Presentation Transcript

1. America’s Financial Future America’s Financial Future
2. 14 Challenging Trends: 14 Challenging Trends: America’s Financial Future
3. 14 Challenging Trends: 1. ‘Great Recession’ “Great Recession” Great Depression - Began in United States with stock market crash October 29, 1929 - Lasted approx. 10 years - Unemployment in U.S. reached 25% Great Recession - 2008 through . . . - A ‘new norm’ of ‘endless’ recession - Unemployment in Nov 2009 – 10.2% America’s Financial Future
4. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values Real Estate Values Great Depression National 5 Year Home Value Decrease – 25.9% Great Recession National 4 Year Home Value Decrease – 25% Mortgage Holders with Home Values less than Mortgage Balance – Wikipedia – www.zillow.com as of Nov 2010 23.2% America’s Financial Future
5. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs Health Care Costs Health Care Inflation Overall Inflation Prior to creation of Medicaid and Medicare in 1965 Slightly higher Since 1965 230% higher Wall Street Journal October 20, 2008 http://online.wsj.com/article/ SB10001424052748703746604574461610985243066.html America’s Financial Future
6. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education Public Education America’s Financial Future
7. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Energy Dependence America’s Financial Future
8. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Great Retirement Options 6. Pensions, Soc sec, 401(k) Pension Plans In 1980 82% In 2010 11% Social Security Benefits as a % of contribution by 2014 401(k) contributions As a % of income Never been lower America’s Financial Future
9. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Entitlement Programs 6. Pensions, Soc sec, 401(k) 7. Entitlements America’s Financial Future
10. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Federal Budget Deficits 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits America’s Financial Future
11. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Aging Parents 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents America’s Financial Future
12. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Workers will not retire 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits Retire at age 65? 9. Aging parents 10. Workers will not retire 1980 14% 2010 75% America’s Financial Future
13. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Debt levels still high 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents 10. Workers will not retire 11. Debt levels America’s Financial Future
14. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Taxes will increase 6. Pensions, Soc sec, 401(k) 7. Entitlements 8. Budget deficits 9. Aging parents 10. Workers will not retire 11. Debt levels 12. Taxes America’s Financial Future
15. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence Adult children ‘obligations’ 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’ America’s Financial Future
16. 14 Challenging Trends: 1. ‘Great Recession’ 2. Real estate values 3. Health care costs 4. Public education 5. Energy Dependence ‘Away from home missions’ 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’ America’s Financial Future
17. 22 Compelling Trends: 22 CompellingTrends: America’s Financial Future
18. 22 Compelling Trends: 1. Purging inefficient prosperity Purging inefficient prosperity America’s Financial Future
19. 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable Real estate more affordable America’s Financial Future
20. 22 Compelling Trends: 1. Purging inefficient prosperity 2. Real estate more affordable 3. Corporate profits and cash strong Corporate profits and cash are strong . . . and they are investing! Salt Lake Tribune – Nov 16, 2010 America’s Financial Future
21. 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 and allocation worked http://www.advisorone.com/article/ibbotson-argues-asset-allocation-diversification-still-valid America’s Financial Future
22. 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 Still low inflation and interest rates America’s Financial Future http://reason.com/archives/2009/11/17/wheres-that-inflation
23. 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 Extraordinary advances in: Medicine Regenerative Medicine – grow new cells and organs Molecular disease diagnosis Genome/DNA risk tolerance profiling Anti-aging medications America’s Financial Future
24. 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 Extraordinary advances in: Medicine Energy Efficiencies America’s Financial Future
25. 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 Extraordinary advances in: Medicine Energy Efficiencies Transportation America’s Financial Future
26. 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 Extraordinary advances in: Medicine Energy Efficiencies Transportation Education FACTS/INFORMATION KNOWLEDGE/UNDERSTANDING WISDOM/APPLICATION IMAGINATION/CREATIVITY VISION/INSPIRATION America’s Financial Future
27. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems Extraordinary advances in: Medicine Energy Efficiencies Transportation Education Information Systems America’s Financial Future
28. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners More high income earners Higher expectations America’s Financial Future
29. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier You will live longer and healthier http://singularityhub.com/2010/03/08/ get-ready-to-live-past-100/ America’s Financial Future http://www.foxnews.com/health/2010/05/12/pill-help-live-past-available-years/
30. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances Larger inheritances http://www.bmo.com/pdf/mf/prospectus/en/09-429_Retirement_Institute_Report_E_final.pdf America’s Financial Future
31. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension The ‘2030 Pension’ Reverse Mortgages America’s Financial Future
32. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners Government ‘bailouts’ have ‘worked’ 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked http://www.propublica.org/special/government-bailouts America’s Financial Future
33. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier Workforce assimilation 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked Agrarian 12. Amazing workforce assimilation Industrial Manufacturing Services Two income families Computer displacement International relocation International outsourcing Immigration America’s Financial Future
34. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier American Demographics 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 100 Million New Workers by 2050 Highest birthrates Among advanced countries America will emerge by midcentury as the most affluent, culturally rich, and successful nation in human history Immigration Often successful Sacrificed everything Better life for families Live very frugally Well documented resourcefulness America’s Financial Future Pay taxes while here
35. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier American: Creativity Imagination Resourcefulness insight and . . . 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 14. Creativity, imagination and resourcefulness America’s Financial Future
36. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances Higher education skilled workforce 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 14. Creativity, imagination and resourcefulness 15. Higher education – skilled workforce America’s Financial Future
37. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances Likely new tax 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation Federal Sales 13. 2050 – 100 Million More Consumption 14. Creativity, imagination and resourcefulness Value-added 15. Higher education – skilled workforce 16. Strong population demographics Transaction 17. ‘Transaction tax’ America’s Financial Future
38. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances American economy HAS to grow 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 14. Creativity, imagination and resourcefulness 15. Higher education – skilled workforce 16. Strong population demographics 17. ‘Transaction tax’ 18. The American economy has to grow Stephen J. Rose Research Professor at Georgetown University Senior Advisor to Robert Reich Secretary of Labor America’s Financial Future
39. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier American economy still the world leader 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 14. Creativity, imagination and resourcefulness 15. Higher education – skilled workforce America: the Crossroads Nation 16. Strong population demographics http://www.sltrib.com/csp/cms/sites/sltrib/pages/ printerfriendly.csp?id=50640829 17. ‘Transaction tax’ 18. The American economy has to grow 19. American economy still world leader America’s Financial Future
40. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier New financial market regulations 9. Larger inheritances 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 14. Creativity, imagination and resourcefulness 15. Higher education – skilled workforce 16. Strong population demographics 17. ‘Transaction tax’ 18. The American economy has to grow 19. American economy still world leader 20. New financial market regulations America’s Financial Future http://www.brookings.edu/opinions/2010/0716 _financial_reform_elliott.aspx
41. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances ‘Armaggedon’? 10. Home equity – the next pension 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 14. Creativity, imagination and resourcefulness 15. Higher education – skilled workforce 16. Strong population demographics 17. ‘Transaction tax’ 18. The American economy has to grow 19. American economy still world leader 20. New financial market regulations 21. Armaggedon? America’s Financial Future
42. 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 6. Extraordinary advances Medicine, energy, transportation, education, information systems 7. High income earners 8. You will live longer and healthier 9. Larger inheritances 10. Home equity – the next pension Latter-day-Saint strengths 11. ‘Government bailouts’ have worked 12. Amazing workforce assimilation 13. 2050 – 100 Million More 14. Creativity, imagination and resourcefulness 15. Higher education – skilled workforce Welfare system 16. Strong population demographics Highly educated 17. ‘Transaction tax’ Multi-lingual 18. The American economy has to grow 19. American economy still world leader Highly organized 20. New financial market regulations Missionary disciplined 21. Armaggedon? Financially strong 22. LDS Strengths Daily seminary trained International presence Perpetual education fund Genealogical records America’s Financial Future
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: ‘Great Recession’ – purging inefficient prosperity In the middle of every difficulty lies opportunity – Albert Einstein Real estate desperately needed to adjust – ‘brilliant idiocy’ and ‘irrational exuberance’ altered dramatically Corporate profits are strong, cash is at highest levels, we can endure a second dip – this is the ultimate driver of stock values Health care – extraordinary advances Energy utilization, transportation, education, information systems Middle class shrank – far more higher income opportunities You will live much longer and healthier than your parents Larger inheritances than your parents or grandparents Home equity – a large tool for retirement income History of ‘government bailouts’ – more positive than most realize 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 Population growth demographics of America stronger than any other nation Creativity, imagination, vision and resourcefulness – stronger in America than anywhere Tax increase will come in ‘transaction tax’ Armeggeden? Matthew 14, ‘New Jerusalem’, Luke 17 – he feared The American economy has to grow and always has America’s Financial Future
46. FACTS/INFORMATION KNOWLEDGE/UNDERSTANDING WISDOM/APPLICATION IMAGINATION/CREATIVITY VISION/INSPIRATION