Take Responsibility For Your Retirement

If you’ve put off learning about investments and how to manage your money for retirement, it’s time to stop procrastinating and start learning. The reason? Many of the companies we think we can trust to handle our retirement plans, we can’t. You have to take responsibility for your retirement.

Take responsibility for your retirement

A case in point is the banking industry. During the financial crisis of 2008-09, The US Treasury invested more than $200 billion in 700 banks…

…including $25 billion each to the nation’s largest lenders, including Wells Fargo (WFC), JPMorgan Chase (JPM), Citi (C), and Bank of America (BAC). Citi and BofA received other aid as well.

This was done on the condition that these institutions would then loan the money to small businesses. Guess what. They didn’t.

Instead, according to Rebel Cole, a DePaul University economist:

Small business loans outstanding dropped 18 percent, from a peak of $659 billion in 2008 to $543 billion in 2011…. TARP banks cut their lending to small businesses by 21 percent in that period, compared to a 14 percent drop at other banks.

That’s right. Banks that did not receive bailout money loaned more to small businesses than banks that did.

It’s fairly common knowledge that banks received a huge bailout and that the money has been paid back, but the fact is, they didn’t do what they were supposed to do with the bailout money. Instead of loaning it, they improved their own capital position, thereby contributing to the bankruptcy of many small businesses that couldn’t get loans.

There are (at least) two lessons here:

  1. Invest in the stock of financial institutions because they will always take care of themselves first and many are “too big to fail.”
  2. Don’t trust someone else to manage your retirement finances because “they will always take care of themselves first.”

Cynical, I know. But realistic. The only way to be sure you have enough for your “golden years” is to take responsibility for your retirement.

Click here to read more about the bank bailout and how banks failed small businesses and Americans.

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