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Listening this morning to a newscaster discuss the state of the economy, polls seem to show that many people have accepted our current sluggish growth and relatively high unemployment as the “new normal”.  But most distressing was the fact that people seem to also feel this new normal means financial security is no longer achievable for the majority of Americans.  That couldn’t be further from the truth.

For more than 35 years now, we have tried to educate our clients, prospective clients, and anyone who would listen about how to manage money wisely in order to achieve basic financial security – whether in good times or in lousy times.  From the feedback we’ve received, we seem to be doing a good job, helping people understand it’s about focusing on the basic building blocks.  It’s not about get-rich schemes, it’s not about timing the market, and it’s not about just being lucky.

It’s about the basics:  live modestly, delay some gratification, put a savings plan on autopilot, reduce risk where cost effective, diversify properly and avoid investment fads.  Despite the severe economic downturn and the challenges of the last several years, we still believe, and see evidence that, financial security is attainable.

Sadly, this belief is under relentless attack.  Critics, who more often than not have an agenda or a scheme to sell, have a quiver full of anecdotal evidence to support their dour outlooks.  Jobs are not as secure as they used to be, education and medical costs seem astronomical, inflation seems always right around the corner, Washington appears broken, etc.  The list could easily be continued.

Their prescription is always the same: some vague notion of a complete overhaul of the system, or of the way we approach work, or how our society is structured.  There is often times a product or an investment system being offered which is the only way to avoid the looming catastrophe, but even for those commentators who are just commenting (not selling) there is a strong theme that life’s risks can no longer be avoided.  In the rat race of life, now, they say, the rats are going to win.

Those who postulate the end of the American dream and storm clouds forever gain media coverage and audiences when times are tough.  Sadly, the media (who should know better) and too many in the audience forget to look back at similarly tough times to reflect on the efforts which brought previous generations to financial security.  They fail to see that success from the depths has always been possible.

Are we really to believe that our downturn is worse than the Great Depression?  Are our social and political problems more disabling than those facing the nation during the infamous stagflation years of the late 70s?  The answer to both (and to a number of other examples we could cite) is no.  It’s not worse today.  The American dream was forged and realized by a generation which survived the Great Depression and one which persevered through the listlessness that was stagflation.  We’ve been here before, we’ll be here again.  There will always be crises, but there will always be a recovery for those who don’t lose hope.

What’s important at the individual level is whether someone is broken or strengthened by the experience.  A new client came into our office today and shared some of his personal history – a history growing up during tough times, without much encouragement, facing roadblocks.  He persevered, obtained a college degree, then a law degree, took a menial job, then a less menial job, got married and started a family, got better jobs.  He’s successful today because he followed a well-worn path:

·         He lived modestly,

·         He delayed some gratification (creating some discretionary cashflow),

·         He started an automatic savings plan,

·         He identified and reduced the risk he could afford to,

·         He diversified his investments and stuck to it, and

·         He never bought into investment hype or panic.

At First Financial Consulting, we are still committed to helping our clients achieve their dreams and financial security.  They’re doing it every day, steadily bit by bit.  Interestingly, our clients come to us from all economic strata.  We have the recently graduated in their first job who want to save and pay off student debt; we help them.  We have the high earners who somehow manage to spend more than what they earn and thus find themselves falling backwards; we help them.  We have the pre-retirees who need to know that they can “make it”;  we help them.

We’ve helped our clients through thick and thin.  We helped them yesterday; we help them today; and Lord willing, we’ll help them tomorrow.  There’s nothing about the economy or the markets today that prohibits anyone from achieving their American dream.  You just have to have the dream. We can help you execute the basics.

So what’s your dream?  Whatever it is, we’re here to help!