Here’s more for those concerned about costs in retirement: Baby Boomer Ben Stein is warning us that standards of living are set to take a huge dive not long from now. Here’s the health care example:
Look at it this way: Think of the most crowded freeway you’re on every day. Imagine what it’ll be like in 10 years. That’s what hospitals will be like—if they’re not that way right now.
Ben continues his grim prediction and provides some financial advice: invest in a total stock market index and switch to bonds before retirement. He even suggests annuities after the individual is sufficiently educated about fees.
There’s no doubt that the future is grim, but I think globalization will go a long way to soften the standard-of-living crash. We may not even notice it as we continue to communicate with the rest of the world, as long as we don’t close our eyes to options beyond home.
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I read that too. However, if things get too bad, there will be money to be had and businesses will adjust, build more, etc. I’m not as down on the future as he is.
Why would we not just build more hospitals? The same could have been said after WW2 “woe is us, what are we gonna do with all these new kids?” and yet the last 50 years were the best on record. There are something like a billion+ people in China making less than $3 a day. What happens when they can afford to buy more stuff?
Jeremy Siegel talks about all this stuff in “The Future for Investors.” He’s cautiously optimistic.
Ben Stein sounds like a cranky old man a lot of the time… “Back in my day, things were so much better”. Yes, personal service has definitely taken a turn for the worse, but the market should level it out if people seek out better service. That’s a big reason why Dell took off in the late 90’s (and then sucked for a few years). If United’s service is bad, switch to an airline that puts a premium on taking care of customers. I’ve had fantastic experiences with Continental and I’ve heard great things about JetBlue.
He is right about the standard of living stuff. We may be closer to a massive wave of poverty than we think.
So, won’t there be tons of opportunity for “road clearing crews”? People who make things easier for wealthy retiring folks wont be in that poverty wave, that’s for certain.
Standards of living?
If consumers actually write down what they spend on each month, and add it up over a year, they would be amazed on the money they are throwing away on non-necessities.
I wouldn’t have half the bankruptcy clients at my Chicago based bankruptcy law firm as I do if people set budgets for themselves. Do you really need to spend $30 a week buying that low-fat, latte with double whip cream and a shot of espresso every day on the way to work. Invest in a coffee pot and make a good ‘ol cup of joe like they did in the good old days!
“Why would we not just build more hospitals?”
Because hospitals aren’t enough. You also need doctors. They take a lot of money and time to train.
However, I find it hard to take anything Ben Stein says too seriously. He has a theocon agenda:
http://normdoering.blogspot.com/2008/02/ben-stein-crouching-theocon-hidden-nit.html
http://normdoering.blogspot.com/2008/03/ben-stein-admits-he-has-only-little-pea.html