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America’s Financial Future. 14 Challenging Trends: America’s Financial Future.

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Presentation on theme: "America’s Financial Future. 14 Challenging Trends: America’s Financial Future."— Presentation transcript:

1 America’s Financial Future

2 14 Challenging Trends: America’s Financial Future

3 “Great Recession” 14 Challenging Trends: America’s Financial Future Great Depression Great Recession - Began in United States with stock market crash October 29, through... - Lasted approx. 10 years - Unemployment in U.S. reached 25% - A ‘new norm’ of ‘endless’ recession - Unemployment in Nov 2009 – 10.2% 1. ‘Great Recession’

4 Real Estate Values 14 Challenging Trends: America’s Financial Future Great DepressionNational 5 Year Home Value Decrease – Great RecessionNational 4 Year Home Value Decrease – Mortgage Holders with Home Values less than Mortgage Balance – Wikipedia – as of Nov % 25% 23.2% 1. ‘Great Recession’ 2. Real estate values

5 Health Care Costs 14 Challenging Trends: America’s Financial Future Prior to creation of Medicaid and Medicare in 1965 Since 1965 Slightly higher Health Care Inflation 230% higher Overall Inflation Wall Street Journal October 20, SB html 1. ‘Great Recession’ 2. Real estate values 3. Health care costs

6 Public Education 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education

7 Energy Dependence 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence

8 Great Retirement Options 14 Challenging Trends: America’s Financial Future Pension Plans In 1980 Social SecurityBenefits as a % of contribution 82% by 2014 In % 401(k) contributions As a % of incomeNever been lower 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k)

9 Entitlement Programs 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements

10 Federal Budget Deficits 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits

11 Aging Parents 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents

12 Workers will not retire 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents 10. Workers will not retire 1980 Retire at age 65? 14% %

13 Debt levels still high 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents 10. Workers will not retire 11. Debt levels

14 Taxes will increase 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents 10. Workers will not retire 11. Debt levels 12. Taxes

15 Adult children ‘obligations’ 14 Challenging Trends: America’s Financial Future 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents 10. Workers will not retire 11. Debt levels 12. Taxes 13. Adult children ‘obligations’

16 ‘Away from home missions’ 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents 10. Workers will not retire 11. Debt levels 12. Taxes 13. Adult children ‘obligations’ 14. ‘Away from home missions’ 14 Challenging Trends: America’s Financial Future

17 22 Compelling Trends: America’s Financial Future 22 Compelling Trends:

18 Purging inefficient prosperity America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity

19 Real estate more affordable America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable

20 Corporate profits and cash are strong cash are strong America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong Salt Lake Tribune – Nov 16, and they are investing! investing!

21 Diversification and allocation worked America’s Financial Future ALLOCATION 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 4. Diversification and allocation worked allocation-diversification-still-valid

22 Still low inflation and interest rates America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

23 America’s Financial Future Regenerative Medicine – grow new cells and organs Molecular disease diagnosis Genome/DNA risk tolerance profiling Anti-aging medications Medicine Medicine Extraordinary advances in: 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

24 America’s Financial Future Medicine Medicine Extraordinary advances in: Energy Efficiencies Energy Efficiencies 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

25 America’s Financial Future Medicine Medicine Extraordinary advances in: Energy Efficiencies Energy Efficiencies Transportation Transportation 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

26 America’s Financial Future Medicine Medicine Extraordinary advances in: Energy Efficiencies Energy Efficiencies Transportation Transportation Education Education FACTS/INFORMATION KNOWLEDGE/UNDERSTANDING WISDOM/APPLICATION IMAGINATION/CREATIVITY VISION/INSPIRATION 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

27 America’s Financial Future Medicine Medicine Extraordinary advances in: Energy Efficiencies Energy Efficiencies Transportation Transportation Education Education Information Systems Information Systems 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

28 More high income earners Higher expectations America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

29 You will live longer and healthier America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 4. Diversification and allocation worked 5. Resistance to inflation, interest rates available-years/ get-ready-to-live-past-100/

30 Larger inheritances America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 4. Diversification and allocation worked 5. Resistance to inflation, interest rates 429_Retirement_Institute_Report_E_final.pdf

31 The ‘2030 Pension’ Reverse Mortgages America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

32 Government ‘bailouts’ have ‘worked’ America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

33 Workforce assimilation Agrarian Agrarian Computer displacement Computer displacement Two income families Two income families Services Services Manufacturing Manufacturing Industrial Industrial International relocation International relocation International outsourcing International outsourcing Immigration Immigration America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 4. Diversification and allocation worked 5. Resistance to inflation, interest rates

34 AmericanDemographics America’s Financial Future 100 Million New Workers by 2050 Highest birthrates Immigration Among advanced countries America will emerge by midcentury as the most affluent, culturally rich, and successful nation in human history 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 4. Diversification and allocation worked 5. Resistance to inflation, interest rates – 100 Million More Often successful Sacrificed everything Better life for families Live very frugally Well documented resourcefulness Pay taxes while here

35 American: Creativity Creativity Imagination Imagination Resourcefulness Resourcefulness insight and... insight and... America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 14. Creativity, imagination and resourcefulness 4. Diversification and allocation worked 5. Resistance to inflation, interest rates – 100 Million More

36 Higher education skilled workforce America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 14. Creativity, imagination and resourcefulness 4. Diversification and allocation worked 15. Higher education – skilled workforce 5. Resistance to inflation, interest rates – 100 Million More

37 Likely new tax Federal Sales Federal Sales Value-added Value-added Consumption Consumption Transaction Transaction America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 16. Strong population demographics 14. Creativity, imagination and resourcefulness 17. ‘Transaction tax’ 4. Diversification and allocation worked 15. Higher education – skilled workforce 5. Resistance to inflation, interest rates – 100 Million More

38 American economy HAS to grow America’s Financial Future Stephen J. Rose Research Professor at Georgetown University Senior Advisor to Robert Reich Secretary of Labor 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 16. Strong population demographics 14. Creativity, imagination and resourcefulness 17. ‘Transaction tax’ 18. The American economy has to grow 4. Diversification and allocation worked 15. Higher education – skilled workforce 5. Resistance to inflation, interest rates – 100 Million More

39 American economy still the world leader America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 16. Strong population demographics 14. Creativity, imagination and resourcefulness 17. ‘Transaction tax’ 18. The American economy has to grow 4. Diversification and allocation worked 19. American economy still world leader 15. Higher education – skilled workforce 5. Resistance to inflation, interest rates – 100 Million More printerfriendly.csp?id= America: the Crossroads Nation

40 New financial market regulations America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 16. Strong population demographics 14. Creativity, imagination and resourcefulness 17. ‘Transaction tax’ 18. The American economy has to grow 4. Diversification and allocation worked 19. American economy still world leader 20. New financial market regulations 15. Higher education – skilled workforce 5. Resistance to inflation, interest rates – 100 Million More _financial_reform_elliott.aspx

41 ‘Armaggedon’? America’s Financial Future 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 16. Strong population demographics 14. Creativity, imagination and resourcefulness 17. ‘Transaction tax’ 21. Armaggedon? 18. The American economy has to grow 4. Diversification and allocation worked 19. American economy still world leader 20. New financial market regulations 15. Higher education – skilled workforce 5. Resistance to inflation, interest rates – 100 Million More

42 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong 6. Extraordinary advances Medicine, energy, transportation, education, information systems education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 16. Strong population demographics 14. Creativity, imagination and resourcefulness 17. ‘Transaction tax’ 21. Armaggedon? 18. The American economy has to grow 4. Diversification and allocation worked 19. American economy still world leader 20. New financial market regulations 15. Higher education – skilled workforce 5. Resistance to inflation, interest rates America’s Financial Future Latter-day-Saintstrengths Welfare system Welfare system Financially strong Financially strong Missionary disciplined Missionary disciplined Highly organized Highly organized Multi-lingual Multi-lingual Highly educated Highly educated Daily seminary trained Daily seminary trained International presence International presence Perpetual education fund Perpetual education fund Genealogical records Genealogical records 22. LDS Strengths – 100 Million More

43 We must have faith in the future regardless of the ultimate eventualities. One of the greatest calamities in this world would be the calamity of sitting down and waiting for calamities. We must not let the things we can’t do keep us from doing the things we can do. We must not let remote possibilities or even imminent probabilities keep us from moving forward with all earnestness and all effort. I should like to say to the young people of this generation that they too must have faith in the future. In spirit of all the uncertainties, they must go forward and prepare themselves as best they can for all the problems and opportunities of life. Whatever may come here or hereafter, the future will always be better for those who are best prepared. “No generation has ever lived without facing uncertainty. If those who faced the uncertainties of ten or twenty-five or fifty years ago had sat by and waited for what seemed to them to be imminent calamities, we should not have had the able and ready and well-qualified men that we have today, and that we need and shall need in the next generation. Richard L. Evans 1950 America’s Financial Future

44 Wilford Woodruff I would live as if it [the end of time] were to be tomorrow—but I am still planting cherry trees! I am not afraid of tomorrow, for I have seen yesterday, and I love today William Allen White America’s Financial Future

45 15 Inspiring Trends: 1.‘Great Recession’ – purging inefficient prosperity In the middle of every difficulty lies opportunity – Albert Einstein 2.Real estate desperately needed to adjust – ‘brilliant idiocy’ and ‘irrational exuberance’ altered dramatically 3.Corporate profits are strong, cash is at highest levels, we can endure a second dip – this is the ultimate driver of stock values 4.Health care – extraordinary advances Energy utilization, transportation, education, information systems 5.Middle class shrank – far more higher income opportunities 6.You will live much longer and healthier than your parents 7.Larger inheritances than your parents or grandparents 8.Home equity – a large tool for retirement income 9.History of ‘government bailouts’ – more positive than most realize 10.The workforce amazingly absorbed: Shifts from agrarian, industrial and manufacturing economies; two income families; computer displacement; international corporate relocations and outsourcing; and documented and undocumented immigrants 11.Population growth demographics of America stronger than any other nation 12.Creativity, imagination, vision and resourcefulness – stronger in America than anywhere 13.Tax increase will come in ‘transaction tax’ 14.Armeggeden? Matthew 14, ‘New Jerusalem’, Luke 17 – he feared 15.The American economy has to grow and always has America’s Financial Future

46 FACTS/INFORMATION KNOWLEDGE/UNDERSTANDING WISDOM/APPLICATION IMAGINATION/CREATIVITY VISION/INSPIRATION


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