Your retirement plans are impacted by political events more than at any time in history.  Are you prepared?

I am blessed to have the opportunity to speak on important issues of the day – often when I am asked to appear on major television news networks.  Each time the subject seems so far from my day job – “wealth management and retirement planning.”  The host always seems to be asking my opinion on this or that war, oil prices, the federal reserve,  employment legislation, budget deficits, you name it.  Maybe it’s not a good use of time, why bother with doing the research, funding a research staff, or even bother with going on these shows.  I have better things to spend my time on, right?

As it turns out, more than at any time in our history, political, fiscal and monetary decisions are impacting your money, the value of your dollar, and in many cases the very ability to get and keep a job.  And in case you are wondering, I do not believe these events, happening today, are a good thing.

I chose “Bread and Circuses” as the title of this blog because it aptly describes our circumstance.  Please forgive the rhetorical flourish.   It means basically being given handouts in sustenance and entertainment, primarily from the government, so that the masses won’t realize the level of decline they are in.  It originated from the Roman poet Juvenal  in his Satire X, where he describes the delivery of panem et circenses by the Roman politicians as a means to get votes.  (For my clients at or near retirement, you probably remember the phrase more from Captain Kirk and the 1968 Star Trek episode by the same name, but I digress).

Ben Bernanke, Chairman of the Federal Reserve, recently announced Operation Twist –  a plan to swap the Fed’s short-term Treasuries for long-term.  The stock market collapsed upon the announcement.  This will not fix the economy, and in fact, will damage those that rely on long-term interest rates to be higher than their current rock-bottom rates.  That includes savers and those holding FDIC insurance products, as well as long term Treasury Bonds.  Basically – everyone trying to prepare for retirement.

The “Bread” that the government is handing out actually doesn’t work.  You cannot have this type of government intervention in to the marketplace and somehow help your long-term financial interests.  It’s not that it won’t work this time, or that you want to be mean to the President, it is simply that it has never worked!  Economists with fancy titles and who write for newspapers may have to believe their theories, but a lot of people thought the Earth was flat long after the evidence suggested otherwise.

The “Bread,” these government hand-out’s, come in many forms:  bank bailouts, government loans for green energy, government regulations which protect certain industries.  The government telling the marketplace what to do and how to do it is nothing new, and neither are the results – always bad.

Now I know many people say this is the fault of both parties, and in fact the last government we had under a Republican administration gave us much of the debt mess that we are in right now.  I would agree that many people within both parties are responsible for the financial and debt situation we find ourselves in, but there are degrees of responsibility.  I don’t think we punish the child who steals from the cookie jar the same as the mass murderer.  We have politically traded in the amateur government spenders for the professional government spenders.  Hopefully, the 2010 elections helped steer us towards a saner fiscal path, but that remains to be seen.

Besides, it doesn’t matter that political parties can be held responsible for our circumstance (because ultimately we are at fault for electing them).  What matters is the philosophy that government should be involved in the first place.  Every one of our fiscal problems starts with government involvement as the predicate.

********************************************************************************

The “Circuses” is not Congress and the White House, although that description would not be incorrect.  I am referring to our popular culture.  Although not directly provided by the government itself (they would not have the talent or the means to do so).  Can you imagine the bureaucracy that would be needed to bring us a “Monday Night Football,” or “The X Factor?”  I can’t help but laugh at the idea as I am typing this blog!

But nonetheless, our addiction to popular culture has left a society that may be ill-prepared to handle the depth and scope of the issues that we must vote on.  In Roman times, it was the Gladiator in the arena.  Today? MMA and UFC (my own personal favorites).

So many quotes can be attributed to Thomas Jefferson in regards to education and liberty, one of his more famous being:  “Whenever the people are well-informed, they can be trusted with their own government.”  And what would be the converse of this quote?  I would imagine that if the people are NOT well informed, they should not be trusted with their own government.

I know much of what you see on TV is politicians yelling over one another.  Many times, they all sound the same, other times each side will parrot the same lines you have heard for years.  But in your gut, regardless of your personal circumstance, you know what has made us great, what gives opportunity even when you feel the opportunities are few.  Being free to succeed or fail, being free to enter the marketplace, being free from the government making decisions which affect your money – in your gut you know the American philosophy of being free is your best chance at claiming success, keeping your success, or over-coming failure.

*******************************************************************************

Today, events you cannot control directly affect your money.  Chinese naval vessels threatening Indian trawlers can affect the price of fish in St. Louis.  Greek debt can affect the stock price of a US bank.  And a US government incapable of properly paying its bills is devaluing your dollar bill, their regulations are negatively impacting your employment, and the lack of leadership is crippling our market environment.

Ultimately, America is the Shining City on a Hill.  We can fix our problems through the ballot box.  It will include some pain.  But if we act now, and if we force our politicians to take the medicine first, I believe the pain can be minimal and not long-lasting.  If we delay, and if we let the politicians dictate the terms, it could be painful for everyone and possibly irreversible.  Each American must revisit their individualism, take their own personal responsibility.  And if you don’t believe in personal responsibility, if you believe in the very un-American view that it takes a village, fine.  Then appeal to your own local village for help, not the taxpayer.   America can’t afford it.

*******************************************************************************

 Control what you can control.  Every day I advise people that there are better ways to protect their retirement money.  You can go up with the stock market, lock in that gain, and then not go back down when the market retreats.  It is not too good to be true – there are always catches.  But the catches are time and a maximum gain.  You can find a solution to the risk that the global marketplace, and our own government, puts on your retirement.  I provide protection for my clients every day.