The Savings Dilemma

“All my money is in a savings account. My dad has explained the stock market to me maybe 75 times. I still don’t understand it.”

— John Mulvaney

The savings dilemma is REAL.

Someone should tell John Mulvaney he’s losing money with it sitting in a savings account… Unless it’s a very special, very high interest savings account.

And even then…

I’ve been babbling about this for years… Most people I know are tired of hearing me talk about the retirement crisis.

I’ve also written quite a bit about it… Like here and here.

I don’t generally watch fox news, but even THEY got this right…

And here’s what that can actually look like via a PBS piece from June 2016…

 

Still not convinced?

How about this…  

savings dilemma

 

And this…

savings dilemma

 

Granted this statistic was as of 2010 (it’s currently 2017), but do you know a lot of people who have been able to do a lot better with respect to saving since 2010?  Especially those in the lower income quartiles? If the first chart is any indication, the savings rate is going in the exact WRONG direction.  

“I’ll just keep working” you say?  

savings dilemma

Just make sure you’re prepared to do so at a lower rate.

Ahhh… but you can do just fine on Social Security yes?  Well have a look at this statement taken directly from the 2017 Social Security Trustees’ Report:

Social Security’s total income is projected to exceed its total cost through 2021, as it has since 1982. The 2016 surplus of total income relative to cost was $35 billion. However, when interest income is excluded, Social Security’s cost is projected to exceed its non-interest income throughout the projection period, as it has since 2010. The Trustees project that this annual non-interest deficit will average about $51 billion between 2017 and 2020. It will then rise steeply as income growth slows to its sustainable trend rate as the economic recovery is complete while the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

 

Hmmm… Looks like Social Security will soon have substantial problems of its own.  

I don’t know what the right answer is for you…

Should you look into starting a small business?

Yes.  

Should you think about franchising?

Yes.

Should you batten down the hatches on your retirement investing and learn simple trading principles?  

Hell yeah…

The point is do something

Now.