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Affluenza puts people at risk

Many Americans have contracted a contagious, socially transmitted condition that ultimately leaves them overloaded with debt and anxious about their finances. They also experience the bloating and sluggishness that results from the dogged pursuit of acquiring more stuff in an effort to keep up with the Joneses. This painful condition, known as “affluenza”, is sweeping the nation.According to the Federal Reserve in May 2007, Americans had $2.4 trillion in debt with $894 million in credit card debt alone, up from $888 million in April of the same year. The increasing credit card debt carried by Americans is scary. If you couple that with a personal savings rate at -1.4 percent, it’s easy to see that affluenza is a pandemic – one that all Americans should be cautious of, lest they catch it, too.Many Americans dismiss the symptoms of affluenza because they are familiar with the statistics that say Americans will live longer than previous generations. Many people believe that because there is an approximate 45 percent chance they will live into their 90s, they have more time to save for a rainy day. But delaying saving and racking up debt leaves a person open to contracting a permanent case of affluenza.While you may indeed live longer, that doesn’t mean you’ll be able to work longer and make more money. Advances in medicine are a mixed blessing. The things that once killed us now often disable us. You can’t be a greeter at Wal-Mart or a handyman or a pizza delivery person or fill any other simple employee role if you can’t get out of bed and perform competently. So, there you’ll be, up the creek without a paddle, with insufficient money saved because you thought you still had so many good working years left. If you’re lucky, you’ll have adult children who’ll be in a position to care for you. If not, your options could be pretty dismal.Still, the news is not all doom and gloom. Here are five affluenza prevention tips.Take two of these and call me in the morningTwo seemingly simple steps can help people in the fight against affluenza: Decrease the amount of money you spend and increase the amount of money you save. Many consumers balk at the idea of spending less and claim that they already watch what they spend. But the truth is many people still do foolish or careless things. Before you know it, their money has gotten away from them. Cutting back on $5 morning coffee or taking a lunch to work a few times a week instead of eating out every day are small changes that can produce big savings, nearly $2,000 per year. The trick is to put that money in a 401(k) or growth mutual fund. Ideally, have it automatically deducted from your checking account. Known as “pay yourself first,” invest it and let it grow. Don’t just blow it on an iphone or another splurge.Fight the urge to live like the rich and famousFancy cars and big diamond rings may make people appear to be wealthy. But the reality is that most material things are simply that – material. They’re not likely to increase your personal net worth. I am not saying that people should refrain from buying luxury items within reason, but they should make sure that purchasing those items does not dig themForget about the Jones, they suffer from affluenzaWhen consumers try to keep up with the proverbial Joneses, they’re putting themselves at risk for affluenza. The Joneses are usually in debt up to their eyeballs. They are more interested in keeping up appearances than living responsibly within their means. As outsiders, we have no idea if they are leveraged to the hilt or how much they have saved for retirement – or saved period. We simply crave their material possessions. No wonder that 65 percent of Americans are living paycheck to paycheck. And some people take home some pretty big paychecks. The need to look good is a dangerous thing.Take an umbrella, in case it rains“Saving for a ‘rainy day’ was a common mantra of baby boomers’ parents. Without an adequate emergency fund and retirement plan, boomers and future generations may find themselves standing in the rain. I recommend that people have at least the equivalent of three to six month’s living expenses in a liquid account, and that they religiously contribute to all of the tax-advantaged retirement accounts they can. Over time, that money can grow and help them maintain a decent standard of living in what should be happy, golden years.Work with a personal trainer to get fiscally fitIt’s human nature to procrastinate, but smart people fight this urge. Most people do better with some sort of personal and professional support. Saving and investing for the future can seem overwhelming or too complex in today’s busy world. In addition, it’s hard to sort through the ‘noise’ and often-conflicting advice produced by commercials, ads, Internet sites, television, radio, magazines and newspapers, not to mention friends and family who may be ill-informed. A financial professional can help map out a strategy and support you in sticking to a personalized plan.Colorado Comprehensive Wealth Management719-886-3377Registered Investment Advisory RepresentativeSecurities America Advisors Inc.Member NASD, SIPCFor more information, visit www.donnellservices.comColorado Comprehensive Wealth Management and Securities America Advisors Inc. are independent companies

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