Unfortunately, the reality is there is no magic solution for any of these areas. Numerous factors interplay to contribute to growth, adding up to be advantageous, disadvantageous or neutral.
When considering the best options for growing personal wealth for retirement, one of the biggest factors is planning. While a minority of individuals plan even 10 to 15 years ahead of retirement, studies show planning can make the difference in whether you have enough income in retirement. Those who plan ahead tend to have double or triple the wealth of those who do not.
The concerns of planning for your retirement income are particularly key for several reasons, not the least of which is that centenarians (the population over age 100) are the fastest-growing age group as we are living longer than ever. Additionally, it’s more expensive to retire than it used to be, making the amount of funds you can accumulate for a longer retirement more important than ever. You don’t have to stumble through these kinds of obstacles alone, though. If we can help you put together a retirement funding strategy – or review one you already have in place – please give us a call.
Beyond growth of our personal resources, Americans want to see strong industrial growth. This kind of growth has traditionally been motivated by innovations, spurred by competitors who tried to build on the success of their peers. In the 1990s and early 2000s as globalization peaked, proprietary information trickled through each industry by way of supply chains, as companies saw what others were doing and shared that information with the others they supplied.
However, company growth and productivity in recent decades has been negatively impacted by the trend of proprietary intellectual capital. Also known as “excludability,” the phenomenon is defined as the degree to which a company can prevent competitors from learning its secrets. In recent years, we’ve seen a dramatic increase in patents and other legal maneuvering that thwarts the free flow of ideas. Now, in many cases, sharing information protected as intellectual property is against the law. The net result? Less sharing and less industry growth, according to a study by the Organization for Economic Co-operation and Development.
To contrast the slow of industrial growth and productivity, we see sharing as a contributory theme in metropolitan growth. Larger cities (more than 300,000 people) in the U.S. have recovered faster from the economic downturn than smaller ones, according to a new report from the National League of Cities. The report cited an increase in new business start-ups, business expansions and a more robust retail sector as reasons for this organic growth. In other words, the more customers out and about sharing the wealth, the faster these places saw businesses, employment opportunities and general economic recovery signs grow.
Our obsession with growth prompted the Bureau of Economic Analysis to publish a new measurement for it in July. Called the “gross domestic output,” or GDO, the measurement averages gross domestic product (GDP) and gross domestic income (GDI). In theory, the GDP and GDI measure the same thing: the total value of the economy’s output. However, GDP tracks expenditures on final goods and services produced in the United States, whereas GDI tracks the income that those who produce those goods actually receive.
As you ponder national economic growth and how it may affect your personal planning for retirement, a recent report has revealed one of the best ways for a layperson to measure the growth of GDP. Because the transportation sector is the fourth-largest U.S. industry sector (behind housing, food and health care), the number of semitrailers on the road roughly correlates to the number of goods sold and shipped in the U.S. Basically, the more semitrailers you see, the better the GDP is doing. So perhaps the next time you find yourself frustrated at sharing the road with a big rig, perhaps it will help to think about it as sharing the road with national growth.