Financial Dynamics

By Richard Olivastro
Posted 7/24/07

A long time ago, poet Robert Browning wrote, “Grow old along with me, the best is yet to be.”

How times have changed.

More people are suffering now. The young, people in mid-career and seniors alike.

Unfortunately, people are suffering …

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Financial Dynamics


A long time ago, poet Robert Browning wrote, “Grow old along with me, the best is yet to be.”

How times have changed.

More people are suffering now. The young, people in mid-career and seniors alike.

Unfortunately, people are suffering financially and emotionally, due to a lack of consistent focus, planning, saving,and a pattern of behaviors, choices, decisions — the list goes on.

Growing numbers of Americans are deeper in debt than ever before. Credit, in its various forms, has activated in people a mindset that enables their have-it-now impatience. That, in turn, feeds an apparent insatiable addiction to a consumptive accumulation of personal wants, which are usually rationalized into needs. It isn’t take long before financial trouble knocks.

The financial dynamics of life are levying heavy tolls on almost every person and every family these days. And, increasingly, even one misstep can — and often does — lead to serious, even catastrophic, financial calamity.

As a result, there are more personal bankruptcies, more home foreclosures, more human depression and despair. It certainly is not what Browning meant by “the best is yet to be.” So, how has this come to be?

Fundamentally, the core reason for the financial stress, indeed distress, in almost every instance is an individual’s inability to adjust their lifestyle to their current personal income realities. That is true for singles and married individuals. It is true for young, middle age and older individuals. It is true for retired seniors, as well as those individuals just entering the work force, or in the prime of their earning years.

Overall, “43 percent of U.S. families spend more than they earn” reports the Federal Reserve. Thus, “on average, Americans spend $1.22 for every $1 earned.” And, it’s going up.

For everyone, in general, prices on products and services increase. Fees increase. Taxes, at all levels, increase. And, so on.

While this general upward increase negatively impacts even those individuals with good financial self-control, it exacerbates the situation for other individuals with little self-control, those with health problems, and America’s senior citizens.

For workers, when wages and salaries do increase, they do not increase for every working individual – personal earnings typically do not keep pace or outpace the aggregate increase of prices, fees, taxes, interest rates, etc.

In other words, what I call every individual’s ‘Personal CPI’ is typically much higher than the CPI (Consumer Price Index) reported by Washington bureaucrats. (I will address that further in a future column.) Those with little or no self-control continue to self-inflict an ‘inflationary effect’ on their Personal CPI, making the situation worse for themselves and, ultimately, their families.

For seniors, too many thought that Social Security would be enough for retirement so they didn’t plan ahead and didn’t save much, if anything, for their golden years. Now retired, those seniors in good health, often work because they have to supplement income to meet basic expenses or sustain lifestyle. But, those seniors not in good health — and therefore more likely to have higher expenses — can work little, if at all, to supplement retirement income.

Unable to cover household expenses, and any savings gone, seniors are especially ripe for the numerous credit offers (cards, home refinance, etc.) that fill mailboxes almost daily and keep telemarketers busy day and evening. Too proud to ask for help, calamity occurs. And, their children are surprised. In most instances, genuinely; in too many others — well, ‘blind’ comes to mind?

All of this burdens families — financially, emotionally, and more. Some children ‘step up,’ others don’t. Those children that can and do as well as those that cannot, yet find a way to help, likely understand and accept the responsibility (belief) that families — and not the government — are supposed to care for each other (I Timothy 5:8).

Those children that will not step up actively avoid responsibility and passively leave it to government, i.e. others. Ironically, these same grown adults often have had latent help from their parents over the years. But, now these same children willingly ‘orphan’ their parents.

During the last series of Financial Dynamics Information seminars in the Southeast (a senior citizens survival series held at Faulkner State Community College), participants shared their personal experiences as a result of a lack of financial focus over the years: debt situations — their own, their children and grandchildren — along with the stress and anxiety they carry with them every day. “Finances are never far from mind.” They worry not just for themselves but for their children and grandchildren.

“I fear my kids and their kids will never be able to have the life I have had,” said one man in Gulf Shores.

That’s a statement paraphrased more and more by others in every financial dynamics seminar.

More noteworthy, I believe, is the similar look on the faces of everyone else in the audience as they hear the statement, think about it and contemplate reality.

Reflecting now, I see their faces and wonder: Were they thinking “Grow old along with me; the best is yet to be”?