For the young, retirement planning is almost always at the bottom of any list of priorities. In today's economy, most people are so focused on economic survival in the here and now that they have little energy left for that type of long-term preparation - much less the financial resources necessary for implementing those plans. To make matters worse, even those people who have been focused on preparing for their eventual exit from the workplace have often faced tremendous economic obstacles over the last several decades. 401k plans, company pensions, and other retirement vehicles can certainly help, but none of them can guarantee the type of financial stability most retirees need. If you find yourself concerned about your future and in search of some way to supplement your eventual retirement income, a digital currency like DNotes or Bitcoin may provide the answer you seek.
Read the full story below.
I think it was George Carlin who said it best on stage when he uttered the immortal words “Reality; wow! What a concept!” This was followed quickly by saying the seven forbidden words you can’t say on television. George always did have a flare for the abstract but; his point is well made in that many of the things we take for granted when we are young turn into unrealistic dreams as we get older.
Take, for instance, retirement. What have you been told and what do you believe? Depends on your age doesn’t it? Many of us approaching retirement age now went through our most productive year’s spending money without a care, if we had it to spend, believing our pension plan and/or 401K or other investment plans would be there to support us in more or less the style we were used to, in our “golden years”.
Those of us younger than fifty may have seen the handwriting on the wall and realized early on that there was no single investment plan or employer sponsored pension that would truly be able to support our lifestyle after we joined the ranks of the retired. If you were among this group, and had the self-discipline and financial ability to put your money in vehicles that provided higher returns, you may be better off but not necessarily. Remember the “Dot Com” crash? Remember your stocks going from supporting you to being on life support? So do I, I lost a fortune.
Consider these major financial events and think about how much you lost in each:
- The “Dot Com” crash: 2000 through 2002 The NASDAQ Composite lost 78% of its value as it fell from 5046.86 to 1114.11. (1)
- Housing Bubble and Credit Crisis (2007-2009) the credit crisis and accompanying recession caused unprecedented volatility in financial markets. Stocks fell 50% or more from their highs through March 2009. (2)
- The Asian Crisis: 1989 - Ongoing in Southeast Asia but primarily Japan. Percentage Lost From Peak to Bottom: 63.5% as of 2003. (3)
These major events and, many less significant but just as devastating events around the world have conspired to leave most of us without enough retirement income to live in comfort for more than a few years unless we significantly lower our standard of living.
Think about it, do you really want to give up most of the things you have worked for in the last 20 to 30 years? Will you outlive your retirement savings? The average worker retiring now with a standard 401k or other plan not including a pension will have about 6 to 8 years of income with moderate spending.
Six years! Do you plan to live only six years after you stop working? I know I plan to be here MUCH longer than that so, how about other sources of income?
If you have a 401K plan that you contribute enough money to over the years to amass $550,000 by retirement, and you are healthy and expect to live another 20 years, you can expect to get around $25,000 per year from your plan providing the plan stays solvent. Does that sound good to you? You need quite a high salary to be able to contribute enough to the plan to produce the income after retirement. Can you really live the lifestyle you would enjoy on $25,000 per year? (4)
Well, you could add a pension to that. Lets see, an average worker in an average job after busting your hump for 30 years, must be a pretty fair payout right? Try around $1000.00 a month. I don’t know about you but I can’t live the life I do now for 1K a month even if I add another $1000.00 monthly from a 401K.
The above scenarios assume that you have some sort of retirement plan. Truth is, most workers today do not. They are on their own to save for their “golden” years. Nice concept but it never seems to happen. There is always something to spend money on, some family emergency, a home, car, etc.
So, what do you? If you’re savvy with stocks, you could play the market yourself but still this is risky and it takes real money to buy stocks that can provide dividends which would give you recurring income as long as the stock doesn’t tank. You could use a broker to invest for you but whose best interest is at stake here, you or the broker? More money wasted. You could invest in municipal bonds which offer a steady return, albeit a small one, after maturity but again this takes real money to purchase them and the rate of return is small.
Enter “Crypto Currency” such as Bitcoin, Dnotes, etc. These “ready for the future” currencies spend like traditional money but are virtual. By that I mean there is no physical coin, certificate or other device that represents value, it is virtual, in a public database known as a “blockchain” that keeps a record of every transaction as well as all the “coins” you own, spend, or acquire.
So right about now your saying that’s crazy, you talk about risk but you’re recommending something that doesn’t exist! Think about that for a moment. Would you say the Internet doesn’t exist? Would you say computer programs don’t exist? In today’s markets, ALL money is represented in digital form at some point in the financial system. You don’t have physical dollars in the bank, you have a number on a ledger.
The major difference is that the bank can change that number at will or take whatever “fees” they want from your accounts without your knowledge or permission. Not so with digital currency. Only the holder of the private key can spend or deduct funds. Anyone can send them to you, only you can send to others. On the surface it’s that simple - you can send or receive money to or from anyone in the world almost instantly, with little or no cost.
But another feature of digital currency is to act as an asset with the ability to appreciate over time. Physical money tends to depreciate. It now takes approximately $30.00 USD to buy what $1.00 USD bought in 1776 when the US became a country. Granted, there are a lot of factors that go into that calculation but, you get the picture. Physical money is on average depreciating.
The first viable digital currency using blockchain technology was Bitcoin; it is still the leader today valued at about $365.00 USD per Bitcoin at the time this was written. But Bitcoin is not the only currency of interest. There are about 680 others known collectively as “ALT” Coins. Yes, 680 other “AltCoins” as they are referred to all with differing values and purpose. Most are experiments and lack any significant value or chance to appreciate yet a significant few will succeed, appreciate, and fall into regular use worldwide. One of these is DNotes (NOTE) which I will use for example here.
As of December 2015, you can buy approximately 10,000 DNotes for $100.00 USD. Making each DNote a little less than 1 cent each. This is the norm for most viable AltCoins. The key to using this type of currency for retirement account purposes is choosing the ones most likely to succeed and appreciate in value over the next few years. This means doing your research and thoroughly investigating the currency, the development team, and supporters, and market before buying. Sounds just like the other markets doesn’t it? Same idea, due diligence today will prevent a disaster tomorrow.
Let’s say you bought 10,000 Dnotes, for example, for 0.01 USD or about $100.00 USD today and they appreciate over the next 5 years to a value of $1.00 USD At that time your $100.00 investment will be worth $10,000 dollars. Of course, there is no guarantee which is why I cannot stress enough that you need to thoroughly investigate any potential investment before spending your money. This means ALL investments. You should never, ever spend money on an investment basis unless you know exactly what you’re getting into and can afford to lose it.
So, in conclusion, there are other ways to supplement your retirement income out there, you just need to carve out some time now to investigate and engage if you choose to do so before it’s too late. The future is coming quickly and It looks nothing like the past.
Disclaimer: The information given here is in no way to be considered investment advise. It is simply presenting alternative methods to strengthen your retirement portfolio. As with any monetary decision, due diligence must be completed.
Robert J Fehn Sr is the Director of CRISP for Retirement, visit the DNotesVault CRISP for Retirement page for more information of the DNotes retirement plan.