So aside of the social security bubble potentially bursting in the future, there's also a bigger underlying issue.
Purchasing power has only been getting worse from generation to generation, and thus being able to make any savings is already a distant dream for most. Younger people just keep working more for less, to s point now where mostworking people can't put even a single dollar aside.
Could there be a solution for these issues? Economists have long argued about the strengths and failures of our economic system, but alas it appears as though
"trickle down economics" has failed humanity.
So, do you agree that radical changes are needed?
No, I don't really think that we need a radical change at the moment. The world just recovered from the covid pandemics and inflation surge due to food and energy prices rising. A radical change to our economic system could make things worse instead of better. I would rather prefer a few years of calmness with some return to normality instead of another crisis. The thing with purchasing power is that inflation has been higher than the wage growth for a long period of time. The central banks are targeting 2% inflation per year, but in most jobs, we are not getting that 2% wage growth per year. Which means that we are losing real money every year. Which is why it's so important to invest money. Saving alone is not going to lead anywhere, the savings rate is usually below or at the same level as the inflation rate. So, in real terms we are not gaining anything. Only when we invest our money and aim for higher returns, we will be able to grow our money and make sure that the purchasing power of our money grows as well. It's all about making the first step and taking some money aside for investing, over time through profits and dividends our investments will grow and we build up our portfolio.