Financially, the American middle class is imploding and shrinking itself and the mainstream financial service industry has assisted them in the process by neglecting to service them.The great majority of the middle class will not be living the retirement of their dreams because they have practically no financial common sense and are ruled by their immediate gratification desires by spending more than they make. The only solution is a return to frugality by obtaining a hands-on, practical, and an easily implementable financial education that teaches them how to take control of their finances by becoming debt free, money and investment smart. Ideally, this should be coupled with entrepreneurial online marketing education, training and implementation so more of the middle class can leave the drudgery of their present jobs and become their own boss where they have a real opportunity of making a lot more money and accomplishing their goals and dreams.
Robert Kiyosaki and Donald Trump wrote the book "Why We Want You To Be Rich" about the shrinking middle class. The book became a New York Times best seller and concluded there may come a day when the middle class is no more because it continues to implode itself. Consider the following statistics:
1.The average family is approximately one to two months from bankruptcy.
2.Until 2009, the savings rate has dropped to zero from 11% of take home pay in 1970, even as the family added Mom as a breadwinner.
3.Until 2009, of every $100 spent by consumers, nearly $43 is by the use of credit and approximately 80% spends $1.05 for every dollar they make and is upside down on debt to equity.
The sad facts supporting the imploding middle class is that over the last three decades, most every stock broker, financial planner and advisor, could not afford to work with the middle class because they were so overburdened with debt and had no money with which to invest for the future or buy the life insurance they needed for family protection purposes. Consequently, the financial professionals spent their time competing against one another for a share of the high income, high net worth market (less than 5% of the population) because that's where the money is.
The only possible way for a financial professional to make a lot of money serving the middle class is to have a cookie cutter assembly line where only a few minutes can be spent with a customer who buys into their system. Unfortunately, this approach is more concerned with putting money in the financial planner's pocket than in objectively accomplishing the goals of the customer.
Considering the above, who in the middle class can answer the following questions:
1.Is anyone on track for the retirement of their dreams?
2.What is required to have the retirement of your dreams?
At best, only 10% could answer yes. Studies indicate that the average 50 year old has saved less than $50,000 which will not make for a happy retirement, especially when $1 million at 4% only generates $40,000 per year of income. That amount of income is not much when most people have children and even grandchildren depending on them over the next 10, 20 to 30 years. Too many people are counting on the government to bail them out which is a very bad bet today as government is literally mortgaging the future of our children, grandchildren and great-grandchildren. So much in fact that every U.S. person has a minimum debt of $250,000 due to the gross government excesses when considering the total Federal debt (both budget and off-budget items). It's absolutely atrocious!
Unfortunately, the foreseeable future over the next 2-5 years doesn't look any better what with the loss of real estate values, increased unemployment, foreclosures, and soon to be seen further stock market losses that will make the 2008 fourth quarter losses seem like a walk in the park.
Candidly, the middle class needs a resurgence of the money attitude they had 50 to 60 years ago when they focused on planning, financial education and building futures for their families. Perhaps one good thing may result from this present recession and that is a return to that frugal attitude versus the instant gratification of buying everything on credit, including vacations. People are more concerned about planning their next vacation and who cares if it's way beyond their budget; they'll deal with that later just like they will their finances.
So what is the solution? It's pretty clear that the middle class needs a practical, hands-on financial education where they learn to take control of their own finances and become debt free, money and investment smart. The problem though is that our schools don't teach it. The countless "money and investment" books only inform or at best, present a do it yourself program or some great ideas but leave one to decide how to implement it and figure out the necessary priorities. Peoples' jobs definitely don't teach it because if employees knew what their employers know, then the employees wouldn't need them anymore. Lastly, going to Wall Street and traditional financial planners for sound, conflict free financial education and advice obviously doesn't work either as the fourth quarter 2008 so readily proves.
Get real! Why would anyone turn their money over to strangers to manage when most financial advisors have less education to do what they do than massage therapists? It's incredible, the huge Wall Street firms, supposedly the real smart money people (yes, at lining their own pockets at the expense of the public) spend upwards of $500 million plus per year advertising. If they were really doing their job, happy clients and customers would just refer them new customers and clients.
Fortunately, a few wise souls are now addressing America's deplorable lack of a financial education and this is the beginning of a major trend that will continue for many years to come. These vision thinkers know that most financial and investment planning is not rocket science and is not complicated. People just need the education and a better road map to follow and they'll do a better job than the vast majority of so-called financial planners and advisors who know how to get paid for pushing product. Some of these forward thinkers are even coupling that financial education with an entrepreneurial online business opportunity so people can leave the drudgery of their present jobs, become their own boss where the sky is the limit and truly have the opportunity of accomplishing their goals and dreams. Let's hope this trend continues as the need for it by Americans, especially the middle class, is desperate.
Harley Hunter, high end financial consultant, innovator, and entrepreneur with 40 years experience built two multi-million dollar companies is now on his third company offering entrepreneurs an internet marketing business opportunity to potentially earn 6 & 7 figure incomes and participate in a stock option plan while solving the problems addressed in this article.Click Now http://www.elitewealthplan.com
Article Source: ArticleRich.com