[00:00:00] Eric: Someone asked me the other day, Eric, why there is no set system of retirement in this country. And I thought about it and I told him once upon a time there was not a set system, but there was a kind of a for. That everyone followed and little financial literacy was needed at that time because everyone just did the same thing.
[00:00:24] So I guess this is why I wanted to talk today and have a shorter show in order to get this point out there because one. What we did had, we just don't have anymore. And I guess this is why financial literacy is kind of a lost topic because it wasn't really needed back then. So we're going to take time to talk about what we once had as compared to what we don't have today.
[00:00:52] So we're going to talk a little history and see why financial literacy was untwine to return. And [00:01:00] as time goes by now, we're trying to get that back together. So let's get into this and let's get this started and come on,
[00:01:10] Host daughter: dad, stop playing around and play the music.
[00:01:20] Introducer: Have you ever wondered why some people seem to have it all financially do well off parents simply hand the children money or is there more to this welfare? Welcome to raising financial freedom, the pocket. We are here to talk about everything you never knew to teach your children when it comes to starting their financial future, the principles behind wealth and methods that are out there to teach your child about personal financial freedom.
[00:01:44] There was no real trick to earning other than learning. We are here to discuss, teach and grow with you. Raising financial freedom, the podcast with your host and concern here, Eric yard. Let us get right into today's show.[00:02:00]
[00:02:02] Eric: So let's go back to a time where the economy was good and things was picking up right after, uh, a world war, world war two. This is, I'm talking about the baby boomers era. Now, during that time, the population skyrocketed right after the world war. So now more houses. More clothes, war, food needs to be produced for all these people.
[00:02:28] Now that's a lot of goods and shelter that's needed. Women at that time were averaging four kids per household. So there was a demand. And now it's time to supply. So the economy moved in order to keep up. Now as time moved on, baby boomers had, I would say about four pillars. They could fall back on when it's their time to retire.
[00:02:53] As time went on, one was social security. Two was the appendage. [00:03:00] Three was, you know, savings. And then four was money that they had vested in the stock market. So now the golden formula is rockfall company for a couple of decades or so, or card, you will get a pension, then social security will kick in. Once you retire also, and you will have your savings and money that you've had vested in the stock market to back that up.
[00:03:25] And this was done for decades. There's no financial literacy that's needed here. You just followed simple cut and paste and it worked. And now the baby boomers gave birth to generation X. Now generation X is learning from the baby. Boom was the same formula that the baby boomers have been following. But things are about to change during generation is time.
[00:03:52] One of the core pillars is about to be facing. At this time, humans had a life expectancy [00:04:00] of somewhere around in this. But now this was changing. Humans were living longer and I mean like a couple of decades longer, and this was not sitting too well with companies. Then in the late seventies, a guy by the name of Ted Benna comes along and invents the 4 0 1.
[00:04:20] This 401k was supposed to be in addition to the retirement plan you had back then, I repeat, it was only supposed to be in it. Companies now strategically use this tool to phase out pensions and ultimately just get rid of pensions altogether and replace it with the 401k. So with that pillow gone and replaced with something of left strength people.
[00:04:47] Now you want to lean on. The other pillars until the great recession hits and the housing market bubble pops and savings, and the market is [00:05:00] under attack now from it. Now, whatever market gains with was built up from the decades before is now gone. And now baby boomers who want to retire, can't retire and have to enter back into the workforce.
[00:05:14] So now 401k replaced. The great recession, pretty much crippled and damaged the stock market and people savings. So that leaves social security. Now social security has been around for about 80 years, I would say, but as of the last official projection by social security administration, the funds could run out in yet.
[00:05:42] 35 at which point 79% of promised benefits would be payable. That is a clear indication that you cannot depend on the government for your retirement. So what sure. Fire golden formula do we have for generation X and [00:06:00] millennials and the generation after. I know of none. Do you. This is where, this is where we, as parents teach our children financial literacy and all the options that they have available to them.
[00:06:14] Now, what I went through was a quick brief history on why there is a great area at financial literacy in this country. And that is just one reason why, but the point is here. Now you're just going to stand on the sideline and hope that your child does better than what you did, knowing that they're not getting this type of financial literacy in school, or are you going to step in and be proactive and make sure your child and your child's children are financially smart.
[00:06:47] Or financially free to the point where retirement was thought of at an early age and the methods to retirement. Come to them as second nature. [00:07:00] It's all about family here at raising financial freedom, and we are going to go over the tools methods. Advice tips, tricks, everything that will help you lay down the foundation for your children to be financially fit or free.
[00:07:15] So that was my little brief history lesson for today. And I just want to voice my opinion on certain things at times, this is how you'll get to know me. And if you leave a comment on Twitter or Facebook or leave a review, this is how I will get. So until next time stay safe.
[00:07:37] Introducer: We really hope you enjoy this episode of financial freedom.
[00:07:41] The podcast stay connected with us directly through raising financial freedom.com. You could also join the discussion on social media, which you can also find links on our website. If you would like to speak with us, please send us an email through info@raisingfinancialfreedom.com and as always thank you for pushing your [00:08:00] mindset towards a better reality.
[00:08:01] This concludes the most thought provoking portion of your day. Don't forget to please like, and subscribe to stay fully up to date until next time. Be kind to yourself and each other. .