Reverse the under saving, over spending course you adopted during exuberant times when ‘more’ meant more stuff, more space, more power, more debt, and more stress.
Because wanting more seems like a natural inclination of a consumer culture let’s stay with the ‘more’ theme. But this time gear up to more that would support and sustain the chance of actually creating a lifestyle that is not only possible but also highly probable if you manage three simple things.
1. MORE AWARENESS OF YOUR SPENDING
For starters, be blind to fashion and fads. Resist the ‘external’ influences that propel your spending on these products where satisfaction is short term. It is a fact that we are as strongly motivated by our interdependence (what others are wearing, doing, buying) as we are by our independence (values, dreams, interests). So be watchful. Smart people can do dumb things especially with their money.
Think. Don’t flip into autopilot when shopping. Don’t bring home bargains you don’t need. These are never a good deal. Wanting and getting don’t make them so.
2. MORE AVOIDANCE OF DEBT
Debt financing went ballistic pre 2008. Everyone was doing it. This was the “social proof” that it was an okay thing to do. Your intuition likely offered an opposing view but you ignored it as did so many others. Now, you dare not avoid the warnings if you want any chance of having an enjoyable lifestyle. Debt kills if it’s the wrong kind…the result of financing short term comforts, disposable stuff, and depreciating assets. A budget will help you identify where your money goes on these things. See below.
3. MORE FINANCIAL EDUCATION
Get smart. Start with an understanding of budgeting by doing one. It doesn’t matter whose system you choose. Just begin. It will help you manage your spending more strategically. The game plan is simple; spending on what really matters most will ensure you get to have a lifestyle worthy of your level of income.
Learn more about car financing, mortgages, and pensions. The pay off from financial literacy may be the best dividend you’ll ever get.
Copyright 2010 William M. MacKay
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( 3 / 157 )Are you banking on Obama for your retirement security? Don’t.
He may be going after the banks but what’s coming after you retire?
That we will see a return to the “good ol’ daze” is a fantasy. Nor should we want to. What existed before was about as stable as a recovering alcoholic.
SYSTEMIC PROBLEMS ARE POLITICALLY INTRACTABLE
The cost of health care was escalating. Defined benefit pensions were disappearing. Job security was as good as your next pay check. If you had a house you probably borrowed against your equity to keep up your standard of living.
So what’s the state of your national retirement system? The Mercer Global Pension Index gives a hint with their ranking based on adequacy, integrity, and sustainability.
Netherlands, Australia, Sweden, Canada, UK, and the US are the top six. The score gap between the top 5 and the US is about 20%.
That’s not a great starting point for any return to normalcy now that we’re told the recovery has started.
MORE MEDIA SPIN
So what’s going on that’s any different than before the Great Recession? We are told that consumers are avoiding debt like the plague. You’re likely to hear people wincing in pain if you believe all the reported belt-tightening that is presumably occurring in homes across the land. I don’t believe it. Debt to income ratios are monumental.
Frugality, thrift, and a wave of rational scroogenomics is also apparently gripping the population. There is a deluge of new books on the above pushing the ‘get rich quick automatic wealth you deserve because the Almighty says so’ right off the shelves.
Just as there was no warning from the experts before the last financial collapse there will likely not be one next time either. And it’s okay because I think we finally get it.
The leaders, the pros, the gurus, and the Wall Street analysts are not as smart as the crowd. Here’s the proof I need.
NO. 1 RANKED FINANCIAL CONCERN IN RETIREMENT
A ranking of what people care about most in their retirement years is instructive. The number one financial concern is simply this; “keeping up with daily expenses for food, shelter and other basic needs”. It ranked at 65.2%, up from 50% in 2008.
WOW. What happened to the wish list we all dream about? Sadly, enjoying life came in at 14.4%. (Hartford Investment and Retirement Survey 9/09) But in a positive light it looks also like people are becoming more prudent, more realistic about the fragile state of the future.
I KNOW YOU KNOW WHAT TO DO
If your lifestyle wish list goes beyond hand-to-mouth body basics it’s time to do something. Anything would be advised that improves your self-reliance, minimizes financial risk and, most of all, gives you a better chance at living your dreams.
Copyright 2010 William M. MacKay
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( 3.1 / 164 )Shows of responsive governance and personal leadership give Obama media visibility as he commits and expedites disaster relief to this utterly broken country.
But only time will prove if it takes the focus off domestic unemployment, bankers’ shameless behavior, and all the other ills facing his Presidency. Notable in this context, is America’s national debt.
Haiti’s corruption takes many forms. Most visible today is the most tragic…the physical decomposition before our eyes of the dead and dying citizens of that failed state.
By any measure, it is clear for all to see that the previous $6 billion in US aid funneled into Haiti vanished through its culture of nepotism, cronyism, and embezzlement at the highest level. The people got nothing.
Will the cost of the promises Obama is making to Haiti be another albatross around his re-election neck?
The enormous costs and the decades-long effort that will surely be required to make today’s promises come true are a gift not only to Haitians’ but sadly also to his opponents.
Here again is another issue the right will leverage to attack the cost of all things liberal that will cause taxes to rise on the backs of taxpayers as does health care reform and the ongoing war in Afghanistan.
The abuse of entrusted power for private gain will be a central issue behind the politics that will defeat Obama.
The major banks and Wall Street continue their legal corruption, debasing their own integrity and abandoning any moral obligation to the system in the race for corporate profits at any risk.
Corporate Boards of Directors license what would be graft in non-financial industries if the obscene compensation, incentives and stock options were not part of CEOs and other employees official pay.
This was the Reagan dividend. It was ably facilitated by lawmakers advised by the old boy network of Goldman Sachs senior management and others (as Wall Street influence-peddlers). The enablers were university economists who sold their unproven theories as gospel.
Lack of accountability and weak oversight by regulators has undermined democracy because it is built on trust. The bail out has also forced a massive economic distortion which has raised the cost of government.
It has also infuriated many who want revenge on the selfish, overpaid few who have destroyed their lifestyle and almost their country. The sub prime mortgage fiasco is far from over.
How tolerant will voters be if they don’t see some street justice?
Copyright 2010 William M. MacKay
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( 3 / 140 )The white knight of the Democratic Party and world peace is fading to grey. Here’s why.
1. AL QAEDA IS WINNING
Denials to the contrary are silly. Our lifestyle is being forcibly changed. America has put up walls and is building them higher. The global air travel industry and its passengers bear the cost. Watch for more airline bankruptcies.
Full body scanners are the next incarnation of defense. Interesting, isn’t it, how so many of these machines are suddenly available for deployment around the country. The underbomber was a timely excuse.
Afghanistan is taking lives. Seeing this as something else is an extraordinary delusion.
2. HEALTH CARE REFORM WILL FAIL
It is flawed from the start to involve private insurers because they are risk averse, as insurance companies should be. If they weren’t none of them would exist in any field as a way to protect our assets/lifestyle from possible loss/reversal.
There will be unintended consequences if you thwart insurers’ natural right as profit-based, private enterprise to mitigate the costs of insuring bad risks.
That’s where a public system can spread risk over hundreds of millions to give sick people a fair and affordable insurance through national taxation. And at less cost to the healthy and rich when a one-payer system operates to control inflation and fraud.
3. GOLDMAN SACHS PULLS FINANCIAL LEVERS
Where exactly does control of the financial life of America actually rest? The Sachs’ SWAT TEAM and the Federal Reserve dominate the action. To a dangerous extent government has relinquished power to private hands and bankers. Again, anticipate the regulators failing to regulate for the public good in favor of corporate interests.
This will continue the trend to socialize losses and privatize profits. And how about those bank bonuses this year! Don’t count on hearing much about what GM execs pocket. Some sweet deal for a publicly owned company.
4. AND THEN THERE WAS CAPITALISM
While there was no day of mourning for this particular ‘ism’ (even with its ugly parts) it is a sign of “the times they are a changing”. When Bob Dylan sang that line a generation ago the divisions in society were different but the fundamental principles were the same.
This is the delicate and fragile balance between public trust and democracy and our willingness to participate in it. This is an important link to our financial problems and the growing elements of public administration that lack transparency.
To recap briefly, the free market exchange of goods has social benefits. No debate here. When the link is broken we the people are offended and even outraged by the failure of the system to punish bad behavior. Few went to jail. Were their activities legal?
Think bonuses for Wall Street and the bailed-out banks. Our outrage became anger at one point pushing us close to the pitch-fork stage of democracy for very good reasons. This is where the madness of crowds was legitimate.
We saw failure rewarded with unbelievably extravagant payoffs for the very people who were seen to have destroyed a way of life and led the world to the edge of the precipice. More of the same is likely. The casino is still open.
5. TRANSPARENCY IN NAME ONLY
Who has not heard of someone’s request for information from the government that has been denied? Surely, most of us. And on what grounds is this request denied?
Politicians lack creativity here usually claiming issues of national security. Obama’s recent use of the “war” word that Bush always hid behind sets the stage for more ‘TOP SECRET” stuff around everything.
Politicians (and corporations) know full well when they have tried and succeeded in taking advantage of us. That they have engaged in obfuscation, lies, and sharp dealing and know it to be wrong is why there are so many blocks to transparency and our demands to know the facts. If we knew the truth we would punish them.
Trust, the other ‘t’ word, runs parallel with transparency as a gauge of our willingness to believe and cooperate with the requests, programs, and laws our government ask for or enforce.
SOME HOPE
Today, my confidence is sinking. The gap between trust in government and transparency is widening. That’s the truth.
My hope in Obama to create even a modest improvement in this new decade has dropped to a new low. Hope for the system is at record lows.
Copyright 2010 William M. MacKay
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( 3 / 167 )Where is the ‘best place’ to be as we depart the old year and arrive at the new?
Is it a place where you hope to be next year? Many would be justified in wanting an upgrade given the year they’ve experienced.
Maybe it’s a new home or even just a place to live, worry free. Perhaps it’s the top ranked country cited by the UN and other rating agencies.
But I doubt it’s a place at all.
I’d put my money where my heart is…the place where I can feel the way I want to feel. Seriously. It’s that simple.
In fact, if you don’t have a clear picture of that ‘place’ (the feelings that really matter most to you) no amount of moving from one country, city, home, or job can make any sustainable difference. No amount of stuff or bigger screen TVs will be enough.
It’s funny how few people get beyond this accumulation of stuff and ask what it represents to them. But when you push that question as far as you can and dive deeper into the real value behind what you bought trust that you will be rewarded.
You will discover that the place you love most is any ‘high’ that gives you pleasure. The joke is that these highs rarely can be bought. For the most part they cost nothing. They are the gifts of being alive and the gratitude we have for the people who share them with us. I call these my ‘passion absolutes’.
Good friends. A loving partner, child. A devoted pet. The joys of nature; beautiful sunsets, oceans, mountains, trees, and the wild life that run through my woods. The miracle of spring’s first flowers pushing up through the snow (at least where I live) is a sight I never tire of seeing every year. At my age I am counting the number of times left that I will experience this pleasure.
These feelings are the place settings for happiness. They are the true markers of success. Of course, having a million dollars doesn’t depreciate this quality of life. Poverty is not a prerequisite to happiness.
Whatever your goal make sure you understand where that place is for you and why you are spending what you do to get there… to enjoy that feeling, that high that makes it all worthwhile. Challenge yourself to analyze what those things you purchase represent to you. Are they the best investment of your income to get what they represent?
Quality of life is what makes you happy. Not what others want you to have.
Feeling the way you want to feel is what matters to you. That’s the best place in the world.
Copyright 2009 William M. MacKay
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