Many have begun to doubt the American dream of prosperity and it's not difficult to see why they would. We live in a nation that is covered in debt. From student loans, to mortgages, to cars, debt is everywhere. It used to be that you went to work, made a paycheck to pay for your expenses and put away money in the bank over your working years. When you got old you had your pension to fall back on plus some social security. Jobs generally don't offer pensions anymore and now all you have is social security(If it doesn't run out of money) and what you can save up. So how can the American dream still be alive in light of this?
There a light in the midst of the darkness. It requires a change in perspective plus some knowledge to see it. Instead of being a person who works for money, you have to become a person who has their money work for them. This is possible through investing. The S&P 500 returns double digit percentages on average. If you invested $100 a month from age 25 to 65, you would have 1.1 million dollars. The average used car payment is $400 while the average new car payment is $563 so it would more than suffice to say that many everyday Americans can manage to do this. One glaring problem is we are not taught about how to use our money as a tool to build wealth. We are only taught about consumption and that we are never going to get ahead anyway. You may as well have that expensive car on loan since you can "afford" it, right? Not so fast!
Once you change your perspective from consumer to investor, you can move mountains. However, motivation alone is not enough. You need the knowledge! This is where financial coaching comes into playyou see your financial life differently, you begin to look at all the consumer items in the world in a new light. Things that you once thought you had to have you will no longer want or need. Once you realize what they force you to give up in the long term, your priorities change. Even if you eventually get some of these things, your approach will be altogether different.
Here are a few things to remember:
America, you do not NEED expensive cars, you want them.
The car as a status symbol does immense damage to people’s wealth. Cars depreciate in value quickly. A car takes you and brings you. That’s it. Don’t give up your wealth-building capability to look good going down the road.
Investing can help end the student loan crisis:
The average student loan borrower owes $37,182 in student loans. If you invest 100 a month for your child from birth to 18 years of age at a conservative 8 percent return, you will wind up with $48,008. Many states offer plans where you can do this tax free. Ask us for more info!
It’s good to own a home, but broaden your perspective on assets:
When you speak about assets, the number one thing people think of is a house. Houses appreciate in value, however, if it’s the house you live in, there is no access to that value. In actuality the house you live in takes money from you on a month-to-month basis. When you look at it that way, it’s a liability. This is not to say owning your own home is bad. It’s a good thing to have a house and pay for it to eliminate that expense, but you need to purchase other assets like mutual funds or exchange traded funds that will send money your way. The house you live in does not do that and if that’s basically all you have, you won’t have good cash flow in retirement. Don’t depend on social security! Contact us to learn about investing and home ownership!
Now, it’s true that not everyone afford to invest. There are people who are poor and honestly unable due to circumstances out of their control. However, there are too many Americans literally driving their wealth down the road to say that a great number of Americans are unable to build generational wealth and tackle college costs in a much more effective way than we do today. The old ways simply don’t work anymore. It’s time for the working class to adopt some new tactics for the modern era. Are you ready to up your game? Give us a shout!