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Economic Difficulties

Many people do not become wealthy because they never decide to. 

Economic difficulties here at home, as well as around the world, should be sounding a bell loud enough for anyone to hear, prompting them to demand the absolute finest from their advisors. Our income and our wealth needs a wall of protection around it like never before.

The lack of jobs, the housing bust, unsustainable debt, etc., are challenges we all face during this economic downturn, but most people don't know how disproportionately the younger households in this country have been affected.

In fact, the wealth gap in the United States between young and old is at its widest margin ever. Census data shows that US households headed by a person age sixty-five or older has a net worth forty-seven times greater than a household headed by someone under age thirty-five.

Translated into dollars, the median net worth of a household headed by someone sixty-five or older is $170,494, while the median net worth of a household headed by someone thirty-five or younger is $3,662.

Theses staggering statistics lead me to two conclusions: First, younger people need guidance on creating wealth for themselves, and second, there needs to be a way that every household can have the high standards of financial advice I have been advocating throughout this book.

When looking at wealth creation, I think it is first necessary to understand the four underlying reasons why people don't become wealthy.

  1. Many people do not become wealthy because they never decide to. It simply never occurs to some people that they must decide they will create wealth or odds are it's not going to happen. People destined to be wealthy have habits that others do not. The thing is, anyone can develop the easy but necessary habits of wealth, but you must first choose to do so.
  2. Procrastination destroys wealth. Are you aware that by investing $100 a month beginning at age 21, odds are that you will retire wealthier than 99 percent of all Americans? How much easier can it be?
  3. If starting saving young enough is all we have to do, why doesn't every twenty-one-year-old do it? Too often, it's because people refuse to delay gratification. Instead of using the charge card, understand that there is nothing wrong with saving until you have enough to pay cash for that fancy large-screen TV. And do you really need 170 cable channels?
  4. People who have a short-term perspective rarely create lasting wealth. I don't understand why, but for some reason people have difficulty understanding that they will be older someday. Please recognize that an event that is going to take place fifty years from now requires at least as much planning and attention as the party you are going to next Friday night. There is a fine line between living for today and saving for tomorrow. I full recognize the need to enjoy one's life to the fullest because it is true that we never know which day will be our last. At the same time, we have to consider the "what if" we do get older someday and how prepared we'll be when we reach that point.

Knowing what prevents wealth is easy, but what about creating wealth? Let's assume you understand the points outlined above and at this moment you are choosing to be wealthy and, starting right now, you will no longer procrastinate when it comes to your future.

You realize that this means sometimes you'll have to delay gratification and you are determined to teach yourself to keep a longer-term perspective. You might also be recognizing that you need a plan. After all, this entire book is about having tangible goals and a comprehensive plan to safely achieve those goals.

Financial Fallout: Repairing the Broken Financial Services Industry for the American Investor

About the author: Bernie Unger resides in Grand Island, New York, as well as Winter Haven, Florida with his wife, Patrice. You may contact Bernie at http://unger.tateauthor.com.

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