Securing assets in times of crisis - how should that work?
Corona, globalization, outsourcing, mass layoffs, plant closings, subprime mortgages and credit default insurances, Ponzi schemes, Wall Street fiasco, recession ... one bad news follows the other.
In times of crisis, it's not just American companies that lay off millions of workers every month. The unbridled decline in employment is a devastating epidemic to which few are immune. From executives to middle management to administrators and workers, from bankers to retail office workers - everyone is at risk.
In recent years, many people's retirement provisions have suddenly lost half their value or even more. What people thought were solid, reliable assets burst like a soap bubble. There are no more secure jobs; that is a thing of the past. In a USA Today poll, 60 percent of Americans surveyed said they view today's economic climate as the biggest crisis of their lives.
Trading time for money is a stupid trade
Of course you already know all of this. But here's something you might not know: none of this is really new. Sure, it took a major economic crisis to open people's eyes and make them realize that their very existence was in jeopardy. But your income was not in danger overnight - it has always been in danger. A sword of Damocles has hung over many heads for years, because there is a fine line between solvency and ruin.
People rely on their next paycheck to pay the cost of living each month, and they usually have a very thin safety pillow, and very often none at all. A salary is made by "trading your time for money," and in times of recession it is the most unreliable source of income there is. Why? Here's what I can tell you: as the number of employees goes down, there is less disposable income floating around to pay for your time.
I said yes
I don't want to come up with the I-said-yes-right-away-scam, but ... I said it right away. And I've been saying this for years: There are simply no more secure jobs. Corporations are the dinosaurs of the 20th century, trembling on the verge of extinction. If you want a really secure future, you have to take that future into your own hands.
In my opinion, the US and many Western countries are heading for financial disaster, and to blame is that our school system does not provide students with realistic financial education. If you believe that your private financial market investments will outlast the future, if you want to play Russian roulette with the fluctuations in the stock market, then you are putting your old-age security at risk. What will you do when you are 85 and financialwelt sinks back to the deepest depths after a flight high? Such a thing is completely beyond your control. I'm not saying investing in financial markets is bad. I'm just saying that they are not safe and that they are not a wise choice and I wouldn't bet on them when it came to my financial future.
Don't secure your future with pensions
Never before in human history have so many people bet on the stock market for their retirement income. This is madness. Do you think that the welfare state will be there to take care of you? Then you probably also believe in the Easter Bunny. The greatest strength of a security is its liquidity - and that is also its greatest weakness. We all know the next stock market crash is bound to come and then we'll be in trouble again. Why should you get involved?
What has happened recently? There was another stock market crash and it ruined a lot of people. Why? Because our habits and mental attitudes just don't want to change. In 1971 the American economy separated from the gold standard. Incidentally, this happened without the approval of Congress. But what matters is that it happened. Why is that important? Because this paved the way for us to print more and more banknotes, as many as we wanted without them being tied to any actual, tangible, genuine value. We were acting absolutely surreal and that opened the gates to the biggest economic boom in history. Over the next 35 years, the American middle class grew rapidly.
From dishwasher to credit millionaire?
As the dollar fell in value and the book value of real estate and other assets swelled, common people became millionaires. Suddenly anyone could have credit anywhere, anytime, and credit cards spread like mushrooms after a spring rain. To pay off those credit cards, Americans began using their homes as cash dispensing machines, rescheduling and borrowing, borrowing and rescheduling
After all, real estate always increases in value, doesn't it? Not correct. By 2007 we had pumped as much hot air into this financial balloon as we could - but this dreamlike soap bubble came back down to earth and it crashed hard. It wasn't just the Lehman Brothers and Bear Stearns that were ruined. Millions of people lost their old-age savings, their pensions and their jobs. In the 1950s, when General Motors (GM) was the most powerful corporation in America, the press took a statement from the chairman of GM and made it a motto that went by word of mouth for decades: “If GM goes down, goes the whole nation under. "
More and more people are broke
Well, folks, the bad news is that GM went bankrupt in 2009 and that same summer the state of California paid its bills in notes instead of cash. Right now the percentage of Americans who own a home is declining. The number of mortgage foreclosures is higher than ever. There are fewer and fewer middle-class families, savings accounts are shrinking, if they still exist, and families' debts are increasing. The number of people living below the poverty line is increasing rapidly.
At the same time, more and more people continue to work after the age of 65. The number of new bankruptcies is going through the roof. And many Americans don't have enough money to retire - not even close to enough. Did all of this bad news get your attention? You determined that, and you are not alone in this. People all over the world have stopped hitting the snooze button in the morning and turning over in bed one more time. Fine! Now that you've woken up, seeing what's going on, and realizing it's not nice at all, we can go deeper. Let's see what that really means - and what you can do about it.
The rise of the robots
What did you learn about money in school? For most people, “Not much.” If they've heard anything on this topic at all, it's: “Go to school, get a job, save up, buy a house, pay off your debts, and put your money in stocks over the long term on. «In industryzeitage that may have been good advice, but im informationzeitage it is outdated. Globalization marked the end of well-paid jobs for workers. Their jobs moved to China, India and Mexico ... The rise of robots will put an end to high-paying jobs for white-collar workers.
The jobs that have not yet moved to other continents are now being taken over by robots and artificial intelligence. Even highly qualified professionals such as doctors, lawyers and tax consultants are not immune from this. Adidas has just announced that it will be producing shoes in Germany and the United States instead of in China or Vietnam. Apple's most important supplier Foxconn says it plans to order 1 million robots to replace 3 million workers. Graduates in all Welt have to repay high student loans - the most onerous debts of all - and then cannot find the proverbial high-paying job for which the student loan is worthwhile. Robots do not ask for wages or increases, they work longer hours and do not need vacation, breaks, health insurance or pension contributions.
The savers are the stupid
Once upon a time: Anyone who saved a million in the 1970s received 15 percent interest a year, or $ 150.000. * At that time, you could live off that. Today a million dollars pays maybe 1,5 percent interest a year - 15.000 dollars. No millionaires can get by with that. Savers are the biggest losers today. In 2008, around ten million homeowners found out firsthand that real estate is not a wealth. At that time the housing market collapsed. The mortgages were higher than the resale value. The modest little off-the-shelf own home, once the pride of the baby boom generation, is now the dog house of the real estate market.
And the children and grandchildren of the baby boomers, the so-called millennials, can neither afford nor want to have this “most important asset”. As taxes on real estate rise, prices for your own little house will continue to fall. For residential property, the following applies: better small and efficient than large and burdensome. And home prices are related to the labor market. Robots don't need houses. Robots live in operations, around the clock.
Today savers are even bigger losers as interest rates fall below zero in many countries and robots continue to crowd out workers. Nevertheless, parents still advise their children as they did in the past: "Go to school, get a job and put something on the high edge."
Economics is not a financial education
As if to defend their lack of financial education, the intellectuals shoot back: "But I had economics at school." Or: "At my children's school, a lot of emphasis is placed on economics." like John Maynard Keynes, Milton Friedman, Ludwig von Mises or Friedrich August von Hayek. These economists' theories may have been watertight 50 years ago, but today they leak and it won't be long before the dam breaks completely.
I would rather listen to two influential economic philosophers than the scientists: Karl Marx, who wrote The Communist Party's Manifesto, and Ayn Rand, author of Atlas Throws the World off.
Ayn Rand was born in St. Petersburg, Russia, in 1905 and experienced the Russian Revolution as an adolescent. The Bolsheviks took away their father's business and everything he had worked for. In 1926 she emigrated to New York. She has experienced communism and capitalism and has convincing views on both economies. She was critical of Western economists and academics in their ivory towers: "You may be able to close your eyes to reality ... but you cannot escape the abyss that you do not want to see."
It is said that Rand's heroes of novels constantly fended off "freeloaders", "looters" and "Nassauers" who dispute the fruits of their labor. The parasites, looters and Nassau plead for high taxes, workers' rights, state property, state investments, state planning, regulation and redistribution. Rand describes bureaucrats and state officials as looters who steal their income from others by subliminal threats of violence “at gunpoint”. They forcibly appropriate the property of the people who "produced" or "earned" it.
According to Rand, Nassauer are people who are incapable of creating value themselves. Because they cannot produce anything, they aim to claim the income of others on behalf of the needy - the income of those who are productive. In the name of the needy, they steal from the producers and shovel the money into their own pockets. They have only disregard for the skills of the producers. Instead, they riot about the "moral right of people" and enable "legitimate" expropriation by the state. As you know, the world is full of unproductive Nassauers, looters and parasites who portray themselves as "morally and spiritually superior do-gooders." As the title suggests, Atlas Sheds the World or Who is John Galt? (Original title: Atlas Shrugged, also published in Germany under the title Der Strik) the question: What happens when the producers simply shrug their shoulders, do nothing and contribute and withdraw? The book was published in 1957 and was initially heavily attacked and criticized. Over time, however, it became a classic. Some even say: "After the Bible, Atlas is the most important book in my life."
Karl Marx was born in Trier in 1818, in what is now Germany. He is considered a socialist and a revolutionary - a man who influenced many of the modern revolutionaries of our time - such as Vladimir Lenin, Mao Tse-tung, Fidel Castro, Hugo Chavez and Che Guevara. Among his more famous quotes are: “May the ruling classes tremble before a communist revolution.
The proletarians have nothing to lose in it but their chains. You have a world to win. Workers of all countries, unite! ”Marx's socialist views were so irritating that he had to leave Europe and go to England. In London he wrote for the New York Tribune and met with open ears from American audiences when he spoke about slavery, class struggle and class consciousness.
Put simply, Marx defined the class struggle as a conflict between the aristocracy, the bourgeoisie and the proletariat. These classes can in turn be defined as follows:
- Aristocracy: A ruling class that inherits wealth, special privileges and titles, usually a monarchy.
- Bourgeoisie: Usually a term for the middle class. If someone calls you "bourgeois", it is probably meant insultingly and means that you are petty-bourgeois and narrow-minded - a typical member of the middle class. For Marx, someone belonging to this class was obsessed with material possessions, but without much drive or ambition. It was enough for him when he was comfortable.
- Proletariat: A class of wage earners who have neither capital nor means of production, but also people who sell their labor power in order to live on it and equalzeitig the poorest working class.
What “aristocrats” do better
In the agrarian age, the land belonged to the kings and queens - the aristocracy. The English word peasant for farmer is derived from French, from pays (land) and sans (without) - without land. They were people who worked in the countryside but didn't own it. And if you read the English term for property, real estate, Spanish, then it becomes royal property.
To the aristocracy of industryzeitages included tycoons such as Henry Ford, John D. Rockefeller and JP Morgan. Ford made cars, Rockefeller gas, and Morgan made money. The new aristocrats of informationzeitold age are tech wizards who control cyberspace - people like Appel co-founder Steve Jobs, Jeff Bezos from Amazon or Sergey Brin and Larry Page from Google. In agriculturezeitearlier the rich were called aristocrats. Today they are called capitalists.
The advice to become a proletarian?
Parents who tell their child to go to school and get a job are basically advising them to become a proletarian - someone who sells their labor. But no means of production belong to the worker. If the child in question finds a well-paid job, it belongs to the bourgeoisie and rises to the middle class. Such a person is satisfied with material achievements like studies, house and car ... They are enough if they are doing well and can keep up with their neighbors.
He is happy when he can drive past the slums, apartment blocks and quarters of the proletarians and make sure that his children do not go to school with "such children". Most of those in this class have well-paid jobs. Many are also freelancers such as doctors or lawyers or small business owners. But the real estate and means of production do not belong to them. They also work for their money.
Those who are rich do not work for money
The first lesson in life should therefore be, "The rich don't work for money." When I ask readers of my books about it, most of them cannot remember this lesson. I think it's because they have so firmly internalized, "Go to school and get a job." They weren't raised to own means of production. In other words, our education system systematically prepares schoolchildren and students for a existence in the proletariat and the middle class, not for becoming capitalists who own land, companies and capital.
No wonder that millions of people depend on the state to give them work, wages and a pension. Unfortunately, such people do not stand on their own two feet. In 1970 my father, a really good person, ran as lieutenant governor of the US state of Hawaii against its boss, the Democratic governor. When my father lost the election, the governor swore that, despite his doctorate, he would no longer find employment with any government agency.
Go to school and get a job?
My father died a poor unemployed man who would have liked to work but couldn't find a job. He was highly qualified but had no means of production. He was a teacher and had taught thousands of others to do the same. No wonder the class struggle breaks out on the streets of America and around the world. No wonder that Senator Bernie Sanders stated in the 2016 election campaign for the US presidency: "Something has gone fundamentally wrong when the top tenth of a percent has almost as much wealth as the bottom 90 percent." Simply put, our global financial crisis has in ours Schools started. The United States spends billions on teacher training, but the gap between rich and poor is widening.
As Karl Marx wrote:
“May the ruling classes tremble before a communist revolution. The proletarians have nothing to lose in it but their chains. You have a world to win. Proletarians of all countries, unite!"
And as Ayn Rand said:
"You may be able to turn a blind eye to reality ... but you cannot escape the abyss you don't want to see."
This is what to keep in mind the next time you hear someone say:
"Go to school and get a job."
Don't be fooled again
Perhaps the situation will change again. But don't be fooled. Don't be lulled into the same old talk of safety that got you and the rest of the world into this unfortunate situation before. In the summer of 2008, gasoline prices in the United States peaked at more than $ 4 a gallon. Off-road vehicles disappeared from the scene and suddenly everyone was enthusiastic about small cars and hybrid vehicles.
But look what happened next: prices had dropped back below $ 2009 by 2, and - Heaven! - people started buying SUVs again! I beg your pardon? Does anyone really believe that fuel prices will stay that low? Now gasoline prices are way down, so it makes sense to buy a gasoline waster: can people really be that short-sighted? (I'm trying to be polite here. The word I'm really Sense was "stupid." Unfortunately, the answer is yes. We don't just let ourselves be fooled once - we let ourselves be fooled over and over again.
As children we have all heard Aesop's fable of the ant and the grasshopper, but the overwhelming majority of us continue to live with the foresight of a grasshopper. Question the headlines critically. There is always something idiotic excitement that will grab your attention and distract you from the serious business of making your life. It's just chatter and rattle. Whether it's terrorism, the recession, or the latest election scandal, none of that has anything to do with what you need to do today to shape your future.
Actively shape your future
During the Great Depression (the Welteconomic crisis of 1929) there were people who amassed great fortunes. There was also in ZeitIn the biggest booms in the economy, such as the real estate wave of the 1980s, millions upon millions of people neglecting to prepare for the future - ignoring all of what I'm going to talk to you about in this book. These people ended up suffering and broke. Most of them, by the way, are still in need and broke today. The problem is not the economy. You are the problem.
Are you angry about the corruption in the corporate groups? About the stock exchanges and the big banks that make it all happen? About the state because it is not doing enough about it or because it is doing too much wrong and too little right? Are you angry with yourself for not taking your life into your own hands sooner? Life is hard. The question is, what do you do with this finding? Whining and scolding will not make your future any more secure, nor will it bring security if you blame the stock exchange, the big banks, the corporations or the state. If you want a stable future, this is how you have to shape it. However, the only way to steer your future is by taking control of your source of income. You need your own business.
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