Becoming a corporate executive sounds like a smart move to almost anyone. Work a long career, become wealthy, not have to worry about savings for retirement. You had it all worked out. So did I.
But then I found myself in my late 40’s, still a corporate executive, with not a lot of job security and very little savings for retirement. I started wondering what happened. Why isn’t being a corporate executive like it used to be?
The Golden Age of the Corporate Environment
It used to be that real, massive wealth was only achievable by owning Real Estate or a private business. But then came the golden age of the corporate environment, where paper assets were all that mattered.
At large enterprises like Goldman Sachs, corporate executives could get rich. In technology companies that offered stock grants to employees, regular workers could become wildly wealthy. They had no knowledge or skills that set them apart from their classmates. Stock options were all they needed to set up savings for retirement.
It soon became traditional wisdom: Get a solid education. Make a long-term commitment to a blue chip employer. Climb the career ladder and achieve financial success. Returns on Large-Cap Value averaged 20.6% in the 80’s. The S&P 500 Index returned 17.5%. In the 80’s, you could still even get pensions, setting you up for retirement in the process.
Then The Dream Became a Nightmare
Now you’re here, a corporate executive in your 40’s or 50’s and nothing’s like they said it would be. You’re definitely not a millionaire. You could quite possibly be in debt and have no savings for retirement. You have no idea how to achieve financial freedom.
So What Happened?
You can blame most of your troubles on technology. Thanks to the internet, businesses now work in a globally competitive marketplace. At the same time, college educated workers such as yourself are much easier to come by today. According to Pew Research, Millennials are on track to becoming the most educated generation in history, not to mention the largest. They also have $1 trillion in student debt, and are looking for jobs. These factors caused companies to be more proactive in restructuring their businesses.
What happened to the auto and steel workers has become a reality for corporate workers as well.
And then there’s your beloved paper assets — key to financial success in the corporate world. The Great Financial crisis restructured all that. And now a nest egg isn’t worth nearly as much as it was mere years ago. Between 2000 and 2009, Large-Cap Value averaged 4.1% return. The S&P 500 Index averaged -.9%.
Savings for retirement has become a pipe dream, despite the fact that you work on the 100th floor.
So you bought into what seemed like a sound investment out of college. You started climbing the corporate ladder and it still hasn’t taken you where you want to go.
$5M is the new $1M for a Nest Egg with interest rates and expected returns today. Nobody I know will get there.
Losing your job is not the end of the world, if it happens. And despite the fact that you’re a late-career worker, there’s still time to salvage your savings for retirement. It just requires taking a step back from traditional wisdom and analyzing your current and future assets in today’s economic context.
I say cash flow is the new Nest Egg for retirees. Create durable cash flow and your retirement changes dramatically, and even by a few thousand dollars!
That’s what Retirement Rehab Blog is all about. Here I discuss how I’ve turned my own financial situation around in just a few years and recharged my savings for retirement. You can use the same strategies and others to do the same.
Read more on this blog to learn how to:
Lengthen your runway (for your corporate career)
Turn your current skill sets into profit
Buy or start your own business to build multiple streams of income
Make smart investments in stocks or real estate to grow wealth quickly
Approach the idea of relocation to improve savings for retirement
Ian Bond is a private banking senior executive with over three decades of experience in wealth and asset management with Goldman Sachs, Credit Suisse, and Citigroup. He has built major businesses on four continents.
Despite his professional responsibility for assets over $100B and revenues over $1B, after the 2008 crash Ian was personally going broke. Within five years he destroyed his debt, became an expat in 2014, and built multiple streams of income to fund his imminent retirement. Ian is also the founder of MyRetirementRehab.me created to help other executives and professionals rehabilitate their finances and make a prosperous, enduring retirement a reality.