Just a brief reminder — you very rarely get a second bite at the retirement planning apple. You’re 35? Good on ya. Here’s a bulletin: Time, regardless of how immortal you may feel today, simply isn’t your friend. Don’t believe me, believe those who’re 45 at your company. If they started contributing to their company’s Qualified Plan (401(k) ) when they were 25, by the time they’d passed 40, they were feelin’ like world beaters. Time? They had 15-25 years to grow their already impressive portfolio just a few short years ago.
Wonder what they’re thinkin’ now? The lesson all of us learn as we age is that time, like the tides, come and go regardless of anything else in the universe. We all get caught in the backwash of Black Swans at least once in our lives.
Time can be our best friend or our worst enemy.
Doing things on Purpose with a Plan is the best way to go, but still not immune to life’s curve balls. Those who listen to the pros consistently, who don’t go their own way due to intuition or what they believe is local knowledge, will win in the long run. Why? Cuz real boots on the ground analysis trumps so-called intuition and what passes for local knowledge every time. The idea is to keep prudent cash reserves, think big picture combined with long term, and understand almost all of us will take their turn in Murphy’s barrel.
Treat what you do for your retirement as always being the potential victim of time. Plan Plan Plan, but be able to back your play. The Sominex Account (cash reserves) is not a luxury, and few can afford not to have it. Very few — and as exceptions they tend to paradoxically ‘prove’ the rule. Take advantage of every bit of expertise your pro has to offer. The more tools you have, the better off you’ll be, which brings me to the BawldDefinition of an expert.
An expert not only has all the knowledge, expertise, and experience you expect, they also consistently answer questions you would’ve never known to ask, and provide alternatives you never knew existed.
My good buddy Tom Vanderwell and I were talkin’ the other day about what the offspring of Boomers might take away from our current ‘interesting times’. He thinks they may emerge much the same as their Depression age relatives did — living financially as if another Great Depression could happen at any given time — and probably would.
On the other hand, I think they’ll come out of all this with a much better sense of what financial living is all about. I believe they’ll be far better for all this. They’ll be much less vulnerable to the philosophy which has always said, “Those who die with the most toys wins.” I’ve always loved the rejoinder to that way of thinking.
Those who die with the most toys — are still dead.
I believe Boomer generation’s progeny will be analogous to tempered steel with this current learning experience under their belts. Not having been forced to brave the extremes their grandparents and/or great grandparents endured in the 1930′s, yet experiencing genuinely hard times, their thinking will be forever enhanced by the wisdom gained because they adjusted to reality, and therefore emerged intact. They will have shown themselves how truly adaptable and mentally tough they really are.
There are very few more valuable gifts than that.
I firmly believe Boomer’s children will be revealed as resilient, adaptable, and most of all tough — American style tough.
I’d love a chance to answer some questions you may not have known to ask. Gimme a call at 619 889-7100 and see if that doesn’t happen. Have a good one.
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Good article. I’m young but investing in this market (no matter what asset class) seems like a coin flip right now. It’s very hard to suck it up and buy stocks that were trading at a fraction of what they are were only 5 months ago.
The REITS still look very depressed and I’m looking at those for a personal investment in lieu of actual properties. Like Kimco.
Jeff – Good Post!
I think most of us including me will have learned something during the current economic downtown.
My father lived thru the Depression – his family lost their home in Boston when he was a kid – and my Dad’s relationship to money has always been very different from mine. The Boomer generation of which I am member came of age at a time where we believed it was America’s destiny that each generation had a better life than the one before. We now see that may not be true.
I am intriqued by your suggestion that today’s generation will become tougher like tempered steel because of this experience. I think the jury is still out on that idea! In my humble opinion, Boomer kids have been spoiled more than even the Boomers were. The sense of entitlement is very prevalent amongst the younger generation. Our school system has been dumbed down. When I was in high school, a term paper was a term paper 20 to 25 pages. Today, a term paer is a 4 page essay.
There also seems to be an attitude that kids today live in very tough times (the Iraq War, global wamring or is it now cooling – oh, we are not sure so let’s just call it climate change and then we are right no matter which way the temperature goes, the current job market, etc).
I believe we have very short memories. I was a teenager in the 1960s. During that time, we had the Vietnam War (compare lives lost in Vietnam to those lost in Iraq – not even close), JFK Bobby Kennedy MLK were all assasinated, we had civil unrest and protest (many folks got hurt and killed in our march towards freedom for all of us and as our nation moved closer to racial equality, widespread use of drugs became part of our culture, we practiced diving under our desks at school in hopes of protecting ourselves when the Russians dropped atom bombs on us (we see now what an absurd option that was) – to be dramatic but fitting with the drama todays media creates, we were on the edge of nuclear destruction.
So really, what was a more difficult time for our nation – the 1960s or now?. To me the answer is obvious – what is going on now pales in comparision to all that we went thru in the 1960s. I would also suggest our nation made far greater strides on many fronts in the 1960s than we have in the 2000s.
So when I hear people whine about how tough things are today, I just shake my head. In my humble opinion, until some attitudes change and folks see the past and present more clearly I am not feeling as positive about the next generation as your post seems to indicate.
Of course, each person is different but as a whole I believe my characterizations of the two time periods and the way folks think about them is fairly accurate.
I know my rant has little to do with real estate. But until we get some perspective about the current times and stop acting like chicken little, I have cocnerns about the direction our country is headed.
Keep up the good work Bawld Guy!
Hey Arn — Your assessment of then and now is accurate — until you appraise how it actually affected you and I and our peers. (I graduated high school in 1969.)
Everything you said about the 60′s was on the money. That said, the basic everyday life of Boomer kids wasn’t changed. That doesn’t discount the seemingly never ending traumatic events of that decade. Major multiple assassinations, the draft, the war, was concentrated into a mind numbing decade.
There was no cataclysmic economic train wreck then as there is now. Not even close. No friend or family member I knew ever lost their home. If they lost their job they simply got another one and moved on. Friday night football followed by dances in the gym continued without abatement. There was not soul wrenching financial upheaval that touched kids back then. It simply didn’t happen.
Today however there are teenagers and their older siblings who’ve watched their parents deal with lost jobs, moms working, foreclosures, not being able to do some or all of the ‘must be there’ social activities of American youth. The 20-30 somethings today have been affected financially almost orders of magnitude more than our parents were in the 60′s. They’re learning what their 70-90 year old relatives have been talking about since they were kids at the Thanksgiving table.
I see your point, but it didn’t have the mind changing effect on us as it relates to our financial lives and thinking. It just didn’t. Kids are now doubling up to share living costs. They’re saving at larger rates. They’re working harder. They’ve learned that the so called ‘internet age’ isn’t impervious to the physics of economics. They’ve finally been made to understand they weren’t born with a ‘financial bullet proof vest’, so to speak. As a demographic group, Boomers simply didn’t live that experience.
Our kids have either lived it personally, or seen it through their friends and/or family — unlike their parents’ youth and early adulthood, which went largely untouched as a demographic group.
Am I making sense to you?