What could be more demotivating for a twenty-year old to hear they not use some of the money they are earning, and not have access to it for forty years?
The message we send to young people is so discouraging, that it obviously unsurprising that many do not save nor invest.
Since people just of out school are often at entry-level salaries, so to bombard them with exhortations to put aside some of their already small incomes for some many-decades-in-the-future event seems to me just futile and ineffective.
How To Change The Story
It seems to me, as mentioned previously, that the better way is to tell younger workers to:
BUILD WEALTH!
And who would not want to build wealth? Building wealth seems such a more positive and engaging prospect than to hear “save for retirement.”
1754.
What come to the mind of a young person when they hear retirement? I can tell you that retirement brings up images of old people, people moving slowly, people in hospitals, people playing golf, Florida, cruise ships, shuffleboard. And so on. Not what most young people associate with their own lives.
But as young people now in the working world, they are exposed to people who have more money than themselves. Fellow workers on the job longer likely have higher salaries, and a higher standard of living. They are now exposed more as consumers in the working world.
1910.
As a result, it seems to me that the prospect of building wealth is much more appealing than saving for retirement.
What Is The Difference?
Not much. There is not much difference between building wealth and saving for retirement. Build an emergency fund. Save, then invest. If 401K or IRA are available, use them. Consider what assets are appropriate for building wealth. Use part of one’s savings to invest. Avoid depreciating assets. Avoid speculation. Look for appreciation. Seek to cut spending to save so one can have more later. Investigate real estate. Automate as much as you can.
Later is Not Now.
Of course, over time, anyone who is building wealth will understand that it parallels saving for retirement. In fact, I would posit that someone who spent their career building wealth will probably be better off than someone who focused on saving for retirement. But that is just my opinion.
Intentions
I would think that most people have good intentions about wanting to save money. But the reality of day-to-day living gets in the way: bills and expenses, the desire to “have fun,” peer pressure to spend, are all distractions that drain one’s motivation and one’s personal strength. Hearing “Save for Retirement!” is not a solution.
1810-1819.
But!
But hearing “Build Wealth!” is something better, in my view. The concept of building wealth imparts personal strength and personal motivation. It puts a person on path for thinking for themselves. “OK, I am thinking building wealth is a great idea. I should do it. How can I start?”
Once a person gets to the “How can I start?” place, they are ready to begin thinking for themselves, at least in this area. And strength of purpose is a great resource for staying the course. At this point, hopefully, they begin to weigh their needs and desires.
And that’s how it all begins.
So, my point is that if you are in your twenties, don’t think about saving for retirement. Think about building wealth.
What do you think? What do you think is a better message? Let me know your opinion, see the Contact page how to respond.
Illustration of a Southern Magnolia Tree is from “The Natural History of Carolina, Florida and the Bahama Islands” (1754), created by Mark Catesby.
The first photographs of a snowflake were done by Wilson Alwyn Bentley, a farmer who would live all his life in the small town of Jericho, Vermont. Published 1910.
The engraving of a nineteenth century interpretation of dancing in the Middle Ages, is from approx. 1801-1819, and is from the Dance collection of the New York Public Library.
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