The Ultimate Pension


When you read the facts below about your wealth, you may shudder. But there is a solution described in this message below.

Think about the future. This is our way. In school we cannot wait to finish and get a job. Then work starts and we soon learn that we want more. We want to be the boss. Finally we work our way to the top. Then we think about when we can retire and stop. At the end, off the tread wheel, finished with the rat race that wonderful time comes when we can finally retire.

I do not agree with this linear mode of thought, but this is the web into which most of us are caught. And there is a degree of comfort belonging to a society and succeeding with and being protected by its rules. Until we consider this:

Feb 28 USA Today, page 5B,

"Fed chief; Social Security needs attention soon.  Federal Reserve Chairman Alan Greenspan warned Thursday that the country faced abrupt and painful adjustments down the line unless lawmakers soon address the enormous strains placed on Social Security and Medicare by the aging baby boomers."Greenspan was chairman of a 1983 commission that resolved a previous Social Security crisis. He repeated his calls to change the inflation index used in calculating benefits and suggested that another increase in the retirement age might be needed."The aging of the population in the United States makes our Social Security and Medicare system unsustainable in the long run, short of major increases in immigration rates, a dramatic acceleration in productivity well beyond historical experience, or a significant increase in the age of eligibility or the use of general references to fund benefits."If there are no changes, the programs will overwhelm the federal budget."We need to act soon or baby boomers and their children will be harmed."Large increases in payroll taxes or reduction in program benefits could alter company hiring practices and employee work and savings patterns."Here is another article in the same Feb 28 USA Today on the same page 5B about the US Airways Pension:"US Airways targets pilot's pension plan.  With 10 months left in a 32 year flying career, USA Airways Capt. Joe Graham suddenly faces a retirement shock.  Instead of the $175,000-ayear pension he'd counted on it could be $90,000, if he is lucky or even much less (as little as $28,000 a year)."US Airways is asking a federal bankruptcy judge to terminate a pilot's pension plan, freeing the company from $1.7 billion in pension obligations and possibly clearing the way for its emergence from reorganization in late March."If the plan is terminated, pilots would receive $28,400 a year from the Pension Benefit Guaranty Corp. which insures business pension plans.  While terminating the plan would save thousands of jobs at US Airways, it would be a staggering blow for veteran pilots like Graham.  He has three children to put through college and when he turns 60 in December he'll hit mandatory retirement age for airline pilots.  The prospect of losing most of his pension comes on top of pay cuts that he says have cut his salary 30% from $275,000 a year.  'You can rationalize these pay cuts,' he says. 'You can cut your lifestyle back, you cannot get a new car, you can cut back on travel, but by God they're not going to cut me loose at 60 unable to fly at $28,000 a year with three kids.""Pilots were especially stung by the fact that US Airways paid $35 million in advance pension payments to former chairman Stephen Wolf, CEO Rakesh Ganngwal and former general counsel, Lawrence Nagin, before its Chapter 11 filing."

The next day's paper outlined that the judge did in fact allow US Airways to renege on the pension.

Bit the bad news does not stop here.

Another article says:

"Budget officer says deficit will hit $199B this year."The Congressional Budget Office said the federal government is on track to spend $199 billion more than it brings in this year."The figures do not take into account added spending required to fight a war in Iraq, provide the Medicare prescription benefit sought by seniors. Each of these moves could substantially increase future deficits."

In other words, we cannot totally rely on Social Security or any pension plan. History is littered with social plans that have left those how grow old out in the cold.

There is only one true form of wealth, "To be able to serve". The only way to assure that others will have what you want and need is to have the ability to create things they want. Wealth can never be static. Wealth is energy and must continually move forward and evolve. Successful service requires bringing together three natural powers: a meaningful cause we have a passion for, a financial balance and a focus that allows our cause to benefit others. A business has to serve its customer, its workers and be profitable.

This is why having your own business makes so much sense in these tumultuous times. Technology makes your own business easier. Small businesses are easier to buy today as business is harder and profits are down. Buying on the downside is always the smart way.

I have suggested other in numerous messages to look at business opportunity in the Wellness Revolution.

And the message last Thursday showed another area of opportunity in this revolution.

However, there are several other reasons why the health revolution is taking place.

#1: The Baby Boomer Bulge dictates this. Pilzer writes in his book "The Wellness Revolution" that there are a limited number of topics that can occupy public concern at a time. With a normally expanding population these topics are typically dominated by the concerns and tastes of the younger members of the society since they are simply more of them. However the bulge in the U.S. population of those born between 1946 and 1964 has caused our topics of concern to be dominated by this group rather than by the concerns of the next generation.

#2: The economic impact that baby boomers have on wellness is even stronger than numbers suggest because this group is behaving differently than any prior generation. Boomers are refusing to passively accept the aging process.

#3: Although there is no direct conspiracy between the $1 trillion food industry (that creates most of the health problems) and the $1.5 trillion medical industry (that treats just the symptoms to get the target consumer back to work and back to consumption), the economic effect was the same as if two industries were conspiring against the American consumer in the most sinister fashion.

This is where many opportunities for small business evolve. Huge corporations are marketing numerous poisons and luring our families into having them in our bodies and homes. A kind reader recently sent me a Confucious-like saying that I think is appropriate, "The superior man understands what is right; the inferior man understands what will sell."

One idea is to educate the public about the danger of these poisons and give them organic solutions is not only the right thing but it will now sell as well!

Until next message, may all your business be good.

Gary


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