Is It Just Coincidence, or Is Some Bigger Trend Unfolding Here?
Anecdotal evidence won't prove a trend, but it can sometimes hint at one that's unfolding. In that light, consider that in recent months more and more of my professional time has been devoted to addressing issues related to clients' personal and/or family budgets. Cash flow, always a challenge for some of us, has tightened, in some cases gone negative. Are we seeing a bigger trend here?
Meanwhile, it appears that the number of those labeled "super-rich" has begun declining for the first time since 2008.
(With all the problems of these "Super" types, shouldn't this be a job for Superman?)
As for the rest of us, I'm not aware of any studies that quantify an increase in cash flow problems. Then again, a flood of stories has already soaked the digital pages of financial media regarding the lack of resources of the average American. Without repeating the litany of woe, a quick summary would be that most Americans don't have enough saved for retirement to live at a level near what they're used to. And for those who haven't hit retirement, a huge percentage of us are literally one paycheck away from financial collapse. There's nothing in the piggy bank - not a single faux copper penny.
Having shared these anecdotes, we hope you won't tumble into a vat of funk - whether you're a fallen Super-rich, or just an average Joe. On the other hand, those of us who've managed to save a little over the years and do have a bit of cushion should find some advantage in all of this, shouldn't we? Then again, since we can't earn any safe return whatsoever on our savings, we're not home free either.
If you sit with your cash earning nothing, you'll likely wind up with those savings declining in purchasing power over time, even in a world of low inflation. That will mean that even if you start out your retirement in decent shape, you'll wind up with less and less (as your purchasing power declines) putting you in the same basket as those who can't live anywhere near the level they're used to.
If, on the other hand, you decide to take on risk in the stock market - the solution proposed by the hordes of brokers and advisors who preach "stocks for the long run," you may wind up caught in the maelstrom of the brewing credit crisis to which we referred in our last post. Getting caught with your stocks down won't serve you very well as you begin what you hoped would be a happy and tranquil retirement. What's a prudent man to do? Ah, grasshopper, such is our dilemma.
Meanwhile, for any others of you who feel your cash flow pinched lately, you may be in the vanguard of a growing larger trend. We'll see.
Meanwhile, it appears that the number of those labeled "super-rich" has begun declining for the first time since 2008.
Stock market losses were a big driver of depreciating wealth, the report said. A collapse in oil prices hit the super wealthy in the Mideast and Africa, while currency fluctuations also played a role.Any connection between these super-rich and my distressed clients here? Likely not. Breathe easy super-rich:
Brazil saw a 12% drop in ultrahigh net worth individuals, the data show. In Saudi Arabia, the population of these individuals dropped 8%, Russia 5%, the U.S. 2% and China 1%.
...according to a report from real-estate broker Knight Frank...the retreat is expected to be temporary. The number of superrich will rise 41% by 2025, although “the pace will be significantly slower than the previous 10 years,” the report said.Of course, such a rise may not include salvaging those who've slipped below S-R status recently. Perhaps they're the root cause of another recent story about New York super-luxury real estate prices finally hitting a ceiling, with some even teetering and tottering to the downside.
(With all the problems of these "Super" types, shouldn't this be a job for Superman?)
As for the rest of us, I'm not aware of any studies that quantify an increase in cash flow problems. Then again, a flood of stories has already soaked the digital pages of financial media regarding the lack of resources of the average American. Without repeating the litany of woe, a quick summary would be that most Americans don't have enough saved for retirement to live at a level near what they're used to. And for those who haven't hit retirement, a huge percentage of us are literally one paycheck away from financial collapse. There's nothing in the piggy bank - not a single faux copper penny.
Having shared these anecdotes, we hope you won't tumble into a vat of funk - whether you're a fallen Super-rich, or just an average Joe. On the other hand, those of us who've managed to save a little over the years and do have a bit of cushion should find some advantage in all of this, shouldn't we? Then again, since we can't earn any safe return whatsoever on our savings, we're not home free either.
If you sit with your cash earning nothing, you'll likely wind up with those savings declining in purchasing power over time, even in a world of low inflation. That will mean that even if you start out your retirement in decent shape, you'll wind up with less and less (as your purchasing power declines) putting you in the same basket as those who can't live anywhere near the level they're used to.
If, on the other hand, you decide to take on risk in the stock market - the solution proposed by the hordes of brokers and advisors who preach "stocks for the long run," you may wind up caught in the maelstrom of the brewing credit crisis to which we referred in our last post. Getting caught with your stocks down won't serve you very well as you begin what you hoped would be a happy and tranquil retirement. What's a prudent man to do? Ah, grasshopper, such is our dilemma.
Meanwhile, for any others of you who feel your cash flow pinched lately, you may be in the vanguard of a growing larger trend. We'll see.
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