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America’s new economy
Many folks are playing by yesterday’s rules in today’s new economy, and that’s making it hard for them to keep up let alone get ahead. Here’s how to fix that. Get ahead more easily by grabbing your free copy of the 7-Step Credit Card Debt Slasher here.
What’s old is new again in the new economy
In the 1976 movie Network, Howard Beale is a floundering news anchor who goes on a tangent on live television to rouse the citizenry from apathy. He initiates the first step for much-needed change in unemployment, inflation, national and international politics and crime, including economic crime, by lighting a fire in people’s bellies to get angry. This isn’t unlike today’s politics and the new economy.
Beale says, “Things have got to change. But first, you’ve gotta get mad! You’ve got to say, ‘I’m mad as hell, and I’m not going to take this anymore!’” He acknowledges for anything to get better, it starts with us.
Finding the power within ourselves
Worthwhile change almost always comes from us. The Law of Attraction says that our positive and negative thoughts and actions transmit corresponding positive and negative thoughts and actions that reverberate back to us. This gives each of us the profound power to control our own destiny.
The first step to change a negative situation into a positive one is to first think about a positive alternative. Napoleon Hill said, “The starting point of all achievement is desire.”
The responsibility that the Law of Attraction puts on us is accountability. The rich and powerful take pride in being self-made. They boast of their accomplishments. They own their results. On the contrary, many who are not rich and powerful often fault someone or something else for their results.
While neither is 100% accurate, there is much to be said for how our thoughts and actions today affect our tomorrow. Religions throughout history, including Christianity, Buddhism and Taoism have taught in one form or another that “energy flows where attention goes”. What we focus on becomes our reality.
This can have positive, negative or neutral consequences. The yellow car theory says that when we buy a yellow car, all of a sudden we notice lots of yellow cars on the road.
This gives us power. If we find gratitude in our situation, regardless of our situation, our vision becomes our reality. If we are ungrateful for our situation, regardless of our situation, our vision, again, becomes our reality.
The innate response of many is “yeah, well, you don’t know my situation.” True. As Victor Fankl, the famous Austrian Holocaust survivor, neurologist and psychiatrist said, “Between a stimulus and a response there is a space. In that space is our power to choose our response. In that response lays our growth and our freedom.”
Fankl, undoubtedly, experienced one of the great human atrocities in modern times. It was his belief that he would survive that made it so.
Today’s new economy, WikiLeaks, The Panama Papers, Pandora Papers, the Big Lie, the handling of COVID-19, we don’t have a lot of love for Constitution Avenue, Pennsylvania Avenue and Wall Street right now. Regardless of political affiliation or affinity towards an economic theory, government and business have directly and indirectly made their lives better at our expense.
While we believe it’s fair, even our duty, to fairly appropriate blame and call for change, we believe most changes come first from within each of us.
The new economy that’s kinda rigged
In The Real Reason for Income Inequality, we talk about the shift in political and monetary theory and a series of changes in federal laws that made workers second-class citizens. These changed traditional business economics for corporate executives from growth and longevity to shareholder value that increased the wealth gap.
A high percentage of corporate executives’ salaries come in stock options, which creates a conflict of interest. The result is that corporate executives’ salaries have increased 10.2% annually for the last two decades at the same time that median household incomes increased 0.84% annually.
Below is how we can take ownership of our circumstances and increase our incomes and net worth. This isn’t easy, but change rarely is.
1. Demand better compensation and conditions in the new economy
The first thing employees must do is demand more return for our work. When we negotiate salaries for a new job or annual salary increase, we must demand more money for our work. If the free market dictates wages, wages will only increase when we refuse to work for less. If the free market for corporate executives’ salaries demands a 10.2% annual wage increase, so does ours.
This is why we’re excited about The Great Resignation. Workers are saying, “We’re done with the status quo. We want better working conditions and better pay.” It’s our hope that this isn’t temporary.
Then we must demand to participate in company profits just as corporate executives do. We must ask our employers, “Other than my salary, how do I financially benefit from the company’s profits?”
Throughout the eighties and nineties until the tech bubble burst, it was common for publicly traded companies to generously offer stock options and profit-sharing plans so employees would benefit from the company’s success. With shareholder value the holy grail of corporate executives, share buybacks are more common and stock grants less so. This is because stock grants dilute shareholder value.
We must demand participation in these rewards. We must not overweight our portfolios in company stock, though.
2. Demand better representation in the new economy
Citizens must become more vocal and stop voting for the status quo. We maintain a right to vote, but the power of that right is rendered meaningless when we dismiss politicians as “just politicians” and don’t hold them accountable. When we don’t apply the same standards to our party as we do to another party, we show we’re more concerned about winning elections than doing what’s right for America.
We must not simply vote against the other party or candidate. This isn’t a winning strategy for the country. The political class and media have usurped citizens’ right to choose candidates and all but elect the country’s president and other political leaders. We now have a party making it impossible for some people to vote.
We must stop being married to a political party that, in all honesty, is no different from the other and both of whom are in bed with big business. We must apply extra scrutiny to career politicians whose careers are subsidized by business and who receive kickbacks for favors.
Finally, understand that CEOs, bosses, unions and union leaders don’t always work in our or our company’s and country’s best interest. Often our best interest is not aligned with theirs. To have respect and loyalty to a business or organization is not the same as letting that business or organization take advantage of us.
3. Make our money talk in the new economy
In 6 Ways to Better Manage Your Money, we discuss our concern with American consumers agreeing to take on more and more debt for longer and longer terms against their best interest. This willingness only inflates the cost of the very products and services many already cannot afford today, especially with today’s high inflation rate.
4. Leave the spending and leveraging classes
Bluntly put, we must close our wallets to unconscious spending. We can no longer buy cars and houses that we can’t afford. We must understand that everyone isn’t fit for college – and that’s a good thing! Making every high school graduate go to college puts many in poor financial situations and devalues college degrees.
We must shift from an unbridled consumption society to a justified consumption society. That means we must buy less, consume less and throw away less. Despite the fact that food prices in the U.S. have risen recently, food in America is cheap. This is why some claim we don’t value food.
Because of overly-conservative food preparation and preservation standards, America throws away nearly 50% of our food. This totals $165 billion dollars, or $1,437 per household, worth of food thrown away annually. There has been a 50% increase in food waste since the 1970s. This level of waste is avoidable. Food is just one example of our consumption addiction. A car can and should last more than three to five years. With proper maintenance, we can own cars for 10 or more years.
Leasing a car is a ridiculous waste of money. There’s no reason to trade cars in before they’re paid off.
The average family can reasonably live in a 2,000 square foot house. Not only does this save on cost per square foot, but saves on heating, gas, electricity and other expenses. We don’t need to buy clothes every time there’s a sale or we’re bored.
Again, we must no longer overextend ourselves and we must stop over-consumption. The rich spend most of their time and money on ways to make more money. We must do likewise. A $700 monthly car payment with no retirement savings makes no sense. A $5,000 vacation brought to us by Chase is the opposite of investing like the rich.
5. Join the saving and investing class
Spend wisely. Consumption is necessary, but we must consume consciously. This means we must know the value of our purchases and understand that cheaper is not always better. Teaser rates and sales are just that, teasers. We must read the fine print. We must close our wallets to businesses that take advantage of the consumer through tax loopholes, supply manipulation and unethical labor practices.
We must have a security account comprised of three to six months’ worth of living expenses. This makes us less beholden to work for bosses and companies we don’t like. An emergency savings account eliminates the need to take the first job offer after being let go or quitting.
We must invest more. We can’t spend our way to wealth. No one ever became rich living off of credit cards. Banks get rich off of us living off of credit cards. We must make our money work harder for us than we work for our money. Our investment income must exceed our living expenses. This will make us financially independent and liberate us from the need to work at all.
6. Know that you’re rich
If what we focus on expands, a belief that we’re rich leads to riches in the new economy. Whether through the powers of the universe, our god of choice or simply a paradigm shift, our financial situation will change when we change our perspective.
In The #1 Issue with America’s Anti-Savings Policies, we talk about how America’s entire economy is based on consumption. Even supposed fiscal conservatives promote consumption and support the Federal Open Market Committee’s easy money policies that hurt younger and older Americans the most, while banks churn out cheap loans for businesses.
7. Bank for the new economy
In “Turning a Little Money Into A Lot”, we discuss how we can leverage bank promotions and offers to our benefit and earn an extra 10% to 40% on our money. This approach is based on the strategy of the wealthy who seek discounts and extra perks. It points out that there’s a system to take advantage of, but don’t let it take advantage of you.
How do the rich stay rich? They either create a system or use the current system to maintain and grow their wealth.
Another way to bank to your benefit is to bank small and locally. Small, local banks tend to offer better customer service with lower fees. They keep our money local and support the local economy. Reward checking accounts at smaller, local banks tend to be more lucrative for the customer.
Finally, it’s easier to ask for better rates, more favorable terms and conditions and other benefits from someone who knows our name and lives in our community.
There’s a popular movie played every Christmas that portrays the difference between small and big banks. Check it out!
This is how personal and national economic improvement can start with us. By shaking our apathy and focusing on what we can control, we can use the power of positive thinking and positive action to overcome the new economy.
Get more help to survive in the new economy:
- The #1 Problem with America’s Anti-Savings Policies
- 37 Best Tips on How to Become Debt Free
- How to Make More Money with a Side Hustle