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The King is Dead, Long Live…?

The King is Dead.  Long Live the King!

The classic lines were to be uttered by a Royal Chamberlain to announce the death of a monarch, followed by an oath of fealty to the new king.  These words stay with me as I consider what's occurring around me, and I've actually paraphrased them to my older children as we talk about financial issues and money.  The old model is dead, long live whatever it is that's coming, but I'll be damned if I know.

For the past several generations, our economic model has been predicated upon end-user consumption.  That's us, folks, as we spend unbelievable amounts on stuff and then in a few years, try to sell it at a garage sale to make some more to either cover the bills that should've been paid in the first place, or else buy a bit more stuff.  But with the wall of debt that's been built over the past 25 years - personal, corporate and public - there's simply no way that we can continue with this model, and all of the drama in Europe is ultimately about the realization that there simply aren't enough productive assets to support their Picasso's version of a Jenga tower. 

I'm not smart enough to foresee what's coming and frankly, don't believe anyone else who states that they do because much of the policy response is being made up on the fly.  But it's become very clear that this model of economic growth based upon consumerism is dying, and doing so quickly.  That's the message that I now try to hammer into the heads of my children as they grow into a very different economic environment.  The principal lessons?

• Learn to live on less and save your money.  There's presently a war on savers as rates are kept excruciatingly low, but rates swing on a pendulum and at some point, they'll be forced upwards again.  Those who will do well at that time will be those who have learned how to live within their means now and the psychic adjustment will be much less difficult.
• Understand what your priorities are.  Do you want a home of your own?  Then work towards that.  Do you want to educate the kids with little debt?  Then work towards that.  But remember that despite what the advertisers proclaim, you can't have it all.
• Figure out what really matters yourself and then actively share that with the kids.  Share with them that there are people who don't have such basics as a secure home and food, then share with them how important these things are in comparison to new cars or the latest electronic gear.  Frankly, when I pray with Youngest at night, I purposefully give thanks for food and four walls and a roof; he learns that if I'm thanking God for that, then it must be important.  If you're not a believer or don't pray, find another way to get the message across.
• Teach the kids about needs versus wants.  Talk with them about the concept of friendship and help them determine who really cares and matters.  Dad, isn't it cool that General Mills will donate a dime of each cereal box sold to our schools?  Well, Daughter, if they really cared about education, then they'd just go ahead and donate the money anyway, wouldn't they?  Why does a multinational corporation need my help to support education?  We're not so much a society anymore as a multi-dimensional marketing cohort.
• Learn to pay attention to the world around you.  Observe what your peers are doing and ask yourself, does this make sense?  It's a wildly difficult concept for most teens, but talking about it helps to lay the groundwork for the future and that's what this whole process of childrearing is about, preparing them for the future.  My own father would talk to me about things and in the moment, he sounded as if he were speaking Greek, but it then began to register and things made much more sense.  You are, in a sense, planting seeds.
• Make it a point to start telling your child no.

Economic models don't change immediately and certainly not quietly.  But if you can recognize things and at least begin to prepare the kids for the future, they'll be ahead of the pack when push comes to shove.

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