Breaking
the Financial Trap; Part I
The
Nature of the Problem
All
over the world, the "safety net" our parents relied on
- pensions, government support, and living wages that encouraged
savings - has been quietly dismantled. There is no longer a social
contract between employees and employers; the responsibility for
providing for retirement has been almost completely shifted
to the individual.
Meanwhile,
the cost of getting older is escalating at an alarming rate. Our
kids' college tuitions are going up as much as 20% a year
or more. Our parents' medical and nursing care costs are
skyrocketing. We're watching our healthcare systems implode
before our very eyes.
And
deep down inside, we know that the recent federal tax cuts are resulting
in budget shortfalls at the local level, which will trigger tremendous
tax increases later on, as vital services are eliminated
and our bridges, roads, sewers, and other infrastructure crumble
for lack of proper maintenance.
We
cringe when we see yet another senior citizen handing us
fries at the drive-through window, knowing they should be at home
having meals served to them instead.
We
cringe, because we know that someday soon, that could be
us. We don't want to think about it, but deep down, we know that
more and more people are simply destined to work until they die.
And there's a quiet, rolling fear building in our guts.
In
fact, according to the 2003
Retirement Confidence Survey, only 37% of American
workers have even bothered to calculate how much money we'll need
to save by the time we retire - much less formulated a plan for
actually saving it.
Many
of us gambled on the stock market - and lost. Our paychecks are
stagnant; that is, if we haven't been laid off recently. The latest
refinancing boom has left millions of us with little or no real
equity in our homes, and forclosures are at an all-time high. (Take
advantage of that fact here.)
So,
for many of us, it's too late to just save our way out of
this mess. If we want to "beat the system", and escape
the trap with our financial lives, we're going to have to improve
our credit and increase
our incomes - quickly and dramatically. But
is there a way to honestly, legally, and ethically do so?
 Next:
A Bold Solution
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