Content-Type: text/html Market Perceptions - What will 2030 be like?
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Market Perceptions - What will 2030 be like?

Updated: 2013-03-23 14:36:34
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Not too far in the future, there will be fewer of us to hold up the U.S. economy. Originally, I perceived this as a very bad trend for career types. However, I now recognize that it may not be as bad as I initially perceived. It will certainly be worse unless we figure out a way to become more efficient through automation, which is certainly possible.

"When baby boomers were children in 1960, every 100 workers supported 262 people in total. After the baby boomers grew up and were in the workforce by 1995, the total support burden declined to 200 persons for every 100 workers. By 2030, when the boomers are age 65 and older, the support burden is expected to rise to 221 persons per 100 workers."

The above comment is from the National Academy of Social Insurance.

Consider that we are much better off than in 1960. That goes without saying. We have many more people working and are much more heavily automated through the rise of computers in the 70s and 80s. Looking toward 2030, it is hard to perceive how a 10% decrease in people efficiency will affect our workload. I suppose fields requiring heavy mental abilities, such as medical professions, will be harder-pressed. That means more expensive medical care and fewer doctors. The quality gap of medical care between wealthy and average persons will likely increase.

Will salaries rise? They certainly have not gone up much in the last 4 years. Does this mean we will all be working harder for less money?

According to our government's Social Security website, the median income has gone up less than 1.8% since 2008. The good news is historically things do not appear terrible. The median salary has risen by 86% since 1990.

Does that mean the median salary in 2030 will be $50,000? If so, does that mean $50,000 in the bank will buy as much labor as $25,000 does today? That does not sound very good for retirees. It sounds like savers and lenders are losing in America. No wonder everyone is addicted to credit. Our economy substantially rewards debtors.



A year where workers probably work harder.

A year where every dollar saved today is possibly worth about 50 cents, in terms of salaries.



There may be excellent opportunities in 2030, as there will be a shortage of workers historically. Furthermore, the shortage may actually increase salaries more substantially than in the past. Everyone will work harder, but we will probably be paid slightly more, even in terms of typical inflation. That is, if taxes do not rise to incredibly high levels to support the Social Security system or other government burdens. If that happens, beware the deferred taxes on your 401K.

The real question is whether the higher salaries will be substantial enough to offset 20 years of inflationary affect on retirement savings. Steps would need to be taken to ensure a comfortable retirement. Clearly, investing in property seems to be a good idea considering the loan today will probably be worth 1/2 or less by 2030. It is not really the property in which you are investing. It is the destruction of the loan.

The real key will be to not keep up with inflation but to beat it. Unfortunately, there really is no sure fire way to do this easily, but it can be done. However, I can tell you outright that, for most of us, working for a salary is not the way to do it.


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