hello clients, prospective clients, and business alliance members. much intense financial service industry focus remains affixed on the baby boomer crowd and their aging parents; however, financial wellness professionals should begin building up echo boomer reserves and not just in the mundane and traditional 401(k) sense. integrating health + financial wellness will optimize your lifestyle choice, and most plausibly, will improve your own personal and professional happiness prospects.
we should start out our discussion with the idea that our economic system has endured several structurally tectonic socioeconomic changes to say the least. rapid immigration, absurdly low benchmark central bank rates, cybernetic units, unchecked corporate and plutocratic greed, chinese automatons, corporate amero-roman senators with personal lictors, and certainly, welcome technological change have all combined to unfortunately raise the structural unemployment dead; often, qualified people cannot find work meeting prior technical or experiential training.
any future recovery may not necessarily lift all boats evenly, and quite possibly, may amplify social unrest. this situation sounds dire; however, you will capitalize on this time to retool your human capital and take some cover...
so, what will you control within your own world? why trust a political economic system that sees human suffering as a necessary evil and as a justifiable means in the pursuit of massive personal fortunes or cheap, disposable goods? who says you will fight the corrupt political economic system head on? why not take a more forceful approach, shuck and jive, and leapfrog this consumption plague to your family's benefit over many, many generations?
you can do your part by considering the following tactics within your own intergenerational strategy:
a) invest in your own human capital
our structural unemployment system has created significant business opportunities within agriculture, textiles, and other goods /services taken for granted after the finance graduate boom. you will finally have a chance to make something meaningful and valuable with your own hands as well as your intellect...about time...
for the record, my tulane finance studies blended with my liberal arts education has gone the distance. it just did not teach me how to fix plumbing, how to braise a lamb shank, or how to skin a recently killed deer. my wife says that my father failed me on that account; yeah right, try telling that to a white bearded, accolade-laden robotic gynecological surgeon.
too often, academia has overly emphasized intellect over practicality. who wants to depend on food trucks getting to a sterile grocery store? why hire someone to take a chance on your major household repair that ultimately you could do with family? you will create your own family institute that will teach more than a book or a university professor.
learn to grow many different foods and prepare meals as if your last breath would leave any time after eating that meal. create your own compost. herd some sheep or goats with some chickens.
you do not have to follow the corporate academic system, leveraging your future against a nebulous degree that may or may not pay off; if you just desire money over all pursuits, you do not need quite as much formal business education as you may presume. many successful entrepreneurs have achieved that time and again; however, you should avoid worshiping money like a god since even successful entrepreneurs who worship money and manipulate human capital as means to an end will always remain immoral.
life remains more important than just "making money." our organized academic systems should at a minimum set the stage for teaching the more nuanced skill sets, such as emotional wellness and empathy. the current academic system does not emphasize emotional intelligence, which remains its weakest component. it sadly and absurdly shapes its entire agenda around donors, football ratings, and tuition cash money.
improving your emotional wellness will catalyze massive sea changes in your mindset. you will sharpen your symbolic logic, take up yoga, tap the nonlocal, and yes, get out of your comfort zone.
...relax and slow down....you will shape your new reality tunnel.
b) set aside balanced financial capital
a balanced asset / liability management approach will quantify and immunize your unknown commercial and personal liabilities. do not get too dazzled with asset driven modeling scenarios with ambiguous capital market sideswipes and broadsides. you do not have to take on as much credit risk as you would think to design a robust pension. if you do not know about this topic, you can call me, and we can talk about it.
rigorous pension design builds cash reserves and creates off-balance sheet assets. cash reserves remain easily quantifiable with fancy retirement calculators and supposedly perpetual stock market growth. look beyond the hype to not get caught in the hypnosis.
off-balance sheet asset / liability management appears more elusive, not just psychologically, but in actual practice and design execution. you will hire someone to work with you at this point, right?
judiciously invest your cash reserves and remain alert...your middle class stock market remains an illusion. you will become chum for the shadow traders without constant attention in some risky, sure bet penny stock or high flier securities. question hype.
rather than pour money into a home or a 401(k), which may or may not remain the most reliable household assets, you should consider broadening your pension base. proper pension design requires a stable foundation, creates potential growth options, and deploys cost effective fail-safe mechanisms. your foundation would include health savings money as well as stable non-qualified annuities with a liquid cash reserve and large credit lines. maintain liquid cash reserves at 2.5 times your used overnight credit lines and adjust spending and/or investing based on consistent trends.
we will touch on human capital insurance, but as you can see, it helps to hire someone now...
invest in a roth ira or a roth 401(k). you can get more traction with your roth 401(k) relative to a roth ira but both remain powerful tools with your traditional ira and 401(k). check it out. you definitely want a cash reserve in retirement from which to slip those late night dollars, to feed hungry and sick children, to buy your first yacht, or to pass on tax free to your heirs. you make that choice.
our financial services industry takes a half-baked approach to uninsured healthcare expenses. you must reverse that trend within your own life and not only set aside funds for today but also for tomorrow. a future healthcare expense reserve will cover out of pocket costs from senior health insurance as well as senior custodial care. you could estimate between 5,000 in out of pocket costs per year with at least 78,000 in custodial care per year in today's nominal dollars as a starting point.
liability management estimation remains nuanced and assumption driven relevant to a client's particular situation; however, embrace the ambiguity and get to work!
c) teach your children and yourself how to start your own family business
you will stop working for other people. do it at least once, and you will see...you will try it. you will love it...
you will begin investing in quality projects, expand your interpersonal network and contacts, and integrate a nexus between your personal interests and your profit centers. build an enterprise beyond your family's governing capacity and sell mezzanine debenture interests.
business owners create wealth when retaining meaningful company ownership while extracting financial capital from properly executed financing rounds. your best situation will revolve around getting a large upfront payout with perpetual cash residuals. blueprint your own exit strategy.
your legacy will live on...you will place the perpetual cash residuals into your dynasty trust. perpetual financial capital will finance many generations' productive professional endeavors.
d) own your own mixed-usage rental property
why not live within the same building or building complex with light-commercial tenants, apartment residential tenants, grocery stores, nightclubs, and/or delis? mixed usage real estate remains economically vibrant and sustainable since both residential and commercial market performance do not necessarily correlate statistically.
for instance, you may have a high tech manufacturing industry boom soaking up commercial space while residential tenancy could hurt from a school district laying off many teachers. your vacancy would more than likely fill with commercial tenants needing space for employees. you could also have a tavern that will serve drinks boom or bust.
quality commercial tenants will also attract grocery stores, culinary artisans, or delis. your neighborhood quality of life will not benefit from another fast food grease pit. you will dedicate urban space as a growing space to fill your dinner tables with wholesome food.
e) get your human capital insurance priorities in order
people younger than age 50 will probably endure a disability or illness rather than unexpected death. your human capital's productivity demands disability insurance; as a business owner, you will consider overhead disability as well as a buy-sell disability insurance plan with key partners. you can do the same with life insurance, a most productive and efficient off-balance sheet asset.
most baby boomers have homeowner's insurance while few own long term care insurance. do people care more about homes or their own human capital? our society focuses so much on the homeowner wet dream to the exclusion of discussing the more mundane but dreadfully more important personal and corporate liabilities. invest your dollars in yourself rather than some consumption good.
you will invest financial capital into non-cancellable long term disability and permanent life insurance with long term care benefit riders. this combination will complement your pension design efforts when properly designed by your own retained financial counselor. you can start investing in permanent life insurance with long term care benefits under age 40 now, even as low as age 3.
f) create your own legacy
you will leave financial, resource, and human capital aside for the next generation. avoid taking the mindset that this process only revolves around financial capital.
human capital will prevail over financial and resource capital. who runs the matrix, huh?
