« »

Wednesday, July 24, 2013

Retirement money for the love generation

By Tom Brown

A favorite joke captures an attitude about aging, “What’s the best part of being 100? Answer: The almost complete absence of peer pressure!”

But with so many boomers relatively broke, beginning to break down physically, their marriages having broken up and now living a-lonely, downsized out of their careers and being blamed for the bad luck of living in a collapsed world economy, what is there really for them to laugh out loud about?

And yet, with the same confidence they’ve exhibited for their entire existence and despite the staggeringly serious statistics and all the dire predictions, the baby boom generation is laughing in the face of old age and death and turning even the ultimate buzz-kill into their latest society-changing way to get high on life.

They’ve eaten and exercised better and consumed more and lived more fully than any generation of humans, and as if that weren’t enough, now seem determined to redefine aging (60 is the new 40) rediscover meaning (older is better) and since they’re now a full third of the US population, preparing to flex their political and economic muscle in a final “We’re just getting started” rejection of being forced into any kind of box, especially a pine one.

But if government programs aren’t able to swallow the enormous needs of this python-in-a-pig sized generation, if collectively they’re over leveraged and had what little they’d saved decimated by the world financial crisis, if their pensions have disappeared, jobs they were depending on sent overseas, and they’re too old and face too much competition for the few remaining corporate cubicles, what are the optimistic former hippies to do?

It turns out they’re happy to work longer, start businesses and join together in communities to help one another. “I was forced to find ways to deal with the challenges we boomers are facing and now I’m pulling as many people as possible into the lifeboat with me.” says Doug Leedy, a Florida-based Retirement Income Options Advisor.

Leedy spent 37 years in the real estate business, mostly as a realtor and appraiser, in his hometown of Wooster, Ohio before moving to Florida to “retire” only to realize he needed to continue to work. “My partners and I experience the most success through Renatus Real Estate Education. It’s the best concept in real estate investing I’ve seen in my entire career. Approximately 75% of the wealthy 1% we’ve heard so much about, have earned their wealth through business ownership and/or real estate investing. Renatus offers both. Not only does the company provide a world-class education so you can succeed in the challenging field of real estate investing, they offer a wonderful community of fellow investors who challenge you and help you evaluate and do deals. 

Self-employment was widespread before the Industrial Age
Doug Leedy: Florida Retirment Income Options Advisor

Networking is the buzzword in business today and Renatus creates a national network of like-minded investors who learn together, critique each other and partner on deals. It’s “competitive collaboration” and because of it,I’m not only making enough money to be able to live well for the next however many years,” said Leedy, who’s now 63, “I’m able to create a legacy for my kids.”

Boomers are being forced to deal with a legacy of macroeconomic forces beyond their control in their retirement planning. Forty-three million jobs disappeared from America between 1979 and 1995. Those benefit-rich manufacturing jobs came back as less safe and less well paid white-collar jobs, and lately many of those jobs are being outsourced to foreign workers. Playing by the rules and being responsible turned out to not always be enough to produce security.

Many disciplined, well-intended boomers had their home equity destroyed by the financial crisis and their retirement 401k’s devastated by the stock market crash. Some dire warnings estimate that at least one-third of the generation is financially unprepared for retirement.

And there appears to be no Government cavalry coming to the rescue. In 1950, 16 workers paid for each retiree’s Social Security benefit. In 2010, about 3 workers supported each.  By 2025, it is projected that there will be only two workers supporting each retiree.

Due to these economic realities, along with finding themselves alone or divorced and facing health problems they’re unprepared to accept, the “have it my way” generation is experiencing higher suicide rates than any cohort in recent U.S. history.

Death, however, isn’t as frightening to them as living. According to The New Retirement Survey, Created by Merrill-Lynch with guidance from gerontologist and author Ken Dychtwald, Ph.D., boomers are three times more worried about illness (48%), their ability to pay for healthcare (53%), or winding up in a nursing home (48%) than about dying (17%).  Dychtwald predicts “If the looming shortfall in entitlement programs is not addressed, boomers will confront challenges that rival those faced by their parents and grandparents in the Great Depression and World War II”. Now that’s frightening!

Yet, just as they’ve bounced back from Vietnam and other government insanities, the assassinations of their political and cultural leaders, overreaching idealisms, and so many other harsh realities, most boomers seem undaunted by the disappearance of retirement, as we knew it. It turns out they never wanted it in the first place. Perhaps it’s because they noticed when their parent’s generation shifted suddenly from work to leisure they became ill; both physically and psychologically.

So Americans aged 55 to 64 are starting small businesses at a higher rate than any other age group. A recent USA Today/Gallup poll says that 63% of non-retired adults in the United States plan to work into retirement. Most interesting is that the poll was taken long before the current economic collapse and that most people were making the choice for non-financial reasons. Most said they want the stimulation and satisfaction they get from working.

Almost half of America’s self-employed workers are currently Baby Boomers according to the U.S. Department of Labor. A recent AARP study on self-employment found that about one in three self-employed workers age 51 to 60 made the transition to self-employment at or after age 50.

Forrest Bledsoe made his transition at 53, after noticing “I was getting ulcers while everyone around me was getting rich”. The doctors Bledsoe worked with as he managed large healthcare organizations had created their wealth through real estate investing. Bledsoe, after he tested and rejected the guru investor weekend workshop style of learning, discovered Renatus, was immediately sold and now six years later owns or controls over 230 properties worth millions of dollars.  “I was suspicious at first, so I took my wife, who’s a fantastic businessperson, and when she agreed Renatus was a great business model built on integrity and good people we jumped in with both feet. It’s a decision we haven’t regretted for one moment. Being part of the Renatus community has made us rich.”  

Dychwald’s study points out the “me” generation is fast becoming the ”we” generation and because of their concern for the well-being of their children, fellows and recognition of the value of being in community are now ten times more likely to put others first rather than themselves.

Leedy, who is in real estate deals with Bledsoe, puts it this way, “In addition to the property I’ll leave my kids, I’m hoping to help them understand the lessons I learned from believing that if I did everything “right” and played by all the rules, the government would be there to take care of me. We are in a transition period. 

Prior to the Industrial Era, almost everyone was self-employed. The Industrial Age created a need for employees that grew to the point where almost everyone was an employee. Now we are entering the Information Age, and because of free trade, unimaginable gains in technology and the development of the internet, those jobs have been replaced and disappeared.  I hope my example will teach my kids and others in their generation to be self-reliant and find a good team to work with like I have.”

Successful Toronto-based agent and investor, Darren Ford, who’s only 38, but already thinking about his later life says retiring seems like asking to die. “To me, the only safety in life seems to be dedication to a lifetime of continuous growth and learning.”

Ford’s advice about real estate investing comes in a simple list of the top 4 mistakes people make:

#1. Not getting into the real estate investment game
#2. Not finding and building a good team
#3. Not being willing to ask questions
#4. Not being patient.

Retirement Income Options Advisor, Leedy agrees investing is a challenging, specialized field and offers his clients this list of reasons their best answer is still to get educated about real estate:

1. Real estate has always been the best way to build wealth
2. 74% of the top 1% built their wealth through business ownership and/or investing in real estate
3. Real estate values and interest rates are at an all-time low.
4. People always need places to live and will work diligently to pay you (rent/mortgage) first, before they pay anyone or anything else.

Leedy says when he meets people and shares with them an opportunity to get real estate investment education to secure their future, some respond with fear. He then asks "If you are afraid to do this, what are you going to do to change things for the better?"

“There’s no reason to be afraid,” he says, “ because the system allows people to get the education for only a couple hundred dollars down and the company offers financing with payments spread over 3 years. Anyway, a key strategy of the program is to teach you how to use other people’s money to get started in the game. There are millions of dollars lying around in IRA’s and 401K’s that are underperforming and can be rolled-over into self-directed funds for investing in real estate. We can offer people a much better rate of return, often secured with a first mortgage”.  That’s a win-win situation, which is what we always strive for.

It appears many Baby Boomers, despite circumstances, are not afraid to change themselves, their expectations and anything else that gets in the way of living long, full lives. How about you? Share your strategy, success stories and opinions.


About the author: Tom Brown, is a technology and business journalist with a passion for covering businesses, technologies and ideas that produce positive social impact, change social paradigms, and eliminate inefficient processes.

* Image licensed and copyrighted by Doug Leedy