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| | | Monday, May 9, 2016 | Issue #2799 | |
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THE ONE-STOCK RETIREMENT PLAN?
 Retirement planning could be as simple as adding this one single stock to your portfolio right now.
That's because a little-known company could soon DESTROY the electric car industry...
And rewrite everything we know about transportation.
Adding it to your portfolio today could bring you the retirement of your dreams. | |
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The Cure for Your Economic Pessimism Marc Lichtenfeld, Chief Income Strategist, The Oxford Club
 Last week, Alexander Green wrote a great series here on the American Dream.
He was inspired by a visit to his 12-year-old son's school. There he found that both students and teachers seem to believe the American Dream is dead.
Sadly, they're not the only ones.
I just came across a stunningly depressing survey. According to Legg Mason, 62% of affluent respondents believe the American Dream is no longer within reach.
Affluent was defined as having $200,000 in investable assets, not including the survey taker's primary residence.
Fifty-five percent of these individuals believe that the American Dream is completely unattainable. And, more interestingly, only 36% of the 250 millionaires surveyed believed they were actually living the American Dream.
That is incredibly sad.
Like most people of my generation - and several generations before me - I was raised to believe that if I worked hard, I could achieve anything.
Fortunately for me, I believed it.
Many of you know that I have a unique side job. I am a ring announcer for boxing and mixed martial arts. Twelve years ago, I had never stepped inside a ring. But it was something I yearned to do.
I banged on door after door until I was given an opportunity. I worked my tail off and, a few years later, I was announcing some of the biggest fights on HBO and Showtime. Since then, I've traveled all over the country on boxing promoters' credit cards. I've met the biggest stars in the sport and had the best seats in the house for some great fights.
The same thing happened in my life as an analyst.
Twenty years ago, I decided I wanted a career in the stock market. Unfortunately, I had zero experience (other than spending all of my free time studying the markets). Again, I had to bang down the door, work and study extremely hard. But now I have an audience of hundreds of thousands of readers. I've even written an award-winning book.
Most importantly, I get to jump out of bed each morning and do a job I love.
I'm hardly alone. All of my friends from high school and college are successful. They, too, took chances. They worked hard, built businesses and careers, and while they may not all be living in mansions and driving Bentleys, I bet most would say they are living the American Dream.
[Editor's Note: For further proof that the American Dream is indeed achievable, check out Friday's issue about the 92-year-old janitor who amassed an $8 million fortune.]
That's why I find the results of Legg Mason's survey so troubling. Why do so many people - particularly the wealthy - believe they can't achieve the American Dream?
Here are a few reasons I've come up with:
- Lack of a safety net - Very few workers today have any idea how they're going to fund their retirement. Pensions barely exist anymore, and who knows If Social Security will still be solvent in a decade. Combine that with escalating college costs for their kids and worries about having to care for elderly parents... today's 30- to 60-something workers have a lot of pressure on them.
- Negative media bias - The news is all bad. Your local media reports nothing but rape and murder. National news reports on war and scandal. And there is the constant drumbeat about how terrible things are, especially in an election year. This despite the fact that unemployment is extremely low and we live in a country of abundance. (Of course, that doesn't mean everyone has everything they need. But compare our situation today to how things were 40 or 80 years ago and we're doing OK. More than OK, in fact...)
- Wages have not increased - While unemployment is very low and we're starting to see an uptick in wages, there has been no meaningful wage increase in years. And even though inflation has also been low, buying power erodes when incomes are stagnant.
- We need to redefine our terms - What exactly is the American Dream? Is it being rich? Is it living better than our parents? No doubt, I have ambition and I like to make money. That's why I save and invest. But would I be satisfied if I lived like my parents did - in a decent house in a safe neighborhood, sending my kids to college but without a ton of extras? You bet I would. But I know my opinion isn't universal.
And speaking of redefining our terms...
I also find it alarming that having $200,000 in investable assets qualifies as being "Like most people of my generation - and several generations before me - I was raised to believe that if I worked hard, I could achieve anything.
"Fortunately for me, I believed it." | |
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"affluent" these days. If you have a kid going to college or you are retiring in a few years, 200 grand isn't going to last very long.
According to the Department of Labor, someone who made $50,000 per year will need about $40,000 per year in retirement. Assuming Social Security covers $15,600 per year, that leaves a $24,400 hole. A $200,000 nest egg will be depleted in less than a decade at that rate.
That's hardly what I'd call affluent. The even scarier thing is... so many Americans don't have anywhere close to $200,000 in savings.
I'd argue that the antidote for all this pessimism about the American Dream is simple: Save, save, save and invest.
The more you do, the less financial pressure you'll feel. Do you really need as nice of a car as your neighbor - or could that extra $5,000 be put to better use elsewhere?
If you saved an extra $5,000 on your next big purchase and invested it in stocks that raise their dividends every year, in 10 years you should have more than $15,000. In 20 years you should be sitting on an extra $50,000. And that's from a one-time investment. Just imagine what your account would look like if you saved and invested on a regular basis.
The American Dream is not dead. People achieve it all the time. But it requires discipline... education... and action.
If you can commit to this, then you should have no trouble joining the 45% of affluent investors who KNOW the American Dream is alive and well.
Good investing,
Marc
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The Dollar's Bull Run Is Over
One of the world's premier currency experts says the dollar's almost unprecedented bull market is coming to a dramatic close.
"I'm moving significant amounts of my personal net worth in anticipation of what's to come," he says.
To find out the four steps he's taking... and how a dollar bear market will hit the stock and bond markets... just go here. | |
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When it comes to financial literacy, the average person is totally clueless. It's the No. 1 reason why so many Americans never achieve financial liberty. But there's an even bigger cost. Read On... | |
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You don't have to believe in the American Dream to recognize the raw income-producing power of dividends. In today's edition of Investment U Plus, readers are discovering one of Marc's top-yielding recommendations. To find out how you can get all the details, click here. | |
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"I want executives of the companies I invest in to manage the business - not my money." Read On... | |
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The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. 
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