Why you can't seem to get ahead
Ever wonder why you feel like you cannot get ahead financially speaking? There are invisible forces working against you. Yes, the financial deck is stacked against the middle class and they are in a desperate struggle for their financial future.
I’m deeply concerned about the direction of our country and the financial impact on the average household.
We are bombarded by the media, bullied by financial sales people, and conventional wisdom about money is failing us. The lessons of the past no longer serve us in the economy we face going forward. We know we cannot live on 1-2% interest rates when we retire - forcing us to take more risk with our money as we age. To make matters worse, 76 million baby boomers are rolling through retirement, signing up for government programs at a rate of 11,000 per day. As they liquidate their positions in equities and down size their homes this will put additional deflationary pressures on the economy. They are entering the lowest spending days of their lives and will continue to spend less as they age… more pressure on the economy.
The deciding factor on your success or failure isn’t the rate of return you earn on your investments yet this is what the financial industry tells you as they are in the business of selling RISK… not guarantees. The primary factors that will impact your future is your reaction to the economic reality before you not the rate of return on your investments, or how many times you re-balance or asset allocate your portfolio.
Here is what you are up against:
The Demographic Shift:
An Aging Population - 140 Million people will be turning 65 over the next 25 years. 1:7 people on earth will be over the age of 65 by the year 2030
A declining workforce - Few and fewer people paying into the system
Nearly 50% of the population receiving some kind of government benefit or welfare.
Out of Control Government Spending
Trillion Dollar Deficits (or 4-5 trillion during the pandemic)
Nearly 25 Trillion in Debt
Depreciation of your monetary units - Purchasing power decreases over time. The dollar has lost over 95% of its purchasing power since decoupled from the gold standard. Your money is never worth more than it is today.
Inflation - the government will literally print money out of thin air using the Federal Reserve to overcome its deficit spending
Higher Taxes - You are likely in the lowest tax bracket you’ll ever be in for the rest of your life. The only way to be in a lower bracket is to not have any money - not a good plan. Not just federal - increases in state and local taxes have outpaced wage growth by 40% over the last decade.
Less Benefits - Your government benefits will be cut, inflation increases for income will be less or frozen, you’ll likely pay more for social medicine especially if you are financially successful.
Low Interest Rates - as far as the eye can see. The governments of the world, including the US cannot raise rates without crippling themselves. Rates are expected to be low for a very very long time. This is good for credit seekers. Bad for retirees and savers.
Then there is just life:
Wear and Tear - your stuff gets worn out and needs to be replaced - often at a higher price. These are things like the roof on your home, tires, appliances, clothing, and the list goes on and on.
New products and services - these represent a transfer of our wealth potential as we buy things that we need and want in our lives. Is there anything you own today that didn’t exist 10 years ago? Is there anything you’ll want to own or do in 10 years that doesn’t exist today?
Improving your lifestyle - We want our quality of life to improve - not go backwards. Keeping up with the Joneses is a constant pressure on our cash flow and wealth potential.
Unforeseen Life Events - things you just didn’t see coming - a sickness, a death, a disability, a lawsuit, a job loss, a divorce, a pandemic? These can wipe you out if you aren’t financially secure.
So, how do you fight back and win?
Here are the ingredients:
Financial Knowledge - Knowledge is correct belief about how money really works. Knowledge is what you learn.
Wisdom - The ability to apply that knowledge in your everyday life with prudence and discernment.
Vigor - the passionate, persistent pursuit of your goals. It is the energy behind the actions you must take.
Where do you get the Knowledge you need?
There are many sources of financial information but information is not knowledge. You must also understand the sources and their agendas.
Financial Institutions - their information is designed to get you to buy their financial products. Their goal is to get you to give them as much of your money as possible for as long as possible and give it back to you as slowly as possible. How does this align with your goals? It might, it might not - just know that products are tools not solutions.
Friends and Family - They mean well but they lack the education and their advice is usually anecdotal based on their own experiences. They will tend to give advice through the prism of their own lives. Also, their information is usually out of date and based on conventional wisdom that might not hold true any longer.
Academia - Financial knowledge based on fact, truth and science keeping in mind the psychology and behavioral tendencies of human beings. This is where you want your financial information to come from. The challenge is having the wisdom to determine whats right for you and apply it in your life.
Financial Excellence is a resource using an academic approach to financial coaching.
The combination of spreading financial literacy (Knowledge) and coaching (Wisdom) to help you win the game of money. We start with identifying your values and goals so you can find the motivation (Vigor) to do the things you need to do - to see it through to completion.
You can handle just about any HOW for a big enough WHY!
We put ourselves in your shoes with your financial situation and then apply our knowledge and wisdom to help you learn and decide so that you can make better decisions that align with your values and goals, achieve financial balance between living for today and saving for tomorrow - between you current life and your legacy. The result is more clarity, control and confidence about your money. The reward of this process is self-esteem. You feel better because you are doing the right things for the right reason. The reward of that just might be peaceful bliss and happiness.
For personalized 1:1 coaching click ‘Coaching” and sign up for your FREE initial session to learn more and decide if its right for you.
Take your self administered assessment called the Financial Excellence ScoreCard - for FREE.
Purchase our Workbook if you want to go it alone and apply our knowledge to your situation. Its a good place to start before coaching as well.
Keith Kail - Founder Financial Excellence