Good evening and hope you are having a fantastic day so far!! The first snow of the year came to Logan County night before last, we received a pretty good dusting but it mostly melted off the next day. So much as been going on here in the office, on the phones, through email, in text messages, on the website, out at The Triple J, with our clients, with contractors, and in the community of Adairville, there is exciting electric synergy in this strong economy that keeps surging forward!!
If you are younger and just entered the work force and or opted to hang out a shingle and start your own business, retirement might not be on your mind so much, for those of us over the age of 50 we tend to talk and think about it more. Statistically speaking the average single American man or woman, or a family of four, is not doing well at all financially, and this is one of the main reasons we started R.E. White Consulting, because we want to see the averages, statistics, ratios, and numbers change for as many people and families as possible. Our goal is for people to work, we like working, and seeing projects completed professionally and timely, and for people to receive payment.
The average person in America has $38,000.00 in debt excluding home mortgages, 87% of families are in debt with the average being $135,768.00, most of which is mortgage. When a young couple goes to purchase a house now days, the average amount they are applying to borrow is $300,000.00., and the size of most houses being built is 2,500 square feet. Almost 60% of all citizens within our borders can NOT cover a $1,000.00 emergency without borrowing more money, this is shocking data!! Wealthy people create money, large estates, and inheritances with before tax dollars, much of their money is never taxed at all, in comparison the majority of average wage earners live on after tax dollars, they pay a lot of money in taxes every year on every single dollar they earn and or spend.
If we Google about retirement in America we quickly find articles explaining what many experts call “The Four Pillars of Retirement”, in order they are: number one is the federal social security program which currently has a max benefit check of about $3,700.00 a month, number two is a federal or military or railroad or state or county or city or private firm pension someone receives for life that can’t be taken away, number three is true investments (also assets, no this does not include your primary residence in our opinion) such as a 401K or an IRA or mutual funds or stocks or IOUs or a business you own but don’t work at or rental property you lease or rent out, and lastly the fourth pillar is continuing to work and along with this we could add continuing education.
After doing a few calculations, including everyone on our team currently, some family members, and some business partners, we here at R.E. White are currently either indirectly or directly involved with helping to build and maintain, by paying money towards or receiving money from or helping to transfer money between up to 84 pillars of retirement for 21 different people. We invest countless hours by assisting our team members and business partners to better understand what the four pillars really are, and of course we ourselves learn a lot from them also, the study of finance is a lifelong endeavor. Not everyone in America will have four pillars to retire with, where one or two might be weak or missing completely, we should strengthen the others so our golden years can truly shine.
Why don’t we use The Big House as an example, as you can see there are 4 pillars standing on the front porch, Mr. Sam my late grandfather built it, his engineering has stood the test of time so far, with extremely high winds pushing on it for well over 70 years, all lot of physics are at play here. If we remove one of the two pillars in the center, a beam could be placed across the other two in order to substitute, but if we removed both center pillars it might not be possible without some serious technology, science, and planning. Let’s say we remove two pillars from either side one being on the corner, there is no way it could stand then. A fair assessment is that one pillar could be removed as long as it is not on the corner, we could call it a cornerstone or corner pillar.
In my opinion the two corner pillars to retirement in America have shifted around some, it used to be a pension and they are still obtainable, and social security but these are rapidly changing. More and more companies and corporations are abandoning pension funds or seeing them dry up, to the detriment of all employees and our country as a whole. Pension funds have been replaced by greedy CEOS who carve out multi-million dollar pay checks for themselves and upper management and stock holders, what is left are things like a 401K that you manage yourself and can actually “cash out”, a real pension can’t be cashed out, it is for life and never ends. The other corner pillar was social security but because so many people aren’t paying in as much it is now in the middle, elderly Americans are struggling on tiny social security checks that don’t keep up with inflation and cost of living.
Common sense tells us that the new corner pillars are the investments we make as outlined above, and continuing to work and retool with ongoing education. This is where starting your own business and company comes in, and no, you don’t need much money if any to start one, anyone who tells you that large capital is needed is just wrong. Dell Computers was started with $1,000.00 and some plastic conference tables. Successful businesses are exactly like successful lives, they are run and operated and owned without any debt what so ever, it may not always be glamorous or shiny and slick but it can’t go bankrupt, because the owner and or investors hold the note and own everything. Work keeps us sharp, it brings dignity, boosts self esteem, builds community and families, and Steven Covey of The 7 Habits of Highly Effective People calls it “the sustaining engine of life”.
In order to “max out” your social security check you need to have a high paying job for a minimum of 30 years, but 40 is even better and you need to wait until you are 69 or 70 years old before you start to “draw” on it or receive funds. The last 8 years you don’t receive SS is when the magic happens, the increase is 8% per year, which translates into a much bigger monthly check. As you start your own business you can benefit from things like legal itemized deductions, these are part of how large companies and corporations create wealth, and we can learn from them and we should. A person can start a SEP account or Self Employed Pension, these are tax deferred and help shield your earnings from taxation until you are of retirement age. We can also have IRAs or Individual Retirement Accounts, and these are like SEPs, they allow you to save money and not pay any or as much tax on it.
The social security pension program is compulsory, we have no choice, by law every dollar we claim as after deduction “income” is subject to this system, its an investment and a darn good one. If you don’t want to be a “sheepole” and attempt to live on after tax dollars, and borrow too much money for a primary residence, instead of creating wealth with pre tax dollars and paying cash for a home or at least putting 50% down, we highly recommend you do that and learn more. Our team can assist you with this process but you need to put some skin in the game, the odds are you need some hand holding and consulting, we can set you on the right path and then send you in the direction of legally licensed financial planners. We do not recommend you go it alone with your finances, that is a mistake, you can get ahead of the curve by engaging with us and our team.
As a team of consultants, business owners, contractors and clients, friends and family members, mentors and advisers, professionals and blue collar workers, retirees and the disabled, and retired veterans we have many decades of experience in the financial trenches with large and small scale businesses and companies. Yes, 84 pillars is a lot to keep up with but each and every individual is responsible for him or her self, many come to us for mentoring and guidance, and we invest with one another, you too can be part of this amazing process we have here at R.E. White Consulting, as the CEO I personally invite you. Give us a call today and lets talk numbers, your numbers, because money is a numbers game, the better we are at math, the more we shall succeed. The numbers speak the language of success, learning to read it is what separates those who enjoy retirement from those who fear it.
In this article we outlined the “Four Pillars of Retirement in America”, very briefly, there is so much more to cover but we can say without a shadow of a doubt, that having the wrong attitude can and will keep a person broke, and shackled in financial debt and slavery for their entire life, don’t be that guy or gal, be smart and pay off your debts and stay out of debt. Perhaps you are struggling with some sort of addiction, be it over spending or alcohol or entertainment or travel or autos or speeding or over revving your engine to annoy elderly people or simply watching too many movies, if this is the case you may have depression, we will be glad to talk with you about it, you may need to see a doctor or mental health professional, don’t be ashamed, everyone needs help at certain times in life.
Thank you so much for being here, we sure do appreciate your visiting the website, check back often for more articles on business, finances, savings, investing, retirement, planning, goal setting, time management, debt reduction, relationships, health, fitness, real estate, event planning, happiness, giving, and so, so much more!!!! Be sure to give us a call if you have a project that needs attention, our team will call you back and let you know if and how we can help!!! Thank you again, have a nice day!!
Marc White USN-RET MCP CEO