How to Climb the Corporate Ladder

It’s good to be the boss. People in charge of an organization not only make more money, but they also have happier family lives, are more satisfied with their work, and worry less about their financial futures, according to a 2014 Pew Research report. Those in the top levels consider their employment a “career,” not just a job that pays the bills.

So what can you do to get a promotion to those top levels? There are a number of steps you can take to improve your chances of advancing your career, whether with your existing employer or a new one. Your long-term success depends on having as many options as possible and being prepared when an opportunity arises.

11 Ways to Advance in Your Career

Getting to the top of the corporate food chain becomes increasingly more difficult in the higher tiers of management. In many organizations, average performers in the lower ranks can expect some promotions by merely being competent and building tenure. Attaining more senior positions or advancing at a faster rate, however, requires the following strategies, at the very least.

Read more . . .

Is Social Security Going Broke? Possible Solutions

More than one-half of Millennials believe there will be no money in the Social Security system by the time they are ready to retire, according to a 2014 Pew Research report. “I don’t think anyone honestly expects to collect a single penny they pay into social security. I think everyone acknowledges that it’s going to go bankrupt or kaput,” says Doug Coupland, author of “Generation X.”
 
What went wrong? Will Social Security go bankrupt?

A Brief History of Social Security

In 1935, few of the program’s creators could have anticipated the condition of the Social Security program today. The country was in the midst of the Great Depression with a quarter of its labor force – 15 million workers – idle, and those with jobs struggled to make ends meet as their hourly wages dropped more than 50% from 1929 to 1935. Families lost their homes, unable to pay the mortgage or rent. Older workers bore the brunt of the job losses, and few had the means to be self-supporting. One despairing Chicago resident in 1934 claimed, “A man over 40 might as well go out and shoot himself.”
 
Hundreds of banks failed, erasing years of savings of many Americans in a half-decade. People lived in shanty towns (“Hoovervilles”) or slept outside under “Hoover blankets” (discarded newspapers). Breadlines emerged in cities and towns to feed the hungry. Thousands of young American men hopped passing trains, sneaking into open boxcars in a desperate attempt to find work.
 
Democrat Franklin D. Roosevelt (FDR), promising a New Deal, defeated former President Herbert Hoover in 1932 with more than 57% of the popular vote and 472 of 531 Electoral College votes. Three years later, FDR signed a bill that would “give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

Investing & Financial Advice for Millennials – 6 Principles to Build Wealth

Atlantic Magazine asserts that Millennials are the “best-educated generation in American history,” with more than a third holding a bachelor’s degree or higher. Nevertheless, they may become the first generation of Americans to be worse off than their parents, with lower incomes, more debt, and higher poverty rates.

To succeed, Millennials will need some major preparation, especially considering the world around them is changing constantly. This article will answer three questions that are critical to the success of every Millennial:

  1. Which obstacles will this generation face during their careers?
  2. Who can Millennials trust for financial advice?
  3. What are the most important, time-tested strategies for building wealth?

Millennials Face Mounting Challenges

The challenges facing young people born between 1976-1996 are unlike those faced by any previous generation. The workplace of this generation has drastically changed from the one encountered by their grandparents and parents:

Slower Economic Growth

For the working careers of most Millennials (2010-2060), economic growth measured by gross domestic product (GDP) will average 2.08% annually, according to projections by the Organization for Economic Co-operation and Development (OECD). This rate is less than half the rate of GDP growth of 6.86% experienced in the previous half-century (1960-2010) calculated from figures supplied by the Federal Reserve Bank of St. Louis.

Increased Skill Requirements

Physical work requiring little to no formal training is quickly disappearing as intelligent machines assume more of the tasks formerly done by humans. According to figures compiled by the Brookings Institute, the manufacturing sector’s share of GDP accounted for 12.1% of annual real GDP during the period 1960-2010, while its proportion of the workforce fell from approximately 25% to 8.8%.

Expanded Workplace Automation

Routine tasks are increasingly becoming mechanized. Some experts found that 47% of workers in America had jobs at high risk of automation. The jobs at risk include taxi and delivery drivers, receptionists, programmers, telemarketers, and accountants.

Reduced Employee Benefits

Defined contribution retirement plans have replaced defined benefit plans (pensions), while more employers are transferring health care costs to employees in the form of higher insurance premiums, co-pays, and limited coverages.

Extended Nontraditional Employment

Contract labor is replacing employees as companies seek to lower fixed costs and increase flexibility. One report estimates that more than 40% of the American workforce – 60 million workers – will be self-employed as freelancers, contractors, or temporary employees by 2020.

Escalated Income Inequality

The historical link between productivity and pay is disappearing, exacerbating the disparity between the “haves” and “have-nots.” In 1970, almost two-thirds of Americans were considered middle class, reflecting the link between productivity and pay between 1948 and 1973. Although productivity has continued to increase, about half of American families were considered “middle class” in 2014, according to the Pew Research Center. Rising income inequality is likely here to stay.

Fragile Social Programs

The survival of social safety nets, such as Social Security and Medicare is uncertain as Federal and local governments wrestle with unprecedented national debt levels. Simply put, neither Social Security nor Medicare is guaranteed for future beneficiaries without significant changes in the programs.
 
Eugene Steeple of the Urban Institute predicts that Millennials are likely to experience cuts in benefits for themselves and their children, higher taxes, and reduced government services. This is partially a consequence of financing much of America’s growth and increased standard of living during the last 50 years with borrowed funds. According to Pew Research, most American households are vulnerable to financial disaster:
 
1. Family Income Is Increasingly Volatile. More than 40% of families experience an income gain or drop of more than 25% every two years. While drops and gains have balanced out in recent years (about the same number increasing income as those losing income), only two-thirds of those families suffering a drop recover their previous income level within the next decade.
 
2. Emergency Savings Are Virtually Nonexistent. Most households (75%) lack sufficient emergency funds to replace their income for a 30-day period. The top quarter of households have savings to cover just 52 days of income. Liquidating their investments and retirement funds would increase this to an estimated 98 days of protection. In other words, three-quarters of American families could cover only four months of their income (without selling their homes) if a major economic shock occurred.
 
3. Almost Half of Families Spend More Than They Earn. As a consequence, they are unable to save and rely on borrowing to make ends meet. One in 11 Americans now pays more than 40% of their income on interest and debt repayment.
 
In addition to an uncertain economic future, Millennials begin their working careers with greater student debt than any previous generation: $16,500 for a 1999 graduate, rising to $37,172 for a 2016 graduate. In other words, the average Millennial graduate is shackled to a $23,000 ball and chain (the average debt for graduates during the period) that will impact retirement savings, homeownership, and the age of marriage and parenthood.
 
Read more . . .

Understanding Tax Benefits of Real Estate Investment Properities

Renting versus buying can be a difficult choice. Still, according to The Wall Street Journal, almost two-thirds of American households own homes. Many more own rental properties or second vacation homes. By contrast, a Gallup Poll found that only one-half of Americans own stocks.
 
Home equity is the foundation of personal wealth in the United States, representing about two-thirds of net worth for most American households, per Bloomberg. The expansion of home ownership has been stimulated by government programs and tax advantages to incentivize the purchase of houses. According to a study in Social Forces, home ownership leads to “a stronger economy, better schools, and an invested, proactive citizenry.” Homeowners have higher voting rates and are more involved in civic organizations.
 
Owning real estate has some unique financial advantages. For example, homeowners can deduct their mortgage interest, mortgage insurance premiums, and property taxes from ordinary income. Also, proceeds from the sale of a house are treated as capital gains for taxes – up to $250,000 of the gain can be excluded from income for a single taxpayer or $500,000 for a couple filing a joint return.
 
Owning a home or investment real estate offers huge advantages to both society and you individually. Here’s how to get the most out of your investment.

Real Estate as an Investment

Owning an investment property is significantly different than owning the property in which one lives. While investors share many common risks – illiquidity, lack of transparency, political and economic uncertainty – each investment property is unique, varying by use, location, improvement, and permanence. Each investment can be subject to a bewildering collection of tax rules, all of which affect the net return on investment.
Andy Heller, co-author of “Buy Even Lower: The Regular People’s Guide to Real Estate Riches,” notes that most people pay too much for their properties: “The profit is locked in immediately once the investor buys the property. Due to mistakes in analysis, the investor pays too much and then is surprised when he doesn’t make any money.”
 
Heller advises that success in real estate investing requires:
 
Read more . . .