The Perfect Storm
I saw a great movie starring George Clooney, The Perfect Storm, which was based on a true story of a series of very severe weather patterns, all coming together at the same time. In other words, it was a story about what would happen if everything went wrong in the weather at once. In many ways, the year 2000 marked the beginning of the coming “perfect financialstorm.” The year 2000 has been held as a significant time throughout history. Over four hundred years ago, Nostradamus predicted that in 1998 the third Antichrist would appear. Many believe Osama Bin Laden could fit the description and time. You may also remember the terror around the computer millennium bug that would bring the world to a halt. I have also heard people say that the year 2000 wasto be the end of the world . . . and in some ways it has been . . . at least the world we used to know. I have written about the significance of the change between the DB pension plan and the DC pension plan. The DB pension plan is an Industrial Age pension plan and the DC pension plan is an Information Age pension plan. Many of us are beginning to realize that the rules between the Industrial Ageand the Information Age have changed. For example, in the Industrial Age, there was job security and company loyalty. In the Information Age, there is less and less of each. In the Industrial Age, the older you got, the more valuable you became. In the Information Age, the opposite is often true . . . especially in the field of technology. These changes at the end of the Industrial Age and thebeginning of the Information Age are adding to the coming of the perfect financial storm.
Rich DaD’s PRoPhecy
Sailors all over the world repeat this saying: “Red skies at night, sailor’s delight. Red skies in the morning, sailors take warning.” Just as Noah had the vision to build an ark, students at the U.S. Merchant Marine Academy, the school from which I received my bachelor’sdegree, a school that trains ship’s officers for the ships of commerce (such as tankers, freighters, passenger liners, tugs, ferries, barges), were taught to always be vigilant for signs of approaching changes in weather . . . changes still out of sight and over the horizon. It is training that has served me well in my business career. My concern is that many people are not able to see the changescoming simply because they cannot see the differences between the Industrial Age and the Information Age. Just as most people do not know the differences between a DB pension plan and a DC pension plan, most people are not paying attention to changes that are coming . . . but are not yet here. Before any storm such as a hurricane hits, people on the beach begin to notice a change in the wind, thewater, and the mood. Such a period of time is upon us now. Millions of us are aware of this change but most of us are not certain exactly which direction the storm will head, how strong it will be, and exactly where it will come ashore. Nevertheless, if we were on the shore, most of us know we need to do something different. The following are some of the changes I am watching with concern, wonder, andexcitement . . . changes that will help fuel the perfect storm. Change #1: Millions will be left destitute in old age. The World War II generation had secure jobs, secure retirements, and medical care in old age. Beginning with the baby boomers, that all changed. Although we are feeling the shift in the wind today, and we feel the mood change caused by the Enron scandal, I forecast that the fullforce of this storm will hit around 2025, some fifty years after the act was put into law. By 2025 we will have millions of baby boomers who will be entering their eighties out of money, nearly out of time, and needing the most medical care of their lives. Without government programs such as Social Security and Medicare, which will probably be financially bankrupt, an aged and poor population...