By Bambo Bamgbose, Executive Vice President & Chief Financial Officer for e-Management
I’ve got some questions for you…
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When was the last time you lived in any one place for 30 years?
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Who is the last person you know who lived in the same house for 30 years?
If you can answer either of those questions affirmatively, you are most likely a Baby Boomer or older…or are talking about someone who is a baby boomer or older. The new reality is that few, if any of us, born within the past 40 years (which is not that long ago . . . think 1969), can identify with the so called “American Dream.” This dream celebrated the notion that one could gradually take ownership of a home over a 30-year period.
For Baby Boomers, it wasn’t a hard concept to grasp. After all, this was the generation that left college to work at a company with the expectation that they would retire there 40 years later. It was a generation that expected the company to continue paying for their health care after they retired. This generation worked with the anticipation of a generous pension for retirement.
Pop quiz!
Do any of these ideas exist in today’s business world? Think about it. Employment with a company today is not considered a life or career long expectation. This hasn’t been the case for the last 25 years. Good employer-based health care is not even necessarily a given for people currently working at some companies, let alone ex-employees. And the word “pension” is dangerously close to being extinct from the business lexicon of the 21st century to be replaced by “401(k).”
So it hardly seems logical that in a world that has changed so dramatically, the original concept of the 30-year mortgage has remained largely singularly static. And for an economic landscape that has transformed dramatically, it is rapidly becoming obvious that a number of traditional mainstays will need to be re-examined.
So…what is the solution you may well wonder? In the words of the venerable Inspector Jacques Clouseau of the Pink Panther, “I have a plan . . . .”
Stay tuned for part duex (2) coming next Wednesday, April 1, 2009.