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America entered a “new normal” in 2020 — and it could have dire consequences on your portfolio. 


Record-breaking inflation, skyrocketing wage growth, and massive unemployment create the perfect storm for delaying your retirement. Or if you’re already retired and on a fixed income, forcing you to get another job instead of enjoying your golden years. 

In this episode, you’ll discover the best ways to protect your portfolio and retire sooner than anyone you know despite our economic realities. 

Listen to the episode now and protect your golden years. 

Show Highlights Include:

  • How the “Great Resignation” happening in America impacts your retirement portfolio and timeline (4:23) 
  • The “normal on a hiatus” phenomenon taking America by storm (and why it can be catastrophic for your portfolio) (6:11) 
  • How technology’s accelerating the potential economic disaster (and how to protect your portfolio and retire on time) (9:44) 
  • The weird way businesses act like humans (and how to use this to retire sooner than anyone you know) (10:36) 
  • 3 reasons why inflation will stay high — and why we won’t have “runaway inflation” with even higher prices (11:55) 
  • Why holding cash and taking your pension in retirement is a surefire way to beg for another job soon (12:16) 

To schedule your complimentary retirement track review, head to https://onecapitalmanagement.com. You can also call us at 805-410-5454 or text the word ‘TRACK’ and we’ll reach out to you.

Read Full Transcript

Welcome to Make Your Money Matter, the show that aims to change the way we think about financial advice so you can make better financial decisions. Brad Barrett is a managing director and partner at One Capital Management, a wealth management firm serving nearly 1,500 clients nationwide, with over $2.5 billion in assets. They are a group of advisors dedicated to ensuring their clients achieve their investment and retirement goals. And now, here's your host, Brad Barrett.

Welcome to Make Your Money Matter, the show dedicated to helping you create a better relationship with your money. I'm your host, Brad Barrett. And it's my goal to help distill the best ideas when it comes to your finances so you can make more confident money moves. Here at One Capital Management, our mission is simple, to help our clients and you listeners take control of your finances and build the life you deserve. And before we get started on this week's episode, to find out more about me or my team here at One Capital Management, you can go to our website at onecapitalmanagement.com or give us a call (805) 409-8150. And if you are on the website at onecapitalmanagement.com, you can click on the media tab and there you can download and subscribe the Make Your Money Matter podcast. You can also download the podcast on any other platform that you would otherwise download a podcast, whether that's the apple app on your phone, Google podcast or Spotify, and leave us a comment. Let us know how we're doing, it's always good to get feedback. And as I say each and every week, if you like the show share with someone you like, and if you don't like the show, I guess, share with someone you don't like. Because this week's episode, we're gonna actually pick up on a little bit that we talked about last week.

And if you listened last week, you and me talk a lot about unemployment numbers and how that related to inflation and why that's so important. And I wanted to pick up on that because we had a few inquiries around that, finding it very interesting and fascinating. And so, I figured this week, I, I wrote some more around this and actually is something we're sending out to each of our clients at One Capital Management called our folio and we're gonna send that out. And we talked a little bit about this a little bit more. And by the way, if you haven't listened to last week's episode, you can go to our website again, click on the media tab and download it. Or you can go to Spotify and download it there. Now let me go back a little bit. In January of 1979, a song you might remember by a country singer named Johnny Paycheck. I love that last name, struck a chord with listeners and gave us a phrase that I think has stayed with us all. And it stays with us to this day. The tune expressed the frustrations and desires of a long-time factor worker toiling away for really little reward.

And I quote from the song, “One of these days, I'm gonna blow my top and that sucker his boss, he's gonna pay. Lord, I can't wait to see their faces when I get the nerve to say, take this job and shove it.” Now, it's not surprising. The song hit. Number one on the charts in the us, anyone who's worked in a toxic environment had an ogre of a boss or simply felt overworked and underappreciated has likely had the epic quitting fantasy that this song portrays. A dramatic and public address citing all that's wrong with the workplace, perhaps laced with some profanity, a stunned boss who suddenly realizes how difficult things will be without you and a show stopping exit like a mic drop. Maybe all while having a waving a well-chosen finger maybe. That leaves a ex colleague's mouth kind of wide open like, oh my gosh, did he just do that? This epic quit that we all have fantasized before, if we've been in those toxic work environments, for the most part has been reserved for movies like Wolf of Wallstreet or Office Space or Bridget Jones's Diary or Jerry McGuire. Although he to technically was let go, remember, show me the money.

Now, after all employees, don't normally have the leverage to take control and possibly burn these bridges as they do. But as the pandemic has shown us and why I'm talking about this on today's show, what the pandemic has showed us in spades is that normal is on a hiatus. For months scads of epic quits have actually gone viral. Many of you probably seen this, they've gone viral on Twitter and Facebook and Reddit. And while those stories and text exchanges with bosses’ garner, you know, most of the attention uneven bigger, no of folks are joining the what we're calling nowadays this “great resignation” with really less fanfare than those that have gone viral. In November as I spoke about last week, a couple months ago, more than four and a half million people up 300,000, by the way, from the previous month of October voluntarily, I wanna reemphasize that, voluntarily left their jobs. That's 3% of all workers employed in the United States and the largest monthly Exodus on record. Why?

You're probably thinking Brad, why you bringing this up? Well, look, lots of answers have been banded the fact that they're are between 10 and 12 million job openings in the U.S is certainly a big contributor with employers, really in desperate need of workers, leverage shifts and opportunities are pretty much everywhere. This has led to wage increases averaging 5.8% last year. Now real quickly, leisure and hospitality, those sectors have averaged 15.8% in wage increases, and really many employers offering better benefits and bonuses, both for new hires and those who stay with the company. Now, right there, wage increases has a lot to do with discussions we've been having with our clients, you've been reading, I'm sure around inflation and money supply, it matters. But there's a lot more to it and not all of it is easily quantified.

Surveys have actually shown COVID caused people of all ages and income bracket to essentially reassess their lives. Now, many of you listening right now might even feel the same way. Some have made personal transitions, professional transitions, or just thought about life in a different way. This, again, as I mentioned earlier from the pandemic has shown us that normal is really on a hiatus. First and foremost, I think baby boomers are interesting to look at. Millions of baby boomers decided to retire early, but millions of Gen Z workers, those in their teens and early twenties also left their jobs largely in the retail and hospitality areas. By the way, remember as that, those average 15.8%, almost three times wage increases as other sectors. On 60 minutes, a little while ago, The Chief Economist for LinkedIn, a lady named Karen Kimbro said and I quote “In some cases, people are quitting and not returning. They're taking a break.” She continued on and said, Americans are burnt out. I like to think of it as take job in shove it measure. It's just a sign-up people saying, you know, I don't need this.” I thought it was interesting coming from her on LinkedIn, which by the way, has largely been used for a job application, job promotion platform.

Now, while much of the focus of the we'll call it, the great resignation has been on white collar jobs, like the highly paid programmers who left Microsoft for other tech companies. It's actually the lower paying sectors where the biggest concentration of job quitting is occurring. When this trend began in the early to middle part of last year, 2021, many attributed it to generous government benefits, allowing these folks to simply sit home and collect checks. Now that theory has proven suspect at best. Although there was government money being handout, as we all know back to Miss Kimbro, The Chief Economist of LinkedIn, she actually went on to say, “What we saw was that when these benefits were turned off, when workers were no longer getting them, they didn't just rush back to work.” It was pretty interesting to see from someone who oversees a huge platform from an economist perspective around job growth and job creation.

One would think the great resignation would mean dire news for a country's economy. After all, for growth to occur as we all feel and know there needs to be an increase in the workforce and or worker productivity, something I spoke about last week. Which by the way, and I bring this up again because it begs the question with so many jobs unfilled, how is it that the us economy grew 5.6% last year in 2021?

Here's one answer. And this is what I wanted to get to today as looking into 2022, we talk about our planning with our clients, the investment portfolios that we're managing, here's one answer. Economic crises have for year accelerated one main area technology. And in particular automation, again, we spoke about this a lot last week and I wanted to continue this dialogue. In August Bloomberg noted that a 2012 paper published by the national bureau of economic research found that 88% of the ‘routine’ or easily automated jobs lost in the us since 1980s disappeared within 12 months of an economic slump, crazy. A pandemic and labor shortages certainly qualify as a crisis in my opinion, and in our opinion. And we're seeing that same acceleration take place menus, displaying QR codes, sell checkout at grocery stores, fast food KIOSK for example, we've gone and seen it all. I spoke about this last week, about the Starbucks example, they basically want you to order online and go through the drive through, or just do a curbside pickup.

These have gone from the rarities, as we saw prior to the pandemic to basically the normal. Businesses when forced into a corner actively make profound changes in order to survive. Sounds quite parallel to us as humans, right? When we're backed into a corner, when we're punching in the dark, we're fighting for our life in that example, we tend to make changes that we wouldn't have normally changed in normal circumstances. Why? Businesses are run by people. It's not hard to see, but it's interesting to take a look at and notice and put it all into context. It's become in a way, a bit like a game of chicken between employees and employers. The great resignation, if you will, along with the pandemic in general, will have lasting effects on the workforce landscape. Higher wages and better benefits, flexible work arrangements. This work from home scenario, more remote jobs, pre pandemic, roughly one in 67 jobs was remote quick stat. Now it's one in seven.

Pre pandemic one out of every 67 jobs was remote. And now it's one in seven. Now I don't know about you, but when I saw that stat, I knew that we had much more work from home scenarios happening, but I didn't think it was that dramatic, but the higher wages and better benefits, essentially being offered along with things like automation, like I was talking about will eventually tighten the job market. They'll also keep inflation higher than expected though, we don't feel it's gonna be runaway. And we'll talk about that a little bit more in the future episodes here, but it will keep inflation a little bit higher for a longer period of time. Those employer costs get passed on to consumers, you and me, all of which will put a squeeze on the jobless and those with fixed incomes.

So, for those on pensions right now, it's important that you run your plan and understand cost of living adjustments relative to your investments. This whole notion of conservative and not working with an advisor, just thinking conservative is cash, know this inflation and these wage increases by automation will cause inflation, not runaway, but for a longer period of time. So, we gotta settle in and manage the investment portfolios relative to your planning. Again, if you're on a pension or fixed income, it will affect you more. Now, likely not in the early part of this year, but at some point, the great resignation is likely to evolve into the hiring hike, we're calling it. So, the great resignation, as I've been saying, like all the obstacles and anomalies essentially born of COVID are the last couple years has our attention.

One thing I wanna share on this show today is as clients listening right now as your investment manager and your wealth manager, this is on our attention. We're keeping a close eye on all the affected sectors, retail, hospitality, healthcare technology, et cetera, all of them for both the warning signs, but also the opportunities which always come with shapeshifting trends and events. This pandemic that we're technically still in, I guess, has brought about unprecedented changes. I think we all can see that, in really every facet of life, but it's also shown proven investment strategies continue to work. Something we're gonna continue here at One Capital Management for all of our clients. And for those not working with us or not working with an advisor, I wanna strongly urge each of you to find that council. Find that trusted advisor seek out for friends and colleagues who work with an advisor, get that referral because it matters, it does. We are in a time period where a lot of news is coming out. A lot of misinformation here and there as well and different sides of different coins, right? We need to put it into context as it relates to your specific planning, not your neighbors, not your colleagues, not your friends, yours.

Proprietarily built financial plans, what we call here at One Capital Management, our Black Book needs to be done for every person, looking at their jobs, looking at their personal life, putting together all of their hobbies, interests, goals, relationships, values along with their numerical information, their income, their debt, their outflow, their investments, all the questions that come around that when you combine those two and you look at something like I've been talking about today and last week around what we're as trends happening. That's what we're looking at as professional money manners and, and professional investment advisors. Seek that council, it matters. And as I shared last week, and as I shared this week, largely around wages and why this is such an interesting topic, when you look at other things like what we've basically heard only around inflation. We look under the hood. Inflation is there. As we said, we don't feel it's gonna be runaway, but we do see it being a little bit higher because of these higher wages.

It's a demand – push, demand - pull relationship around certain aspects of our economy that will keep prices higher. Technology is an interesting sector as I mentioned. We're keeping an eye on that as well as retail, hospitality, healthcare, all the other areas that are out there because having a diversified portfolio means you have an allocation towards these. And our job is to find the right companies in the right sectors and the right industries to drive the growth that's necessary for your specific planning. So, as we sit here in the latter part of January, heading into February, make that call, find that advisor. I promise you the value of an advisor wins out over the fees they get discussed for an advisor. Those need to be disclosed and talked about no doubt, but the value is there to avoid the potholes that you might step into. You didn't know we’re out there that has a lot to do more so to do with the items under the hood than what's being discussed from the media on just a couple words or one sentence bar at the bottom around the word inflation, there's more to it. So, it's interesting to look at it in context and a holistic view. And if you'd like our help, feel free to reach out to us, you can call us to (805) 409-8150. You can also go to our website at onecapitalmanagement.com.

I wanna thank you all for listening to Make Your Money Matter. Remember before acting on anything discussed today, speak with a financial advisor and near you. And if you're not sure where to turn, you'd like our help visit us at onecapitalmanagement.com or give us a call (805) 409-8150. And until next week, remember Make Your Money Matter.

The information in this podcast is educational and general in nature and does not take into consideration the listeners' personal circumstances. Therefore, it is not intended to be a substitute for specific individualized, financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.

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