Archive for October, 2011
It is great to see people standing for something. Although it is early in the development of the Occupy Wall Street movement, it may yet be a great thing for the country. There is a unique opportunity, not just to complain but to question the very foundation of what we count on Wall Street for.
Should America be counting on Wall Street for their retirement saving? Absolutely not. Markets will have ups and downs for a great number of reasons that don’t make any sense to the investor. Making money trading on Wall Street and making money investing as a retirement plan owner are two totally different things. The biggest difference is a trader can make money on both sides of a trade. A retirement plan investor loses every time their stocks go down in price.
In addition stock prices go down if the company does not reach the targets it set in its quarterly plan, even if makes a huge real profit. You lose as a stock holder and the company keeps the cash. Stocks like Microsoft that have been performing poorly over the last few years still they make tons of cash. Stock value goes down but the company does billions in sales profitably. Sound like a good deal?
There are investments in America that have offered profitable returns in America for the last 100 years. They don’t have all the sexy marketing. They just work and have better tax advantages.
America needs to go back to investing the way it did before 1978 when retirement plans were created. People would be a lot richer without the risk of investing in what they don’t understand.
Do the Occupy Wall Street protestors know that Wall Street is about to shrink on its own over the next 20 years because of population trends? Everyday 10,000 people turn 65 in America. This will happen everyday for the next 20 years. These seniors have more than 65% of the country’s wealth and they are moving it to safety because it’s all they have. In addition to that stat only 3 in 100 seniors has enough capital to retire comfortably. Those three are not taking any risk.
What happens when a country’s baby boomers take their cash out of the stock market, you ask? Japan happens! Their population is 20 years older than ours. When their baby boomers retired they took the money in the Japanese market with them. Their market is 75% below 25 years ago. We will most certainly see the same.
Occupy Wall Street should be asking what is the plan now that the world is making moves to remove the dollar as the favored currency in the world? All of the top world powers have been meeting in secret and not so secret meetings to remove the dollar and create one central currency under one global central bank. This would crush our economy because we are the largest debtor nation and our currency would be worth very little in the world.
Here is a fact to think about regarding the country’s debt. If you taxed every American at 100% of earnings the national debt would still not be paid off. This is the real cost of our 10 year war. It has completely drained our treasury.
The fall of the stock market, the exit of seniors money, the crushing debt, and the change to a global currency are things that are happening for sure. It is no longer conspiracy talk like when we were in college years ago.
If you are marching around with a sign while not seriously considering alternatives to the system itself, you are not making things better for you or your family. It time for these wonderfully intelligent, free American people to start to think!
Please let me know your thoughts! If you think this is worth talking about post it and resend it to your friends.
Wealth Wellness Wisdom
Manager of Wealth
People have taken to the streets because something is really wrong in America and they want change. What type of change they want and from whom is unclear at this moment, but Action is always a good start.
Is Occupy Wall Street the beginning of a 21st century civil rights movement? My answer is Possibly with a smile. I smile because although we have revised history to make ourselves the most moral people on the planet earth, the truth remains that we are far from completing the goals of the 20th century’s Civil Rights Movement. The truth is America ALWAYS takes a very long time to do the right thing. And lots of people get hurt in the meantime.
We are the country that wiped out most of the native people who were here before us, kept slavery in effect for 4 centurys, called the country free in 1776 but didn’t allow women to vote until 1920. Of course we didn’t have a Voting Rights Act until 1965. It took until 2011 for Gay Rights in the military. And yes we used to have children working in coal mines because our child labor laws were terrible for the first few hundred years. I could mention so many things that are basic human rights in the country that took way too long to come to pass but you get the point. We can see injustice and keep going along with it better than anyone on the planet but once we decide to do the right thing we want the world to adopt that view and we condemn anyone who is not so enlightened as America.
Occupy Wall Street can build itself into one of the great movements. At its center is the idea that people should have a fair chance in life and not have to worry that the banks and other financial institutions are stealing their futures. It is a great idea that is taking shape but it will take time and those in power will not go quietly.
More importantly those that lead and support Occupy Wall Street should know that they will not be supported in word nor deed by the majority of people who will be helped by their efforts.
The leaders of Occupy Wall Street should be prepared for lots of criticism from the very people they seek to help. Just as Martin Luther King and the civil rights workers did. Just as the women from the womens rights struggle did. Just as the first abolitionist did. They may live and die with high disapproval ratings like King only to one day be remade into champions of all Americans.
Power concedes nothing. This system was not undone by credit default swaps and bad banking. It was doomed with passage of the Retirement Act of 1978 that created the IRA, 401K, thrift savings plan, and 403B. At that moment all of America’s workers became stock market gamblers with no real experience. That moment brought us here because America’s life savings flooded the market and created faux wealth of every type. That is what we must undo.
Slay that dragon and maybe we have a chance to survive. If we keep that system alive and keep training advisors the way we do now with the greatest compensation going to the plans with the highest risk we can not recover.
Will a 21st century civil rights save the people? I have no idea but we should do right because right is the right thing to do.
Will we recover? Yes we will recover, but perhaps not in your life time because in America we take a long long long time to do the right thing.
Wealth Wellness and Wisdom
Manager of Wealth
I’m going to make this super short so that you can hear me through the noise. A confused mind often opts to do absolutely nothing and so what you can count on is that most people in America will do nothing as their money evaporates in their retirement plan. Occupy Wall Street will not change that. When people get scared they usually do nothing but stand in one place and wait for the train wreck to happen.
Data from the social security administration says that only 3 out of every 100 working people retire securely with enough income to not be totally dependent on the government for the rest of their lives. That means we have a 97% chance of failure and it’s largely due to not knowing enough and making the right choices. 97% of people are good, decent, hard-working people. But they can’t retire well because every few years they lose most of their savings in the stock market. This will be the legacy of the tax deffered retirement plan. Write that down because in the future it will sound profound. It’s not profound but you can’t hear the truth of this through all the noise.
Our advisors were trained to believe in a plan that has a 97% chance of not working out. This doesn’t make your advisor a bad person.
This doesn’t make you a bad person.
You will be like most of the 97% who thought they would make it without being properly educated and taking the right steps to secure themselves.
Truthfully, you can’t earn enough money to buy your way out of knowing what you need to know. Being rich now doesn’t make you wealthy in the future. In fact, if it did there wouldn’t be a 97% failure rate. If being rich now secured your future then the success rate would be over 25% for American Seniors. But its only 3%.
What ever you do don’t just stand there and do nothing! Think and act. A huge train is coming down the track.
60 Minutes told people two years ago but most are still just watching. http://www.youtube.com/watch?v=q8C1ZUrYhC0
Wealth Wellness Wisdom