I heard the other day that for the first time since the founding of this country that the next generation will not be as well off as the previous one. I’m not sure if this is true, but I could believe it if it was. Perhaps there was a temporary glitch in this during the great depression or maybe a war, but as generations are concerned this would be significant. For the sake of argument, lets just say it were true. What would cause this? There are many easy targets. Some would say bad leadership, maybe a slow down in global economy, each political party would point fingers at the other (That’s just their nature!) I’m not sure, but I think there is a clue a little closer to home. I truly think each successive generation in the last 50 or 60 years has placed less emphasis on teaching the upcoming generation about basic personal financial management.
Think about this. Most of us never really were taught the fundamentals of finance from our parents. We basically learned whatever we were exposed to. It this regard, we learned to do what we saw our parents and family do. Mixed with this was the constant influence of the market to get all of the things we wanted and not to worry about it because we could buy it now on credit. When those two things are mixed together, what you get is a weakening of whatever financial discipline exists each generation. It’s like our financial gene pool gets diluted each successive generation. I’m certain there is an element of truth there. I know that’s the direction I went and that’s the direction my kids went. The difference is that when I woke up to this reality, I decided to try to change directions, at least in my family.
What did that mean for us? It meant relearning the basics of personal finance. For some it means giving up consumer debt and begin budgeting and saving. For us it meant giving up consumer debt and begin investing in income producing assets. We have turned the tide on our generational financial decline and have it going in the right direction again. You can do the same….but it will not change on its own! The government won’t change it for you and your job won’t change it for you. You have to do it and waiting won’t make the situation better. Problems don’t get better with age! They get bigger.
The best time to start is now!