2011 - 2012

It’s been awhile since I updated the latest economic news. The Great Recession ended over two years ago, yet the economy is only slowly coming back. Let’s look at a few headlines and stories.

Scituate Harbor in winter

Mister Kitty Stretches

What is some advice for the younger generations?

Plan for the long run. Save money while you are young. Teach yourself the discipline to save 5% of your salary toward the long term. You may think your earnings will continue on an upwards trend. In reality, your earning potential will peak and begin to decline after you turn 45, unless you are really fortunate.

Use more technology and be current in your skills. Constantly update your skills – don’t wait for a job or your boss to plan your professional development or update your skills. Stay current and learn new things.

Make the effort to connect with people regularly and have conversations in your chosen career and industry, and also in other industries where you have interests. Keep building your network. Leverage social media through LinkedIn, Facebook and Twitter.  

Create a new American Dream for yourself. Recessions and depressions will happen again. It’s very cyclical. Look at the other decades. Life is important, build relationships where people reach out and really help each other. Stay in touch with your network. Pay it forward and help someone.

Count on the need for a rainy day fund and build one. Be careful with spending frivolously and understand financial risks. Don’t want too much “stuff” and don’t overspend your lifestyle.

And remember, your identity is not your job, your identity is you.

How will we view our career, retirement and professional development post-Great Recession?

There is no fast money. You need to chart your own career. There is a long-term impact to your decisions. Understand the long-term fit and chart how your career progresses. Don’t wait for someone else to build your career.

In J’s case, retirement is ten years away. There is no financial security to carry through his retirement years. He needs to build a new nest egg since he spent most of his long-term savings on survival and conducting an extended job search. Even with retirement in ten years, J has no desire to stay at home. He’ll continue working part-time to use his brain power.

It’s now about personal brand image vs. company loyalty. It’s what we offer the company vs. what they offer us. With the significant economic impact of the Great Recession and many companies downsizing, we need to focus on “my brand” and think of it first. With current technology, you can find out about people instantaneously. There are serious ramifications to your self-image, and you need to mange that image.

You need to stay loyal to yourself, not your company, and have an ongoing and continuous job search. Watch the signals for job changing needs and planned staff reductions. It can happen to you at any time. Define yourself, your personal skill set, and work for yourself vs. the institution.

Continue to redefine yourself. We all need to work until 80 now, not 65. Can we afford to dream? Dreams we had at the start of our career have disappeared.

How will the Great Recession impact the future of the American Dream?

Many decisions are being made based on greed. The human condition has not changed but working has changed and greed has increased. Layoffs happen so that shareholders can keep their cut. Greed is king.

Expect an unsettling time. It’s all about reinventing yourself, going through high points and low points in your career. You have to learn to lean on other people, network and make new and different friends. Go out of your way to network and establish relationships. You can no longer focus your efforts in one industry, doors are not being opened and you need to expand your relationships and perspective.

Retirement was our parent’s dream. It is no longer a reality for us or future generations. Working part-time has become the retirement dream. It’s now a “pace yourself” and “work until you drop” environment. 

How are different generations reacting and responding the Great Recession?

Not by shopping. Frivolous buying is over. Being cautious when you shop and get the best bargain is the key. Avoid the temptation to spend money. Go to the library rather than buy books. Retrain children to a different style of living.

Everything is cyclical. The next generation is learning how to do more with less. Doing your hair or nails is being delayed. People wait longer to spend money. Spending on services is declining so all are suffering.

Economic recovery is short-term. Younger generations are changing. Our parents were raised with a post-Great Depression mindset. Our generation lived with significant disposable income. Now, our children have no jobs. They struggle financially and move back home after college. They have different needs and don’t want to work as hard as we did. The Baby Boomer generation is the most productive generations from a “work hard” perspective yet we’re victims of age discrimination. 

What’s happening to the American Dream?

“I don’t have an American Dream anymore. This is survival. I hope to wake up and this nightmare is over. It’s difficult to find basic balance anymore, let alone figure out what to go after—be a consultant or look for a job.”

The future is about innovation. It’s not about how hard you work. There is a culture change with education. America is not maximizing education.

Families are going to be living together again. More people will be walking due to the price of gas; mom & pop stores will come back. There’s no room for bulk goods. Buying bulk makes you spend more in the moment when you have limited cash flow. The younger generations want to live in the cities than in suburbia.

People think you have a disease when you aren’t working. Those who were not impacted by downsizing due to the Great Recession are too involved with working to help others. They don’t really get it since they haven’t experienced a layoff themselves.

“I’m never going to put a job first again. In the past, my family and relationships suffered from being focused on my job and career. Now, I won’t let that happen again.”