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Opinion Editorials

Will you get to retire? Boomers, their kids headed for sad reality

With the Boomer generation and their children on their current path, retirement will not be a reality for many, but there is an answer and it lies within in ourselves.

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Retirement no longer a priority

Considering the country’s last 40 years of economic history, one might conclude that retirement would be a top priority for most people. The 1970s brought us our first run-in with double digit inflation and interest rates. The 1980s began with a prime rate in excess of 20%. There was 14% inflation, give or take. The FHA interest rate hit around 16.5%. Unemployment was 9% — or higher if you believe the real, non-spun numbers.

The 1980s also saw the top marginal personal income tax rate slashed from 70% to 28%. Employment blew up positively, causing the unemployment rate to drop like a rock. The economy recovered, over 20 million jobs were added, and life was good.

Then, in the 1990s we endured the S&L ‘Crisis’. Commercial properties all over the nation ended up being sold for pennies on the dollar. Real estate in general was a no-go. In fact, I’d take it further. For around half that decade real estate was, to use an industry technical term, in limbo.

The only good thing about that decade was that after 10-15 years of drastically reduced taxes, welfare reform, and a reduction in capital gains taxes, our leaders in D.C. Gumped their way into a balanced budget — that is, as long as you didn’t look too closely at their accounting.

Enter the Darth Vader Economy

The Bubble came — had its way with us, and left. It was akin to an economic F-4 tornado following 5-8 years of perpetual spring and summer. In the process, regular folk invested in the Nasdaq, lost the shirts off their backs at the start of the century. I had a couple clients who literally lost almost 40% of their retirement nest egg in that crash. Try goin’ from $500,000 to just over $300,000 faster than you can watch it happen.

Same thing happened on a bigger scale in 2008. Imagine being retired in 2007 when the stock market crash of 2008 hit. Or, how ’bout those poor people scheduled to retire in late 2008? That couldn’t have been a normal Thanksgiving.

The current unemployment fiction says over 8% of us are unemployed. Really? Yup, it’s true. ‘Course to get to that figure those in power found it necessary to remove more than a million citizens from the equation. Seems you’re not unemployed after a certain time period. Who knew?

Rents are now rising while vacancy rates are falling. Not everywhere, but it appears to be a nationwide trend. We’ll see. The percentage of Americans buying their own homes is decreasing annually. Most of us have realized by now, that this isn’t just another economic cycle which will end by completing the circle with a pretty ‘recovery bow’.

The retirements of millions of Boomer-Americans are not only gonna be postponed. Many will never truly retire. They will never stop working. Those who can’t will begin living with family, almost always one of their kids. If not, their kids will at least be providing significant financial support to fill the gap. This will necessarily stretch their kids’ budgets, while simultaneously transferring potential investment dollars to parent care dollars. I realize that’s not fun to read. It’s a whole buncha real though — and like a virus it’s already spreading.

The Catch-22 for Boomers’ progeny

Many have indeed learned from watching older generations in their family retire less than well. The writing on the wall for thousands of Boomers’ kids is that one, if not both their parents will need them as they reach retirement age and older. On one hand they realize they need to prepare seriously for their own retirement. On the other hand reality inserts their parents into their longterm planning. They want to execute a solid retirement plan. But diverting significant investment capital to maintain Mom and/or Dad in their old age acts as a governor of sorts on how effective their plan can be.

What to do?

I hate to put it this way, but it depends. 401Ks are a virtual guaranteed loser. Ditto with IRAs. Let’s not debate those statements. Do your own surveys. Whenever I’ve challenged people to do that, they’re astounded by the fact they can’t locate anyone who’s retired with even a mediocre income via their job related ‘retirement plan’. Real estate investing takes seed capital and capital reserves. Most of ’em believe Social Security is an oxymoronic phrase — and why should be blame them? Pensions are only found (except for gov’t workers) in history books.

The only hope for BoomerKids

They need to face a harsh reality. The government isn’t their mommy. Trying to rob those who spend their lives as magnificent producers in order to fund their own needs is not only a losing strategy, it’s for losers. The majority of our kids better step up to the plate and realize any form of consistent collectivist government is a guaranteed FAIL. Millions are now watching with their own ‘lyin’ eyes’ how low the bar is set when their parents’ ‘Golden Years’ are financed by others’ efforts. Pretty soon those ‘others’ find a way to avoid playing the part of Peter in the Robbing Peter to pay Paul vignette.

Self reliance is the key. It’s what America was known for since its creation. We’re either gonna realize this and correct course, or we’ll pay the same price every citizen of every collectivist government has paid throughout history.  Complete and irreversible failure as a nation. Any nation is only as strong as it’s core beliefs and principles. They didn’t volunteer for this mission, but the offspring of the Boomer Generation will, for good or ill, be the pivot for America, the Idea. If they steer us back to our foundational values we’ll begin to pull back from the cliff’s edge. If, instead, they opt for keepin’ their hands in Peter’s pockets?

They’re not far from livin’ in a world where everyone is a ‘Paul’ and Peter left town. Then retirement will be something their grandparents did.

Jeff Brown specializes in real estate investment for retirement, has practiced real estate for over 40 years and is a veteran of over 200 tax deferred exchanges, many multi-state. Brown is a second generation broker and works daily with the third generation. With CCIM training and decades of hands on experience, Brown's expertise is highly sought after, some of which he shares on his real estate investing blog.

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19 Comments

19 Comments

  1. Roland Estrada

    March 15, 2012 at 2:37 am

    Amen brother!!

  2. Missy Caulk

    March 15, 2012 at 8:48 am

    Excellent, the Google+ button is not working. 🙁

  3. D Evans

    March 17, 2012 at 11:32 am

    401k’s, IRAs and Roths made us millionaires. Use them to your advantage.

  4. Teresa Boardman

    March 18, 2012 at 8:12 am

    some of this rings true but I can’t see children supporting parents. it just doesn’t happen which is a good thing. However I agree that many boomers will never stop working. because of that stock market crash, the recession and the housing crash I will need to work until I am at least 120 years old. Self employment is the only way to make that happen because people who are much over 50 rarely get job offers.

  5. Ryan

    April 9, 2012 at 10:58 am

    Aw, come on those sheep don’t need pensions. They don’t even need soical security. Their well-planned retirements will include vast stores of cat food and Ramen noodles.I read at HuffPo where some Dems in Congress were retaliating with Where are the jobs? since the house majority went to the GOP. Clearly that’s rhetorical because anyone with a pulse knows the GOP is exploiting the current situation without any real expectation of creating jobs despite what they might say at times.So in a political environment where many have drank the Kool-aid informing them that it’s not government’s job to help it is legitimate to ask what will help? and also why the only remedy available to the GOP (after possibly drowning government in the bathtub), corporate America, is not helping either. Isn’t it kind of strange this isn’t asked more? Good of you to point is out. Maybe it will catch on. Maybe the Dem leadership will start to play offense for the first time.Many say that the sheeple never turn their attention to the elite because they someday dream of joining the upper class. The sheeple would rather smack down the ones one rung higher on the ladder than move up themselves. That looks more like they’ve concluded reaching the upper class is an unattainable dream and they’re just spiteful. Clearly they trust the hand that feeds them poorly more than those who say they can change the hand that feeds.They can’t seem to get their heads around how it is exactly the corporate failure to help them that has made the corporate successes possible.

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Opinion Editorials

The actual reasons people choose to work at startups

(EDITORIAL) Startups have a lot going for them, environment, communication, visible growth. But why else would you work for one?

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Startups meeting led by Black woman.

Startups are perpetually viewed as the quintessential millennial paradise with all of the accompanying perks: Flexible hours, in-house table tennis, and long holidays. With this reputation so massively ingrained in the popular perception of startups, is it foolish to think that their employees actually care about the work that startup companies accomplish?

Well, yes and no.

The average startup has a few benefits that traditional business models can’t touch. These benefits often include things like open communication, a relaxed social hierarchy, and proximity to the startup’s mission. That last one is especially important: While larger businesses keep several degrees of separation between their employees and their end goals, startups put the stakes out in the open, allowing employees to find personal motivation to succeed.

When employees find themselves personally fulfilled by their work, that work reaps many of the benefits in the employee’s dedication, which in turn helps the startup propagate. Many aspiring startup employees know this and are eager to “find themselves” through their work.

Nevertheless, the allure of your average startup doesn’t always come from the opportunity to work on “something that matters.”

Tiffany Philippou touches on this concept by pointing out that “People come to work for you because they need money to live… [s]tartups actually offer pretty decent salaries these days.”

It’s true that many employees in their early to late twenties will likely take any available job, so assuming that your startup’s 25-and-under employee base is as committed to finding new uses for plastic as you are may be a bit naïve—indeed, this is a notion that holds true for any business, regardless of size or persuasion.

However, startup experience can color a young employee’s perception of their own self-worth. This allows them to pursue more personally tailored employment opportunities down the road—and that’s not a bad legacy to have.

Additionally, startups often offer—and even encourage—a level of personal connection and interactivity that employees simply won’t find in larger, more established workplaces. That isn’t symptomatic of startups being too laid-back or operating under loosely defined parameters. Instead, it’s a clue that work environments that facilitate personalities rather than rote productivity may stand to get more out of their employees.

Finally, your average startup has a limited number of spots, each of which has a clearly defined role and a possibility for massive growth. An employee of a startup doesn’t typically have to question their purpose in the company—it’s laid out for them; who are we to question their dedication to fulfilling it?

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Opinion Editorials

How Peloton has developed a cult-following

(OPINION EDITORIALS) How has Peloton gotten so popular? Turns out there are some clear takeaways from the bike company’s wildly successful model.

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Man riding Peloton bike with instructor pointing encouragingly during workout.

Peloton is certainly not the first company to gain a cult-like following–in the past we’ve talked about other brands with similar levels of devotion, like Crossfit and Yeti. Now, full disclosure: I’m not an exercise buff, so while I’d vaguely heard of Peloton–a company that sells stationary bikes–I had no idea it was such a big deal.

I mean, it’s not really surprising that an at-home bike that offers the option for cycling classes has grown so much during the pandemic era (a sales growth of 172% to be exact). But Peloton has been highly popular within its fanbase for years now. So, what gives? A few factors, actually.

Vertical Integration

If your company really wants to guarantee the vision and quality you’re aiming for, one of the best ways to enact it is through vertical integration, where a company owns or controls more than one part of its supply chain. Take Netflix, for example, which not only distributes media, but creates original media. Vertical integration lets companies bypass areas that are otherwise left to chance with third-party suppliers.

Peloton uses vertical integration–everything from the bike to its Wi-Fi connected tablet to the classes taught are created by Peloton. Although this may have made the bike more expensive than other at-home exercise bikes, it has also allowed Peloton to create higher quality products. And it’s worked. Many people who start on a Peloton bike comment on how the machine itself is well-built.

Takeaway: Are there any parts of your business process that you can improve in-house, rather than outsourcing?

Going Live

But with people also shelling out $40 a month for access to the training regimen Peloton provides, there’s more going on than simply high-quality craftsmanship.

Hey, plenty of cults have charismatic leaders, and Peloton is no exception. Okay, joking about the cult leader part, but really, people love their trainers. Just listen to this blogger chat about some of her favorites; people are connecting with this very human element of training. So much so that many people face blowback when suggesting they might like training without the trainers!

The trainers are only part of this puzzle though–attending live classes is a large draw. Well, as live as something can be when streamed into your house. Still, with classmate usernames and stats available while you ride, and teachers able to respond in real time to your “class,” this can simulate an in-person class without the struggle of a commute.

Takeaway: People want to see the human side of a business! Are there any ways your company could go live and provide that connection?

Getting Competitive

Pandemic aside, you can get a decent bike and workout class at an actual gym. But the folks at Peloton have one other major trick up their sleeve: Competition. Whether you’re attending a live session or catching up on a pre-recorded ride, you’re constantly competing against each other and your own records.

These leaderboards provide a constant stream of goals while you’re working out. Small accomplishments like these can help boost your dopamine, which can be the burst of good feeling you need while your legs are burning mid-workout. With this in mind, it’s no wonder why Peloton fans might be into it.

Takeaway: Is there a way to cater to your audience’s competitive side?

Conclusion

At the end of the day, of course, Peloton also has the advantage of taking a unique idea (live-streamed cycle classes built into your at-home bike) and doing it first. Plus, they just happened to be poised to succeed during a quarantine. But that doesn’t mean you can’t learn from what Peloton is doing right to build your own community of fanatics. There are plenty of people out there just waiting to get excited about a brand like yours!

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Opinion Editorials

How a simple period in your text message might be misinterpreted: Tips to improve your virtual communication

(OPINION/EDITORIAL) Text, email, and IM messages may be received differently depending on your communication style and who you’re communicating with. Here’s some ways to be more mindful.

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Black woman smiling in communication talking on phone and laptop in front of her.

Life is full of decisions, learning, hopefully some adventure, and “growth opportunities” through our careers and work. One that some of us may have never considered is how our text, email or IM communication comes across to the receiver – thus providing us a growth opportunity to take a look at our own personal communication styles.

It may have never occurred to us that others would take it a different way. After all, we know ourselves, we can hear our voices in our heads. We know when we are joking, being sarcastic, or simply making a statement. The way we communicate is built upon how we were raised, what our English teachers stressed, and even what we’ve been taught through our generational lens.

NPR put out an article recently, “Are Your Texts Passive-Aggressive? The Answer May Lie in Your Punctuation”. This article discussed what to consider in regards to your punctuation in text.

“But in text messaging — at least for younger adults — periods do more than just end a sentence: They also can set a tone.” Gretchen McCulloch, a linguist and author of the book Because Internet: Understanding the New Rules of Language, told NPR’s All Things Considered last year that when it comes to text messaging,”the period has lost its original purpose. Rather than needing a symbol to indicate the end of a sentence, you can simply hit send on your message.”

While it may seem silly that the receiver would think you are mad at them because you used a period, here are some things to consider in our virtual communication now that we are all much more digital:

  • There are no facial expressions in a text except for emojis (which, even then, could be left up to misinterpretation)
  • There’s no sound of voice or inflection to indicate tone
  • We are emailing, texting, and sending instant messages at an alarming rate now that we are not having as many in-person interactions with our colleagues

Gen Z (b. 1995 – 2015), who are the most recent generation to enter the workplace, grew up with much quicker forms of communication with their earlier access to tech. They’ve had a different speed of stimulation via YouTube videos, games, and apps. They may have never experienced the internet speed via a dial-up modem so they are used to instantaneous results.

They also have quickly adapted and evolved through their use of Facebook, Instagram, Snapchat, and now TikTok. The last two platforms are designed for pretty brief attention spans, which indicates our adaptation to fast communication.

Generational shaming is out and uncomfortable but necessary conversations around diversity, equity, and inclusion are in (which includes ageism). You can’t just chalk it up as “those kids” don’t understand you, or that they need to learn and “pay their dues”.

So if you are of an older generation and even a manager, here are some considerations that you can take regarding your virtual communications:

1. Consider having yourself and your team take a DiSC assessment.

“The DiSC® model provides a common language that people can use to better understand themselves and to adapt their behaviors with others — within a work team, a sales relationship, a leadership position, or other relationships.

DiSC profiles help you and your team:

  • Increase your self-knowledge: How you respond to conflict, what motivates you, what causes you stress, and how you solve problems
  • Improve working relationships by recognizing the communication needs of team members
  • Facilitate better teamwork and teach productive conflict
  • Develop stronger sales skills by identifying and responding to customer styles
  • Manage more effectively by understanding the dispositions and priorities of employees and team members

This quiz is designed to help you identify your main communication style. It helps you to be more conscious of how your style may come across to others. Does it builds relationships, or create silent conflicts? It doesn’t necessarily mean you have to change, but you can adapt your style to best fit your team.

2. Always ask your direct reports about their preferred method of communication (call, text, email, IM, meeting).

Retain this information and do your best to meet them where they are. It would also be helpful to share your preferred method with them and ask them to do their best to meet you where you are.

3. Consider putting composed emails in your drafts if you are fired up, frustrated, or down right angry with your team.

You may feel like you are being direct. But since tone will be lost virtually, your message may not come across the way you mean it, and it may be de-motivating to the receiver. Let it sit in drafts and come back to it a little bit later. Does your draft say all you need to say, or could it be edited to be a little less harsh? Would this be better as a meeting (whether video or phone) over a written communication? Now the receiver has a chance to see you and have a conversation rather than feeling put on blast.

And finally, be curious.

Check out Lindsey Pollak’s books or podcast on the best ways to work with a variety of generations in your organization. Lindsey is a Multigenerational Work Expert and she does a great job explaining her research to drive multigenerational workplace success. She gives ideas on what all employees, managers, and even corporations should consider as we experience so many generations and communication styles in the workplace at the same time.

You may laugh that your children or employees think you are mad at them when you use a period in a text. But there’s a lot more behind it to consider. It may take adaptation on all sides as communication styles and the “future of work” continue to evolve.

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