Getting the word out

[ecmcn]

I just rewatched "The Retirement Gamble" Frontline documentary and am riled up about how insane our retirement "system" is in the US. If you're on this forum you're probably doing a good job of navigating the complexities of investments, budgets, long-term planning, etc., but I think the fact that the majority of people aren't is an indicator of a very large and looming problem. Even if you're set for the rest of your life it doesn't do anybody any good to have legions of old people living in or close to poverty.

What's sad about all of this but also gives me hope for our future is the fact that the solution is very simple: Consume Less, Save More, Invest Wisely (not nearly as good a slogan as MMM's). If the knowledge on this site was packaged for the general population and disseminated widely how many billions of dollars could be diverted from Wall St and junk manufacturers to helping people enjoy life?

I've been thinking about what sort of organization could help with this. Sure, MMM and friends have loads of freely available information that anyone could benefit from, but I think the average person landing here would see us as a bunch of FIRE freaks (and I mean that with the utmost respect) and not fully comprehend how it pertains to them. I'm not talking about targeting someone who wants to retire at 35 and travel the world, I'm talking about people who are just fine working until 65 but are overwhelmed by debt, a consumer mentality, 401k complexities, poor parental examples, plain old bad luck, etc.

One idea is a government agency, like the Consumer Protection Agency, however I don't think that's the right vehicle because 1) the Wall St lobbyists would never allow it to happen,  2) a government agency can't really be a forceful advocate for systemic changes that I think should be part of the conversation, and 3) bleh, too boring to just write a letter to my congressman.

A non-profit (whether officially or not) seems like the right choice to me. It could provide information, offer personalized advice, go into schools to teach the basics, run public-information campaigns and lobby on behalf of normal people who don't want to work until they're 75 because they freaked out and sold their stocks after a crash. If it had a web site with a quasi-official look to it and rigorously maintained it's independence it might help spread the word to the segment of the population not reading about Roth conversion ladders on the Mad FIentist (although we'd eventually get them there!).

Anyone know if such a thing already exists or has been discussed before?

Eric

[matchewed]

The fact of the matter is that good sound financial advice isn't some esoteric secret. It is out there and quite simple, and unlike several simple things also quite easy. The government gives out information. Private organizations give out information. Non profit academia gives out information.

Information is not the problem. There is so much information on any damn thing we've ever experienced or researched. Dissemination of information also isn't as much of a problem given the current mediums of information exchange (internet primarily). What is a problem is culture. How do you reverse course and show people that individuals living off of non profit producing leverage isn't a sustainable activity for them? How do you show that buying anything you want != buying everything you want?

Prior to anything you've mentioned you change a culture by how you educate it. The start is teaching kids sound financial ideas. Keep this up for a few generations and there is no problem.

Also don't fall into the scare traps. There isn't a huge retirement crisis around the corner. We'll be okay. Some people more so than others but that is a different subject and not one that I feel is super critical.

[Cheddar Stacker]

The ironic thing here is the single best way to communicate this message is already broadcasting the opposite message.

How do you communicate quickly to 99% of America? Television.
What is corrupting America into a consumerist culture doomed to a near poverty retirement? Television.

Many people have heard the message and understand they should be saving. Doing it is the difficult thing.

[Alabaster]

We have given people information. That is all that can be done. They must make the choice themselves.

We could privatize SS essentially saying "hey, you have to put this money aside for retirement but you get to choose how to invest it" but that's as close as I'm willing to come toward forcing people to do anything. Maybe push for awareness curriculum in schools.

Another non profit advocacy group isn't a bad idea. Have fun and good luck with that.

Edit: I'm going to have fun watching this documentary, aren't I? It starts with some guy in a suit that looks like it costs 3x my entire closet talking about how insurmountable it seems to save 10-15% of his salary.

Hint: I could probably maintain my life style indefinitely without part time work (and I consider myself middle class too!) at the 500K that the first 'stretched' 61 year old who talked had.

[ecmcn]

So it sounds like targeted education (as opposed to just more information) is something that could be the mission of such a group. I like the idea of picking one piece and hammering on that.

Advocacy for structural changes is also appealing because the payoff could be larger, but that's a big battle. I'll have to do a cost/benefit analysis of the options :)

Eric

[matchewed]

I personally don't think structural changes are necessary. Obviously if you can FIRE @ 30 then the infrastructure is in place for people to retire.

[eyesonthehorizon]

I think grassroots is going to be the way to go on this one. Fierce independence is the only way to keep from being co-opted by big money. One caveat: there are some pretty stringent limitations in the US on what you can do in terms of financial advice as a matter of normal business and charge for without being potentially liable as an unlicensed financial advisor. If you touch on investment guidance AT ALL, be very careful, because someone out there will be happy to sue you for your good intentions. If all you're doing is family budget planning and shopping/ lifestyle strategies, and talking about why it's important to read up on the different tax-advantaged retirement accounts out there and talk to your tax pro this and talk to your financial pro that, though, you would probably be okay.

I really understand what you mean about wanting to reinterpret things in a softer light. Not everybody can handle the facepunch, but then, not everybody wants to retire in their thirties or even live on 30k/annum. Diversity in the message is important. (Conversely some people crave a kick in the pants; I came in here asking for a facepunch in my intro post because I am very aggressive in my goals, got gentled and congratulated, and felt very confused. I'm here the way a casual jogger might peruse a crossfit junkie forum for inspiration: why you no yell at me to shape up?)

I'm starting a private informal money/ home ec club among some friends because I'm just horrified at how many of them make as much or more than I do and yet never seem to have anything left over at the end of the month, and because they have started to ask how I live on what I do as I've become a little more vocal (and encouraging) when I hear those complaints. I feel like you can accomplish a lot if you just reach out to those people who want to hear you; if they see an example and ask questions, it's a good sign of receptivity.

[trailrated]

You can lead a horse to water but you can't make it drink.

I am sure the vast majority of people "know" they should live within their means, not go into debt, and invest wisely. Just like the vast majority of people "know" they should exercise and eat nutritious foods and stay away from too much fast food, etc. While these things are "common knowledge" it is not something that can or should be forced upon people.

At the end of the day, you reap what you sow and that is how it should be.

[slugline]

The information is everywhere and has been. MMM himself readily gives credit to plenty of already-published books in his blog posts. And the idea of forcing the idea on people is pretty undesireable, because we run into the paradox of forcing people to save in order to make them more free....

Here's an off-the-wall idea: labeling. You know how calorie counts are appearing on menus and scare warnings are printed on cigarettes? What if we made true-cost warning labels mandatory on consumer goods? Ex: "WARNING: Paying off this Large SUV on credit, fueling it, and insuring it will likely add 10 years to the average American's working career." (Actually I don't know the real time period, but you get the idea.)

[Cheddar Stacker]

[quote author=slugline link=topic=21986.msg370137#msg370137 dat
Here's an off-the-wall idea: labeling. You know how calorie counts are appearing on menus and scare warnings are printed on cigarettes? What if we made true-cost warning labels mandatory on consumer goods? Ex: "WARNING: Paying off this Large SUV on credit, fueling it, and insuring it will likely add 10 years to the average American's working career." (Actually I don't know the real time period, but you get the idea.)
[/quote]

Not a bad thought on the surface slugline.

However, people still smoke and eat themselves into cardiac arrest even with labeling.

[Alabaster]

Having watched the documentary, I can say there are a few good points. Namely, that a lot of the funds you have the option of buying in your 401K have high expense ratios and additional fees. I will be trolling through my plan, to try and become more familiar with various fees that I may have to pay when, for example, I start withdrawing post retirement.

I'd like very much if the 401K was a simple, tax advantaged account with some rules placed on it by the gov. if necessary where I could invest the money as I pleased. I'd have very low cost index funds in it as opposed to a rather diversified set of mutual funds.

My 401K play through the Principle doesn't offer any funds with expense ratios below 0.5% and those are the passively managed accounts. I know Vanguard could do better. BUT I do get wonderful tax advantages and a fairly hefty employer match to my contributions
(up to 4% of my income) so I imagine it still makes sense to put my money into the account.

[ecmcn]

slugline I've thought of the labeling thing as well. Imagine if before you select a fund in your 401k you're presented with a chart showing how the fees might affect the value over 20 years, compared to the program's fund with the lowest expense ratio and a baseline total market index. Yeah, people ignore labels all the time, but how many people did Frontline say had a 401k? 30-something million? If you got through to 10% of them you'd be improving the lives of millions of people, which is a pretty cool thought.

Educational outreach (e.g. going into high schools) could also have the potential to help a lot of people who otherwise might never think to seek out the info on their own. Often the key is to just let someone know something is possible and they do the rest.