have to look for them. Lost your job? There are many ways to make money WITHOUT having a job, and regardless of education or background. To check out one of the best ways, visit www.bign.com/pbilodeau.
If you face tough circumstances, think of all that is good in your life. Let those thoughts dominate your mind. Don’t wish for things to be better. Do what you need to do to make them better. Don’t wish for circumstances to be different. You can’t control them. Establish a dream, write it down, and go about achieving it. If you focus on that, after a while, circumstances won’t matter to you. Circumstances can take away your job, home, possessions and surroundings. They cannot take away your dream.
It’s been said to focus on the things you can control. You can’t control most circumstances. You can control how you respond to them.
Peter
CLASS OF 2013: FEAR THE DEBT REAPER
It’s early, but Kyle Wingfield, columnist with The Atlanta Journal-Constitution, thinks it’s time to address graduates.
His October 2012 column suggests that graduates – mainly high school graduates – think about their options before going to college.
Wingfield suggests that they not end up like Katie Brotherton, a young Cincinnati woman who is $190,000 in debt from college and graduate school. She’s living in her parents’ basement.
Brotherton is “looking for answers.” As Wingfield points out, it started with her decision to go to college with borrowed money.
You can envision a pattern: a person goes to college, thinking she would get a good job when she got out. She doesn’t. So, she decides to go to graduate school, thinking it might broaden her qualifications and buy her time for the job market to improve. Meanwhile, she’s incurring more debt.
She gets out of graduate school with no good job and lots of debt. She moves back home. She doesn’t want to be living at home, but she has no choice. Her debt and lack of employment leave her unable to afford to live on her own. Her parents sympathize with her plight, but they, too, would rather see her out on her own.
A few decades ago, we were told to go to the best college we could possibly get into. The best schools would open more doors, we were told. The best schools, often, were usually the most expensive. But if those schools opened more doors, you’d be able to pay back your education fairly quickly with a good job.
Many of the “good” jobs that students thought would be there are not. In fact, they may have disappeared permanently.
As Wingfield points out, education inflation is rampant. There could even be an education “bubble” getting bigger by the day. We all know what happened with the housing “bubble.” It’s not that students should not get an education, it’s that some education does not provide a great return on investment, in terms of career opportunities.
Certainly, there is nothing wrong with getting a degree in history, literature or some of the other liberal arts. No education is really wasted. But students have to evaluate whether that education is worth the debt incurred, or, worth the sacrifices your family might make to provide it.
ARTS, HISTORY MAJORS: YOU HAVE OPTIONS
If you love history, the arts or psychology, you can still pursue them. But you can do so at less expensive schools close to home. You may be able to parlay those degrees into a good career, but you have to understand that most people with such backgrounds cannot convert them to real dollars.
All is not lost, however. You can get one of those degrees without using it as an income producer. There are many excellent ways to produce income outside your educational background. To check out one of the best, visit www.bign.com/pbilodeau.
Even if you have a degree in engineering, the sciences, technology, mathematics or other fields in great demand, you might want to have a Plan B if your career plans don’t turn out the way you want them to. There are excellent income streams that can get you out of your parents’ home as an adult.
So, as Wingfield addresses the class of 2013, he suggests that they not lower ambitions, just understand the reality. Not all college degrees are the same. Most college degrees can be obtained from schools that are not cripplingly expensive. Remember that as you get older and proceed in your career, or life, where you went to school becomes less important in terms of whether you get hired. A degree is a degree. You will succeed largely on your experience.
Success comes in many forms. Being a great historian may not produce lots of income, but it may produce great successes. Just realize that you may have to find another way to make a living, or create wealth for yourself.
Educational institutions need to be aware of the “bubble.” It could burst, and they could find themselves with great, expensive programs, and no students that can afford them. Students need to be aware that there are ways to make an income regardless of education. You just have to be willing to check them out.
Peter