We may not be able to anticipate or even fathom the kind of change that happens around us, but one thing is certain. These changes—even the ones that seem impossible—happen on a regular basis.
As a teenager in the 1980s the number one fear for children was the threat of nuclear war. I can remember the drills under our tables at school. Ronald Reagan had just become president and called Russia and their leader Leonid Brezhnev “The Evil Empire.”
Eight years later, life found me attending a week long educational trip to Berlin, Germany. I had always heard about The Berlin Wall but did not truly know its history. This 12-foot high, 100 mile concrete barricade completely cut off West Berlin from surrounding East Germany and from East Berlin. This blockade came to symbolize the Iron Curtain that separated Western Europe and the Eastern Bloc during the Cold War.
While there, I embarked on a day long sojourn that would change my view of the world we live in. My group passed through the legendary crossing point; Check Point Charlie. We immediately left the bright lights of the progressive and modern westside that embodied capitalism for the gloomy, dilapidated east. It was intimidating viewing the guard towers that overlooked the “death strip” where over 5,000 people had attempted over the years to escape over, under and through the wall. Looking at the wall from both sides tells a story of two very different societies.
I can remember when President Reagan challenged Mikhail Gorbachev to destroy the Berlin Wall the previous year as he stood before the Brandenburg Gate and thundered “Tear down this wall!” As I walked along the wall, I certainly didn’t anticipate that it would ever come down.
A year later life found me in Istanbul, Turkey with a dear friend, Eric. The very next day was November 9, 1989. The impossible became a reality as the Berlin Wall fell! We viewed enormous euphoric crowds on storefront televisions celebrating as they chiseled away at the wall with pick axes. Eric and I looked at each other. We instantly knew we had to part take in such a historic event. The next morning we boarded a plane for Berlin with the scarce resource of a sledge hammer in hand.
Berlin had the atmosphere of the world’s largest college party. No one had ever seen anything like it. After hours of grueling work with never-ending blows to the four spikes we pounded into the solid wall, we successfully chiseled off a large two foot section of the wall that proudly sits today under Lucite on my mantle.
Most of us never conceived of the Berlin Wall coming down in our lifetimes. I know I certainly didn’t. Its fall would forever change the world in ways we could never imagine and start a domino effect of capitalism.
Crash!
Twenty years later another “impossible occurrence” became a reality and also changed the world in ways we could never have fathomed. This time it was a financial wall that collapsed along with other significant foundations. In 2008, the fate of the world’s economy was decided in just a matter of weeks.
If someone would have previously told me that the world’s largest mortgage company would declare bankruptcy along with the world’s largest insurance company and then the world’s largest stock brokerage firm would fall along with our country’s largest investment bank, savings and loan, and car company, I would have thought they were hallucinating! For crying out loud- Today, GM is still partially owned by us tax payers and Chrysler is owned by the Italians! The impossible became a reality!
During the same year in 2008, the stock market experienced its worst year in history and the real estate markets took a nose dive. People were immobilized with fear and if you were at or near retirement, your entire life plan did a 180 right in front of your eyes losing any profit you had made over the previous 10 years.
Volatility and uncertainty have certainly been recurring themes since then. I meet with successful people on a regular basis who have worked very hard and accomplished much over their lifetime. Many had dreams of retiring early and following their passions with world travel and exciting new hobbies. Today, they are now faced with a new reality. If your personal expectations of what you thought your future retirement might look like have changed over the past few years, you’re certainly not alone. Today the focus is on managing risk during all of this uncertainty and doing your best to get back on track to the future you envisioned. Retirement is by definition uncertain because the inconceivable often becomes reality and how can you plan for something you can’t even fathom.
Now What?
Although many indicators show the economy is improving and the markets are currently looking much brighter, national studies paint a discouraging picture showing that a majority of Americans run the risk of running out of money in retirement amid low savings rates, high unemployment and declining wealth. We still face a cluster of economic challenges, and I feel it is imperative to examine our relationship with the way we spend, save, borrow, invest and think about money. The days of using our homes as piggy banks to ride the appreciation highway are over. It is now time to rethink your priorities and get back on track to retirement.
Much of the talk on Wall Street as well as what we read in the media tends to focus on the current challenges, negative statistics and high emotions we are experiencing. But I feel we can all benefit by facing our present circumstances with as little emotion and as much information as possible about the strategies that can help mitigate the financial risks we run. How does one go about accomplishing this? Whether you are at or near retirement you plan for financial independence now more than ever before.
David is President of the Rosell Wealth Management in Bend. He is the Past President of the City Club of Central Oregon and a Past Chairman of the Bend Chamber of Commerce. David can be reached at 541-385-8831. Check out his latest financial videos: www.RosellWealthManagement.com.
Investment advisory services offered through Rosell Wealth Management, a State Registered Investment Advisor. Securities offered through ValMark Securities, Inc. Member FINRA, SIPC 130 Springside Drive, Ste 300 Akron, Ohio 44333-2431. 800-765-5201. Rosell Wealth Management is a separate entity from ValMark Securities.
