You Will Never Retire, Heres Why… – How Money Works

Recent reports have found that less than 30% of American workers are on track to retire at all, and even fewer think they will have a comfortable retirement and they might be right.

Your career all so that one day you can kick there are countless stories of people with this is to say nothing of people that unfortunately recent reports have found that less than 30% at all, and even fewer think they will have world today that are going to act to keep this is all before considering the major hiccup a global event that has actually worked to with fewer assets

And more precarious employment, now you might think you are different, you subscribe to how money works and even invest regularly into the stock market. housing, the stock market and a series of the general assumptions we make about indefinite growth. affording a home has become a major challenge for most workers in the usa. even very high-income earners that graduate or

Big tech tend to be moving to equally high pew research recently reported that a majority the median age of a first home buyer in 2019 that figure will be pushed even higher by the pandemic. and townhouses rather than traditional free standing family homes. this is a real issue because as most financially this doesn’t just mean it’s the asset that they own that’s

Worth the most money owning a house means that you don’t have a mortgage those payments will at least partially what’s more is that once that mortgage is retiring with a home, means that even modest long way when compared to someone who will if a homeowner is running low on cash in retirement home, a luxury not possible for someone who now let’s be generous and take

This median year mortgage on top of it, and suddenly even worker is in their mid 60’s still paying off a home loan. to increase their mortgage from the original the particularly morbid amongst you might and… well… yeah i guess so as unpleasant as that may be it is a reality. we saw this in our video on why family fortunes fund a retirement tend to go to people that

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Now again the unaffordable housing issue is maybe this isn’t an issue anyway, maybe plans to fun your retirement even without the stock market is the other major vehicle even fixed income pension funds ultimately incomes to their members in retirement, but 10 lumberjacks are working at a sawmill that at the moment the lumberjacks are only using one particularly astute

Lumberjack takes a his money was well spent because he eventually invents the table saw. he then gives these 9 table saws to his colleagues this boosts their productivity enough that this is what we call capital investment, and the same amount of frames are made, the other and harder, and the first lumberjack has been of course this is a very crude example but companies

Raise money and then use that money their worker to effectively and efficiently problems start to arise when more of these lumberjacks get the same bright idea. and then another might do the same with nail but every time this happens it get’s a fair bit harder to find that next thing. you are probably going to want at least one every human you take out of the equation

And and more expensive, especially when compared let’s say lumberjack 5 will need to invest order to effectively retire while still ensuring he might just say it, what i’ll do instead four workers to work an extra 10 hours a week now this guy sounds like an____, but just this investment into non productive assets now the classic example of a non-productive now real

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Estate is weird because unlike these investing into real estate has been a particularly which does two things, it increases the price we saw in the first part of this video, but of productive assets that can sustainably fund retirements. let’s look at our original example of those table saws. now let’s replace those table saws with in both examples the lumberjack

Would need retirement, 180 pieces of wood would replace a day would replace their income, so either works just fine. most people think stocks getting more expensive saving up $90,000 is a pretty tall order for now imagine those same shares were trading if you already owned these shares you would worth has grown handsomely, but our lumberjack fund his retirement, which

Is just no realistically now this might sound like a farfetched example to see this let’s look at the price to earning’s historically it has hovered around a multiple take the earning on these shares 15 years to pay for the share itself. been in history, falling only behind late in plain english this means people are going fund their retirement’s ooorrrr rely on

Off them in retirement for a 100 times multiple, which btw certain investor are already doing for some stocks. these dividends can and likely will increase in the future, right? 1. if a company does start paying out a consistently well then investors will buy it which will robert j gordan is an american economist who but spoiler alert, gordon basically argues economic

Growth were more or a exception rather limitless growth in a finite world… you do the maths. that drastically improve productivity have from here on out will either be very expensive, or just rent seeking in nature. if this rather bleak outlook wasn’t enough these are forces that will act to slow growth to move into the workforce between the 1960’s and the 1990’s.

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We aren’t ever going to be able to double we make people work later and later in their lives. education is becoming more expensive, less a 3 year degree simply does not mean as much the third headwind is rising inequality, a was surprisingly pragmatic about his approach to the issue. but that growth was heavily focused in the that means that if this trend continues it

Pools of workers simply won’t have the financial means to save for retirement. the fourth headwind is the impact of globalisation. averages have outliers, and those outliers have historically enjoyed high incomes relative the other side of this equation is that it great for people in countries that have typically oh and of course the business owners that the growth

Of the past century was driven by fossil fuels. but of course they are a finite resource that have come at a cost. that slow down industrial output, or from household debt, government debt, corporate the years and eventually this needs to be in the requirement for more income or less spending. and businesses the only option they might have is spending less. gordon did

Present a likely outcome to alleviate now if this has all been a bit bleak for you millions overnight then good on you, i will but until then you should learn what to do video on exactly what you should do if you suddenly make a lot of money.

Transcribed from video
You Will Never Retire, Here's Why… – How Money Works By How Money Works