In 1975, Dr. Salvatore R. Maddi, a psychologist at the University of Chicago, and his team of researchers were granted the privilege to study employees at Illinois Bell Telephone (IBT) by Carl Horn, the company’s vice president at the time. Maddi’s intent was to research how individuals responded to high levels of stress, and IBT provided an ideal platform due to the U.S. Justice Department’s antitrust lawsuit against AT&T in 1974. The divestiture and deregulation were eventually mandated in January 1982, although IBT began its preparation 12 months earlier, slicing its 26,000-employee workforce nearly in half.
By that point, Maddi and his staff had built a database of background information on 430 employees over the previous six years, a list that included both sexes and ranged from supervisors and managers to executives. Despite incredible upheaval and personnel changes throughout the company in the following months and years, Maddi was allowed to continue his research until 1987. The results were both fascinating and groundbreaking in nature.
Criticize the French and Germans if you so choose, but at least give them credit for getting their vacation on. An Expedia study this month found that residents from France, Germany, Denmark and Spain received a median 30 days of vacation in 2014. U.S. workers, on the other hand, received just half that many. The comical aspect of the findings is that while the aforementioned European residents took advantage of all 30 vacation days, their U.S. counterparts only took 14 of their available 15 days. To help put those totals in context, a French worker will take a full year of vacation more than his U.S. counterpart over roughly 24 years of his career.
A troubling report from Moody’s Analytics this week details how the millennial generation – essentially young adults under the age of 35 – has a negative two percent savings rate. The age group saving the most is the 55-and-older crowd (13 percent), followed by the 45-to-54 group (six percent) and the 35-to-44 group (three percent).
These figures shine a light on the discrepancy between the stock market boasting all-time highs in recent years and the inability for the average American to save enough to even consider putting his or her money in the stock market. The Moody’s report notes that savings rate for the same age bracket in 2009 was 5.2 percent following the recession. It’s an interesting dynamic, as the date seems to suggest the savings rate declined as the financial market benchmarks improved over the last five years. Stagnant wages and unemployment have played a role, although as the Wall Street Journal points out, the math doesn’t add up when comparing the millennials with my Generation X. Millennials are earning nine percent less, when adjusted for inflation, than Gen Xers did in 1995, but yet their net wealth is down 42 percent.
Derivatives. Futures. Single premium immediate annuities. Common stock. Preferred stock. Government bonds. Corporate bonds. Commodities. REITs. Options. Swaps. Short sales. P/E ratios. Dividends. Net profit margin. Exchange rates.
Welcome to the world of financial jargon.
Investopedia.com’s dictionary includes 14,688 definitions, ranging from “abnormal earnings valuation model” to “zero coupon inflation swap.” The lingo is thick and daunting, oftentimes serving to dissuade average folk from entering the financial world with their hard-earned money. The brazen can quickly fall in neck deep, taking risks based on random blurbs in Forbes magazine, while the more cautious of us can feel so unprepared that financial advisors are the only option to navigate the complex terrain. It’s no wonder so many people dip their toes into the financial markets and get burned.
The IRS recently increased the 401(k) maximum contribution limit from $17,500 to $18,000 for 2015, and if you’re like most Americans, you likely scoffed at the notion that anyone is capable of contributing that amount of money to a retirement account. If you fall in that category, then you’ve got a point. Vanguard reports that only 12 percent of its 401(k) plan participants deferred all $17,500 in 2013. The median deferral rate was 6.0 percent, while the number of participants deferring more than 10 percent was 22 percent.
The national median household income is $53,891 as of June, and although it’s fair to assume a good portion making below that amount are not enrolled in a 401(k) plan, let’s use that figure for some hypotheticals. Let’s say Joe Worker makes the median household income and contributes the median amount to his 401(k). That means he’s putting away $3,233.46 or 18.5 percent of 2014’s maximum contribution. That $500 boost from 2014 to 2015 doesn’t seem that relevant in that context.
My first job out of college was working as a golf professional at a semi-private club in North Carolina. The course was open 365 days a year, although during the winter months, there was often a frost delay in the mornings. While it typically took the thermometer reaching 40 degrees with a bright sun in the sky to melt the frost on the greens and make the course playable, I was oftentimes tasked with brewing multiple pots of coffee for the morning crowd before the sun came up and before the temperature rose above 30 degrees.
This group of men – ranging from as few as six to as many as 12, depending on the day – would wait for me at the gates at 6:30am, even if they knew the frost would linger for another three hours. They were all retired, all in their late 60s or 70s, and weren’t about to let some cold weather disrupt their weekly routines. As you can imagine, I listened to countless tall tales and crude jokes during these mornings over a period of seven years. I soaked up a wealth of wisdom and knowledge that comes with living on this planet for the better part of a century; advice ranging from love and relationships to politics and religion.