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September 30, 2012 at 08:00 PM
Most experts agree that from 2000 to 2010 there were little or no gains in the stock market. The Dow started and ended the decade at around 10,000. Furthermore, interest rates were so low that inflation and taxes caused most Americans to lose buying power during that decade. This was a financial “lost decade.”
I explain that situation to every prospect and client. I then ask them: “What do you see happening in this decade that will be different than the last decade? Could this decade even be worse?”
Two studies released by economists at UCLA and Societe Generale verify the concern that we are facing another financial “lost decade.” Societe Generale believes there will be no economic recovery until 2017. UCLA forecasts even worse news and they predict no recovery for seven to 10 years. When that happens, it will mean that an entire generation lost two decades of growth.
Exacerbating the problem, the Census Bureau reports that average income has declined from $52,000 to around $49,000. So there is less money available to save, and it is not growing as quickly. Facing these challenges, how can Americans save for their futures and their retirement?
This kind of news can really overwhelm, dismay or paralyze our prospects. When the news is bad enough they often say things like, “If it is really going to be that bad, why should I do anything? I might as well enjoy my money as much as I can right now.”
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