Retirement by Inheritance: In Death, Be Not Proud?

As you may have noticed, the blogs we write for A. Alliance Collection Agency can be eclectic and diverse.  We do try and keep on subject, particularly as it may relate directly to the practice of professional debt collection.  Yet we do diverge on many occasions, if for no other reason than there are many elements that go into the financial health of consumers and businesses.   Keeping our clients and friends apprised of trends in credit, spending, investing and savings may help anticipate unexpected economic shifts that can significantly impact credit policy or otherwise negatively impact accounts receivable.

We have written about consumer debt levels continuing to be at historic highs.  Fortunately, low unemployment and wage growth is allowing consumers to pay for their debts and, in general, bad debt is low.

That said, we have also written about the pitiful state of savings by consumers (many reporting that they have nothing in savings at all, and many more reporting that if they do it is not enough to cover even one month of expenses).  On top of that, we have reported that the number one regret consumers have when they get along into that ‘certain age’ is that they have not saved enough for retirement.  This implies, of course, that they expect Social Security to fully cover them in retirement, which is likely just wishful thinking.

Coming upon a recent Merrill Edge® Report (Spring 2018; read it here) written by Aron Levine we encountered an interesting subject.  If they are not saving, how do consumers expect to fill in the gaps when they retire?  Well it turns out, according to their research, “…one-third of Americans now say their financial stability depends on receiving an inheritance.”

Really.

Levine writes that they have been tracking savings trends for millennials, for example, for quite some time and have seen them “…pave their own path to financial freedom, often changing the way they approach traditional life milestones.”  Yet in this report he points out that “Now, across all generations, we’re seeing a heavy reliance on others to achieve financial success.”

Why is that?

“Perhaps shifting priorities and longer lifespans have Americans looking to others for security” writes Levine.

That would make sense.  There certainly is a large pool of wealth that is being slowly transferred to younger generations by our elders.  However, anecdotally, in my own family, we have seen some of our parents age well into their 90’s.   While a good long life can be a blessing, it also comes with a price as age is not always accompanied by that wonderful ‘glow’ we so long for in our later years. Prudent financial planning does not always mean that we can take a legacy to the bank.  In fact, in many cases it is just the opposite as costs of long term care are very high and can drain any legacy pretty fast.

How does this expectation break down by age?  The report divides it thusly (percentage waiting on an inheritance):

  • Gen Z (Ages 18-22): 63%
  • Millennials (23-40): 32%
  • Gen X (41-53): 37%
  • Baby boomers (54-72): 20%

Two other interesting notes from Levin:

  • “Despite describing their approach to financial decision making as ‘do-it-myself’ (87 percent), Gen Z, today’s youngest generation, is more than twice as likely (63 percent) to depend on an inheritance.”
  • “Gen Zers aren’t just looking to mom and dad for money?they are also counting on their friends (17 percent, compared to 4 percent nationally), grandparents (17 percent, compared to 6 percent nationally) and extended family (14 percent, compared to 5 percent nationally).”

We should all be so fortunate to have relatives and friends that we expect to help us out in our later years.  Nonetheless banking on an inheritance seems to be an unsound plan to provide for a sustainable future.

Yet it is one more piece of the puzzle that is now taking shape that seems to show our future generations need to take reasoned action and take it now to ensure they have the resources they need to live their own long lives.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 12 years.

Follow the Leader: Can Good Leaders Be Good Followers?

A while back, Rick Brammer, President of United Credit Service, wrote a great blog on leadership. The study of leadership is close to his heart; first and foremost because he is a good leader. He recognizes that good leaders are also good learners.  They never stop growing and learning.

I thought it may be interesting to explore a slightly different perspective on leadership: what can good leaders learn from being good followers?

I realize that the concept of following instead of leading is hard for many of us to swallow.  Yet, having good followers is the fulcrum on which good leaders lever their skills.  The fact is, too, that we all can’t lead all the time. Inevitably we are followers of someone or something and our ability to competently and skillfully follow a leader is as critical to success as leading.

So, just as there are traits and characteristics that distinguish good leaders, are their traits and characteristics that distinguish good followers?

An article by Gwen Moran in Fast Company titled “5 Ways Being a Good Follower Makes You a Better Leader” discusses traits shared by good followers and which, reciprocally, make them better leaders in their own right.

Awareness: Being a ‘bull in the china shop’ does not a good follower make.  Being aware of our actions, and the impact they have on others around us, is a key attribute.  Quoting Barbara Kellerman (a leadership lecturer at Harvard University’s John F. Kennedy School of Government) Moran writes: “Being a follower teaches you how to be aware of the needs of other people as well as their potential to ‘make my life hell from one second to the next’…”  Good followers are aware of those things that improve relationships, make the people around them more effective and avoid roadblocks.

Diplomacy:  I have often heard it called the ability to get along in the sandbox.  Quoting Kellerman again: “Good followers learn how to get along with those who have differences while not ignoring those differences…because a leader or manager can’t afford to be oblivious to the attitudes of those around him or her…”  Being able to manage through potential minefields of strong opinions is critical to achieving goals.

Courage:  Any conception that portrays a good follower as docile, subservient, or ‘sheep-like’ is just plain wrong.  Good followers have the voice to speak up in dissent regardless of consequences if a leader or organization is heading in a bad direction.  Among the five qualities this may be the most challenging.  Moran quoting Kellerman again: “…[this] requires the guts and strength of conviction that are essential to good leadership…It means being engaged. It means paying attention. It means having the courage to speak up when something’s wrong and it means having the energy and activism to support a leader or manager who’s doing things wisely and well,” she says.

Collaboration:  Recognizing the power in the team.  Although leaders often stand to receive the most credit for success, being able to work as part of a team, and lever the collaborative talents of coworkers, is the real force behind success.  If a team cannot successfully collaborate, this may make or break the influence of the leader to successfully lead the initiative to conclusion.

Critical Thinking:  The ability to view a challenge from a variety of perspectives and intelligently incorporate useful criticism into a better solution.  Moran quoting Ronald E. Riggio, Ph.D., (associate dean of the faculty at the Kravis Leadership Institute at Claremont McKenna College in Claremont California): “In order to be a good follower, you need to be able to think for yourself.” Riggio says “Many of the same qualities that we admire in leaders—competence, motivation, intelligence—are the same qualities that we want in the very best followers.”

Isaac Newton once famously wrote: “If I have seen further, it is by standing on the shoulders of giants.”  Newton relied on the work and insights of Copernicus, Kepler, Brahe and Galileo, as Einstein needed Newton’s work to create his works of genius. And on to our present time.

To become successful leaders, we need to master the art of being successful followers.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 13 years.