Jun 29, 2009

Net Worth Falls by 1.3 trillion

---

By: Jim West

The Federal Reserve released a report on June 11 saying that American's personal wealth had fallen a startling 1.3 trillion, back to 2004 levels.  According to the report the biggest damage to wealth came from the sinking stock market, with value of American's stock holdings falling almost six per cent, on top of the already brutal declines of 2008.

Clearly this is an issue of concern, yet some out there react as if this may have been a financial set back that provides little opportunity for recovery.  Julia Anderson in her article of June 7, in the Columbian , talks about the "Misfortune of Boomers".  Julia forgets a couple of key points.  First the Boomers, those born between 1946 and 1964, an eighteen year period have been the most fortunate generation of any in the history of our country.

 From the years that most of them began to work and invest in the early 70's they have benefited from an almost unbroken three decades of steady appreciation in the real estate market and the stock market. Certainly those on the front edge of that eighteen year generation,  that began to reach their sixties about three years ago have probably suffered from  the most recent  direct assault on their wealth accumulation. But most of the Boomer generation is still between 45 and 55 years of age and have 10 to 20 or 25 years to accumulate their retiement  wealth.

Assuming we revise the foundation of our financial system, and that we change our savings rates, there is actually great opportunity to accumulate more than enough capital to have a comfortable retirement.  

Our premise has been that proper diversification in retirement planning should include some form of real estate, beyond your residence.  Own your commercial property if you are an entreprenuer or small business owner.  Purchase a small multifamily property and benefit from the continued growth and development in Clark County between now and 2029.