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"IT IS INCUMBENT ON EVERY GENERATION TO PAY ITS OWN
DEBTS AS IT GOES. A PRINCIPLE WHICH IF ACTED ON WOULD
SAVE ON HALF THE WARS OF THE WORLD."
~~THOMAS JEFFERSON ~~ |
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When a market has more money
going out than coming in, the balance of the scale
weighs heavy toward defeat.
BEWARE OF THE BABY BOOMERS
 Watching
Charles Gibson (World News Tonight) the other night
interviewing a woman raising her parents, I was so infuriated I
almost threw the selector at the television. Here was an elderly
couple who worked their entire life during the industrial age to
find out they didn’t make enough money to support themselves. If
the daughter and her husband didn’t let them live in their home,
the couple would be in a state nursing home, or on the streets.
The older couple had worked hard all their lives at middle class
jobs. Social Security paid very little and their medical needs
were high. The daughter was showing Charlie a number of bills,
which covered the table. He asked the lady if this was a year of
bills only to find out it was a months worth. The daughter was
38 years old and hoping she and her husband could have kids to
possibly help them in their later years. With the money and
attention they had to be given to the parents their life was
going nowhere, all the enjoyment they worked for was quickly
passing them up.
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This is not an isolated story,
it’s happening more every day and in the
years to come will grow to astronomical proportions. Look at
Japan as an example. Japan was noted as a country that took care
of the elderly. When the time came the older generation outgrew
the younger one, the news showed pictures of parents being left
in the streets to fend for themselves. The generations of pride
which had been built was thrown out the window because of self
preservation.
WHY IS THIS HAPPENING?
Millions of
workers have based their retirement plans on their IRAs
and 401Ks.
The problem with these plans is they are based on the stock
market which can go in either direction. The government has
taken the burden off employers and placed it in the hands of
people not financially educated to handle it. Even worse, many
of the advisers guiding them know little more than the people
they advise. Many workers I have talked to won’t put money into
these plans because they have lost money in the past when the
market was down. This is creating a generation of people not
saving for their future in any way.
Many people are starting to draw early Social
Security now and it’s only 2009.
By the year 2012 the first
of 78 million baby boomers will start drawing hundreds of
dollars per month from Social Security. Imagine the impact this
will place on the government.
The second storm to hit will begin in 2016. The
reason for this is baby boomers will begin reaching 70 years old
and be forced to start drawing on their 401Ks.
WHAT WILL HAPPEN THEN?
 If
history repeats itself a panic will begin. The market will have
more money going out than coming in. When the market starts
falling in great proportions people could start cashing out
their money placing it in banks, so they will have better access
to it. Human nature has groomed us to protect our livelihood.
If memory serves, when Social Security began
there was about 43 workers providing for 1 recipient. By 2000
the number was about 4 and by 2012 the number could drop to 1
taxpayer paying for 1 or even 2 retirees. No matter what kind of
math we use, the numbers won’t work.
Just think if the government couldn’t pay Social
Security or health care today what impact it would have. Add
millions of more to that number and look at the outcome.
If the market crashes millions of people will
loose their money put away for retirement. What will they do if
the government says we can’t take care of you? Do they go out at
70 or 80 years old and begin looking for a job? If their kids
can’t take them in will they be turned out in the streets, don’t
think this can’t happen.
You can’t change the past, but it is never too
late to prepare for the future. You could be making good money
today, but if you lost your job and couldn’t find another for a
long period of time where would you be? Don’t rely on a job or a
401K to secure a comfortable life style when you become older,
you could find yourself sitting on the street along with many
others.
Why not start looking for ways to beat this storm
before it hits? Don’t be like the ostrich who hides his head in
the sand, it’s time for a new approach to today’s changing
world.
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