After putting some thought into the issue of Social Security reform (which is I daresay more than would be allowed by the 24-hour news cycle), I have come up with two observations which I feel are important and related.
First, people need to take a more positive and calm attitude toward managing their own financial futures. Opponents of change would have people believe that their money will be taken from some safe, quiet place and invested in lottery tickets, off-shore casinos, jai alai wagering in Miami, Russian mob ponzi schemes and cockfights. Actually, the investments that would be offered would be pretty boring and mostly safe (nothing is completely safe...read yesterday's post concerning risk). One of the ones that was mentioned was a government bond fund which is essentially putting your money in an investment that is backed by the full faith and credit of the U.S government. It is a bigger dollar equivalent of all of those savings bond that boring uncle gave you every birthday. Besides, isn't choice better than the lack of choice? When it comes to my money, I certainly think so.
That leads me to my second point. If such a plan was to be passed, there needs to be concomitant moves for investor education for all participants. For younger people, it would be easy to integrate this into school curriculum. For everyone else, there are a couple of options. One possibility is to have the financial industry and its several organizations and members offer subsidized (read: free) seminars to teach investors the basics of the market (these are huge corporations, it would be a community service and a huge write off...just to get 'em in the door). That is just one possibility. This would be essential if such a scheme were to work. I personally used to work in the financial services industry on the floor of a major exchange in Chicago, so I have a decent understanding of the markets. This is not so for many people who find it confusing, intimidating or even sinister. This should not be the case as the basics are simple to grasp and can even prove interesting. And who knows...people might actually like it. Maybe not, but who knows anyway?
Is this the best solution? Not by a long shot. I believe that everyone should be able to keep all of that money and make their own decisions for all of their investments. Far be it from the government to allow people to decide how their own money gets spent. Shouldn't seem far-off, but it seems to be...and the Republicans claim to be the party of smaller, less intrusive government. When was THAT ever true?
Well, I have to get going. Cockfight starts in twenty minutes.
"Check the Box Sunday"
4 weeks ago