Is the promise of a secure future broken? Unraveling the myths of financial stability

Why the traditional path to financial stability no longer works and how to prepare for a different future

I can’t be the only one who was told that if I worked hard and got good grades I’d end up with a high-paying job, only to realise I was sold a broken promise of a secure future. The plan was to go get a job, then stay with the company for 40 years while they paid me a salary (with benefits) that increased every year, including a generous “final salary” in the form of a pension and other workplace perks.

For most of us, that story is a myth. It might have been true at one point, but times have changed. Over the past 50 years, pension systems, tax systems, and legal systems have drastically evolved, and we are now responsible for our own retirement savings. Some might argue that it’s a good thing the government has decided to give us a bit more space and independence, but it feels like we have been abandoned to fend for ourselves with no idea how. Meanwhile, schools continue to peddle the “get good grades and a high-paying job” narrative, when the truth is far different. Job-hopping is the norm, the gig economy continues to grow, what jobs remain are threatened by AI and robots, and the economy keeps on crashing. If you want benefits, a secure retirement, and stability, a job isn’t the answer for most people.

Even though I grew up in India, my parents were open-minded and easygoing. They had a major influence on who I became as a person, and my siblings and I were never told to become doctors, lawyers, or engineers. They taught me how to cook, clean, dress, behave, and (what I value the most) believe in myself. They also taught me about money. When I was 12 years old, I started earning pocket money. My mother offered me 50 rupees ($0.60) a week or 200 rupees ($2.40) a month. I distinctly remember working out that some months had five weeks, so if I chose weekly, then in those months I’d get 250 rupees ($3)—weekly, please! While my parents taught me the basics, they couldn’t go further than that, as they themselves were poor money managers. To this day, my parents believe they have been unlucky when it comes to investing, and that messaging has been difficult for me to overcome. It took me a few decades to discover luck has very little to do with investing.

Most parents are doing the best they can, but their limitations might actually be hurting their kids’ knowledge in the long run while also keeping them locked in that tension between a scarcity mindset and a consumeristic one. And it starts early. Think about taking kids to shopping malls—such a consumerist environment—or the influence from friends who have had many similar exposures. It also extends to “alternative” approaches to parenting and talking about money—even books like Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! mostly serve to stoke the desire to make millions. I remember reading the book 20 years ago, heavily subscribing to the Rich Dad mindset. What a deep rabbit hole that turned out to be for me.

So much has changed in the last hundred years, but the unhealthy dynamic of get rich quick schemes—from YouTubers telling you how to retire early to investing in crypto, AI, or the latest craze—is still going strong. But as Renee Christoff, the Head of Corporate Responsibility at T. Rowe Price, tells us, the real solution to scarcity is far less sexy than all that:

“Improved financial capability— especially early in life—can result in improved standards of living and more stable communities.” —Renee Christoff

Watch: The Mindset of a Champion | Carson Byblow — a 5th grade student.

As we navigate the complexities of the modern economy, it's crucial to acknowledge that the traditional promises of job security and a stable retirement are no longer guaranteed. Instead, we must equip ourselves and future generations with the knowledge and skills to manage finances independently. This means embracing financial literacy from an early age, questioning outdated narratives, and preparing for a future where flexibility and adaptability are key. By doing so, we can build more resilient communities and ensure a more stable financial future for everyone.

If you’ve got young kids, I highly recommend this book: How To Raise Entrepreneurial Kids: Raising confident, resourceful and resilient children who are ready to succeed in life Paperback – by Jodie Cook and Daniel Priestley.

It's never too late for us to change our financial mindset, but let's give our kids the head start they deserve by teaching them early.

With gratitude,
Arunjay.

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