Amazing, I just had the most incredible conversation with a father regarding his mid-thirties daughter who happens to have been blessed with her parents paying her college tuition in full and has been employed consistenly since graduating. The sad commentary in this story, is that this young ladies father is getting up in age and unfortunately has experienced a series of financial set-backs. He actually, could benefit from her support to help him get back on his feet. Unfortunately, his daughter has a lifestyle that although she has a rich paycheck, she has not acquired any true assets. She spends, spends, spends on expensive treats – luxury apartment, vehicle, travel and designer clothes. Yet, she has no major savings, assets, or resources for a rainy day!
As tragic as this seems, I had to write this column because too often this has become the case for the paycheck rich crowd. They look around at everyone else hitting a financial valley and presume that somehow they will never encounter a set-back in their own career path. Consequently, they live at the maximum – actually a few thousand dollars beyond their income level and presume that the rain will never appear. Reminds me of an old song by the group, Tony Toni Tone’, “It never rains in southern California.” Eventually, even in southern California the rain appears as it will along your career path.
So what are the keys to motivating the “keeping up with the Jones” crowd that they should prepare for a possible economic downturn? I am not sure, as I recall hearing stories shared by my grandmother regarding the impact of living through the Great Depression. This severe financial market collaspe created a generation of savers determined to have a nest egg somewhere just in case. Many from this post World War II generation shared stories of how they lost trust in the banks and therefore took matters into their own hands.
Recently, our country experienced the second market collaspe by way of the Great Recession. This has spurred a sense of the need to re-evaluate the excesses and save. We are encouraged by Suze Orman, Robert Kiyosaki, and Donald Trump to find ways to build financial security albeit through different paths.