Sushi Money

     Are you a confused investor?  I think we all are sometimes… in the world of money there is always something to learn.  Economics, finance and investing are not static topics, especially as countless laws change every year.  But if the research we read about is true, then as many as half of all Americans find the investing process confusing.   In this Bankrate article, they ask “is the other half lying?“  It’s an excellent point, and probably close to the truth.  Many people don’t realize how complex investing and retirement planning really is, and take much for granted throughout their lives, all the while paying a lot more than they should in fees and other charges.  No surprise, I’ve done the same thing for years.  

     But at some point, in order to acheive any degree of tangible retirement security, you have to start asking questions and begin finding the right answers.  While so many Americans stay confused, guess who benefits?  The financial services industry.  I’m all for businesses making a fair profit, but not at the expense and ignorance of the people the industry supposedly serves!  And who benefts the least?  Those who least understand what they are getting into.  The segment of the population that is at the lowest socio-economic levels.  Is that surprising? Probably not… education is the key to so much in our society, and it’s no different where investing and saving for retirement is concerned.

“In short, it is the lower- to middle-income segment of American society that is in the greatest need of financial planning and investment advice; however, the industry is simply not equipped to deal with this population of underserved people.”  John Grable, Kansas State University

     It’s really all about financial literacy.  Just as reading, writing and arithmetic are the fundamentals at elementary school for our children, financial literacy can serve as leverage for understanding and succeeding in the areas of investing and retirement planning.  Can you do it alone?  Certainly.  But it’s not a simple proposition.  It requires regular education and research, as well as age-old discipline to stay with it.  Some statistics in the article above cite that only 32 percent of investors in America have an IRA.  And only 23 percent have both an IRA and a 401(k)!   According to the Employee Benefit Research Institute (EBRI), the Individual Retirement Account is the single most popular retirement savings vehicle in the country.  Just not enough people are using one, or starting soon enough if they do!  

     When you look at the numbers, it’s actually somewhat scary.  People are starting to realize that they must take charge of their financial future, but we’re not saving nearly enough.  It takes a great many years to accumulate sufficient retirement assets to provide a self-sustaining source of income.  Social Security is counted on by far too many for far too much.  It will probably be around during our lifetimes, but it’s not going to give someone a secure retirement without something else to supplement the income need.   Take a look at this 2007 chart from the EBRI:

 

    Nearly half of all U.S. workers report savings and investment totals of less than $25,000. And almost 25% of U.S. workers and retirees report having no savings and investments at all!  Admittedly, many of these numbers are skewed to the younger population with older workers normally having more savings assets.  But it’s still not pretty.  We can do something about that… take charge personally and start planning for our future today.  Read and learn, share knowledge with family or friends, and think about the vision you have for the years ahead.   Besides, what is it really about?  It’s about investing in ourselves.  Getting there financially  just takes knowledge, time and a little discipline along the way.  Of course, if you read this far you’re probably way ahead of the pack.  But as we take a few more steps to secure our retirement, maybe we can help someone else learn to do the same.  

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