One of the greatest books written on the millionaire that I have read is called The Millionaire Next Door.  I read this book my junior year in college and took many of the principles to heart.  Live below your means, run your own business, work hard, and save.  With so many things changing in the economy and world, I find myself looking at that book and wondering has the game changed?

It used to be that, if you put money away each year  towards retirement, you could expect a 10 percent return over a 30-year period.  Is that possible today?  The leaders in finance are saying no.  They are now saying that we are looking at a 5 percent return over the long run. 

In the past, the goal of savings was to put a little aside each month and watch as it grow with compound interest.  This investment advice is quickly becoming something of  a good myth.   With interest rates below 1 percent, you can save all day long and your money just isn’t going to grow. Furthermore, as inflation continues to creep up, due to the growing American debt, our hard-earned dollars begin to hold a smaller and smaller value.  So with this change how do the poor and middle class find financial freedom from a desk job? 

Well I still return to my book The Millionaire Next Door and find truth?  While we may not be the generation that can save our way to financial freedom, we can be the generation of invention and small business.  The desk job and the company man/woman is a thing of the past.  No job can pay us enough to break out of its grip.  The salaries aren’t growing fast enough, the banks can’t grow our savings and, therefore, we get stuck. 

The only way out is to become the pioneer again.   We must begin to forge our own path in the world.  We must create our own niche markets and, most importantly, we must find something we love to do.  Generation X and Y need to accept that there isn’t going to be Social Security like they have promised us when our turn comes.  We are going to have to work for a long time.  Most importantly, we are on our own. 

Our parents’ generantion, to a large extend, were the children of World War II veterans.  Their parents were the ones that went through the Great Depression and watched their life savings disappear overnight.  Our parents’ grew up in a world where canned vegetables and money under the mattress was commonplace.  They grew up in a mostly one wage earner household. 

Yet, when they came to age, women’s lib had guaranteed women jobs in America’s workplace and they began to bring home larger household salaries overnight.  Credit cards became commonplace and the middle class began to expand quickly.  When we came along, the world had changed from savers and penny pinchers to spenders.  Leveraging became a common investment strategy for the middle class.  Loans were easy to get and college was opened to everyone regardless of race, gender, and socioeconomic group.  

The world changed then and now it has changed again. 

We are paying for their high life now.  Loans are harder to get, credit card debt has mounted, and our country spent last summer fighting off a debt downgrade and a Treasury default.   Our generation is going to have to look back towards our great-great-great grandparents who founded and pioneered this country.  We will have to find new ways to invent, to grow, and to expand. 

Those who have an open mind and are willing to buck the system that has been put into place for us may find that they become the weathy in America in the next 15 years.  While those of us with college loans, car loans, and high credit card debt are stuck at a desk in a windowless building while they are still paying off that fancy college degree. 

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Anna Domzalski is a staff writer for the Financial Bin. Anna will soon begin her role as Dean of Financial Bin University and will conduct online budgeting classes beginning in February 2012. She can be reached via email at Anna@FinancialBin.com.

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