Protect Your Income Well into the Future
Gary Scott writing on financial freedom…
The old economic era where we had long-term jobs and relied on pensions is almost gone…but you do not have to trade down.
You can have an even better life with a micro business in this new economy, because small is now big.
The millennial generation has already adapted. They do not expect corporate care. Their careers are “their own brand”. They just plan to change jobs frequently.
The technology-driven global economy has changed the way to work and earn. Whether employers want to keep workers or not, economic forces leave employees feeling that companies lay off employees with little regard for loyalty. Few of these businesses offer full health and retirement benefits.
Some big businesses try to protect their workers. We have seen examples of this near our North Carolina farm.
In nearby Kannapolis, Cannon Mills was famous for “Cannon Towels”. Formed in 1887, the company offered cradle-to-grave job opportunity. By 2000, their largest buyer, Wal-Mart, encouraged them to move production overseas. The company refused, was undercut by overseas competitors and went bankrupt. All jobs were lost.
Thomasville Furniture Industries, another North Carolina business that started near the end of the 1800s, made the shift. The dot.com bubble collapse forced layoffs and plant closures but the company survived, leaving at least some jobs intact.
Government jobs are not safe either. When Detroit went bankrupt for example, retired Detroit employees accepted pension reductions for the promise of reduced pension checks for the rest of their lives.
The promise was based on payments that equal more than twice the city’s current income-tax receipts. The pension needs investment returns averaging 6.75% a year, a promise that probably cannot be kept.
Public pensions everywhere are at risk. Twenty countries of the Organization for Economic Co-operation and Development (OECD) have promised retirees over $78 trillion, almost double the national debt of those 20 countries. Much of these pensions are unfunded.
Corporate pensions, even those guaranteed by the U.S. Pension Benefit Guaranty System (PBGC) are underfunded as well. In 2003, the Government Accountability Office added PBGC to its “High Risk” list of agencies…and it remains there. The 2015 report shows a net accumulated deficit of $61.8 billion, an increase of over $26 billion in one year. Estimated PBGC exposure to future losses for underfunded plans is $184 billion.
Even if the PBGC could meet obligations, most pensioners lose. The maximum PBGC benefit for retirees aged 65 is $55,840.92. The younger the person, the greater the loss.
Fortunately, many of the same forces that create these problems also create opportunity.
Broadband and internet marketing technology allows micro-businesses owners to live anywhere but be able to zero in on the like-minded souls, everywhere, who most likely want their products and services.
This shift makes small better in business. Instead of watching our lifestyle step down, we can step down the size of our business and watch profits rise.
We can see small winning every day. Even the biggest business giants are thinking small. Wal-Mart for example has sharply slowed openings of its superstores in the U.S. The company has shifted its focus toward e-commerce and smaller stores.
Trading down has always been a retirement-planning staple. Now the concept is better than ever before but in a new way. Instead of trading down into a diminished lifestyle we can expand the joys of life. Start a micro business that turns your passion into profit. Use technology to reach small, highly defined audiences of like-minded souls. You can create a pinnacle career through a microbusiness that brings everlasting wealth.
Editor’s note: Gary A. Scott has been writing on global investments and business for almost 50 years. He conducts online workshops and seminars on natural health and wealth through his website, www.garyascott.com. He spends his time between his farm in North Carolina and his summer home in Florida.