The Wal-Mart Economy?

[Craig]

Was reading my wife's Money magazine yesterday, and even I was surprised by the tone of many of the articles ... referencing the loss of high-paying jobs, terrible job market, high use of credit, etc. And considering my own experiences in the last few years ... much longer hours on the job, job market flooded with talented managers, low prices for goods but less income with which to buy, lower compensation plans (by 20 to 30%), clearly a buyers market for human capital, etc. When I hire financial managers / Controllers now, they are often taking pay cuts of $25K and up. I sadly see too many guys and gals in their 50's that might have worked at a company for 20 to 30 years, and now are trying to survive on accounting temp work.

And, even for myself, we are technically well off, but not truly ER candidates right now (age 52). Still have a young one to get through school and college. Will likely work until we reach SS age ... at least 62.

So, my question ... frankly, how many of you are concerned about the economic future? How many are still working and saving, and hoping they can hold on to good jobs long enough to support their family and build a small nest egg? How many don't want to figure SS into your retirement income plans, but have concern about the income picture without that factor? How are you dealing with this situation, financially and mentally? Or, is any such concern overblown from your perspective?

Thanks.

 

[Bob_Smith]

Craig, I think the doom and gloom scenarios are way overblown. Money Magazine and others like them must come up with something to fill the pages every month. Furthermore, publications are like sheep. Doom and gloom seems to be in vogue now, so expect to see a lot more of it. Actually, it's probably a bullish indicator.

 

[BigMoneyJim]

I think it's overblown. My strategy was to become debt free, minimize expenses and continue accumulating while making sure I enjoy the present. Now I can take a significant income drop yet still maintain my lifestyle. If it gets really bad I can cut expenses further by eliminating all discretionary spending, eating frugal meals and moving in with someone else. No reason to worry about that now...first, it's not likely, and second, how could one prepare for that without ruining the portfolio with respect to historical performance?

I've said this a few times before, but as I paid down my debt and looked forward to being debt free with substantial savings I started to worry about my choices more than I did when I was $20k-$30k in debt. I feel like I have more to lose and am fearful of missteps. But in reality it's obvious I'm in a much better position now and can handle adversity with much more ease and agility; I just have to keep reminding myself of that. How's that go? "Don't just do something, stand there."

My personal take on this is that fear is a prevalent part of our economy these days. Fear is used to sell news, entertainment, opinion and protection & feelgood products. Fear is used to influence our political agendas. Another reminder to self: "There is nothing to fear but fear itself." I presume these doom-and-gloom scenarios featured in Money magazine offered some form of secure investment solutions to counter the declared problems? They wouldn't be commissioned or above-average expense investments, would they?

I don't count SS, but that's largely because I'm so far away from retirement I can't estimate what it would be even with today's rules. For that matter I can't reasonably estimate what year I'll retire.

 

[John Galt]

Hello BigMoneyJim....................it is interesting that
when I was young, if I got my hands on a "windfall"
like, oh say a year end bonus or a big tax refund,
I tended to try extra hard to hang onto it as opposed
to our regular day to day "earn and spend" system.
The feeling never lasted very long though, and pretty
soon we slipped back. I do mean "we" as (although my
ex. was very high maintenance) I contributed to our
lack of restraint on spending also. Maybe a kind of
"if you can't stop 'em, join 'em" thing? All behind me now.

JG

 

[bow-tie]

Definitely agree with Bob and BMJ... those guys need content. Fear seems to sell pretty well.

Not knowing what next may be in store, I use that as motivation to take care of financial business and be prepared for the worst. That doesn't justify hoarding everything and not enjoying the present, but perspective is key. Make sure you can handle the curveballs. Also, the benefit is of not having debt-type obligations hanging over one's head is a huge benefit of planning.

Everyone should prepare for some type of doom and gloom. It does happen, and the when is often unknown...