For boomeryearbook.com
Here is the thing that concerns me: Over the next twenty years, millions of baby boomers will be retiring; but only a small percentage of the baby boomers are equipped with any sort of financial education that would help them make profitable “money-related” decisions. My prediction is that these baby boomers would happily handover their life savings to so-called financial experts. Now, here is the catch about investments: 1) less than twenty percent of stock and real estate brokers actually invest in the stock/property they advise their clients to invest in, 2) almost all of the financial journalists have absolutely no real life investing experience, and 3) the same goes for people who stand infront of students in colleges and universities (professors) to teach finances. Surprisingly it takes more time to become a licensed masseur than to become a financial advisor. This reminds me of what Warren Buffett has said, “Wall Street is the only place where people drive to in a Rolls Royce to take advice from someone who rides the subway”. I think that pretty much sums up what investment advisors and brokers are all about.
The best advice that anyone can give can be summed up in one sentence: invest in “Real Wealth” like gold, silver and property, instead of its pale counterparts; currency, stocks and bonds. I hear people brag about how wise they have been by investing in Mutual Funds and about the fact that they get an interest rate of eight, nine, ten or eleven percent per annum. Well what they don’t realize is that, silver, for example, has gone up APPROX ONE HUNDRED PERCENT in less than a year. They also fail to see that the nine and ten percent interest is offset by the huge rate of inflation. To get an idea of how rapid the inflation is, consider the fact that the price of gold has gone up by twenty times in the last thirty odd years. Here are some numbers to help you understand how bad the inflation really is: Per ounce price of gold in 1880 was $21, $21 in 1930, $38 in 1970, $354 in 1985, $444 in 2005 and $700 in 2008. Even worse: most predictions are that the gold prices would climb to $1,500 or more during the year 2009 because of the imploding global economy – that sure beats the nine percent interest from the Mutual Funds.
The fact is that Boomers who are retiring will have to invest TIME in their financial literacy. There are three kinds of business men and investors: 1) those that spend neither time nor money to gain knowledge and awareness of whatever is happening around them, 2) those that spend money but not time and 3) those that spend TIME but not necessarily money. The first two fail while the third kind makes it through. Boomers have to understand NOW that knowledge is the real wealth and a mind that’s eager to learn is the only ever-lasting asset. Developing a taste for acquiring financial literacy and dedicating TIME towards its study is the only secret. Never “learn” for wealth. Simply learn for the sake of learning – and if you are enjoying the learning, the wealth will follow.
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