OUR NEW WEALTH STRATEGY
Empower parents to create early investment funds and unlock the advantages of compound interest, securing their children’s financial futures
To The Gouché Foundation Team, Partners, Parents, and Friends:
As a father of four beautiful children, I often think about their future. Like most parents, my dream is for them to grow up, start families of their own, and achieve financial independence to pursue their passions and joys in life. This sentiment is shared by 90% of parents, as revealed in a recent Pew Research study on top priorities for their children's future. However, this dream is now in jeopardy. A recent analysis by Wealth Care Financial indicates that by the time our children retire, they will need $3 million in retirement savings to live comfortably. With roughly 70 million next-generation Americans, this equates to an overwhelming $210 trillion needed for them to achieve financial independence.
Founder, Nick J. Gouché
05.14.2024
OUR CHILDREN'S GENERATION WILL NEED AN ESTIMATED $210 TRILLION TO ACHIEVE FINANCIAL INDEPENDENCE, AN UNPRECENDENTED ECONOMIC CHALLENGE FOR OUR NATION AND OUR CHILDREN.
According to a new study, only 1 in 10 Americans report they have achieved financial independence and live life on their own terms. This troubling statistic means that 90% of our children will not be able to achieve the American Dream. Our children face unprecedented challenges unlike any previous generation. For the first time in over a century, we are raising a generation of children who may be worse off than their parents, where everyone could become less well-off, secure, and financially independent. Over the past year, we have diligently searched to further understand the implications of this growing economic crisis and what we can do to address it for our children and grandchildren. This search required a comprehensive analysis of current trends exacerbating the issue and what our enterprise could do to raise awareness and provide solutions. Through this review, we have made several discoveries, including:
FINANCIAL IMPLICATIONS OF LIVING LONGER
As life expectancy rises, so do the financial implications for individuals and society. In 1984, the average American lived to 74 years, but by 2024, this number has increased to 79 years. Projections for 2064 suggest that the average life expectancy will reach 85 years. This trend, driven by advancements in modern living, technology, and medical breakthroughs, means that people will need to save more during thier working years to cover additional years of retirement expenses.
RISING FEDERAL DEBT FOR FUTURE GENERATIONS
The rapid accumulation of federal debt in the United States has significant financial implications for the current and future generations. It took America 220 years to accumulate $11 trillion in federal debt, but in the last four years alone, this figure has almost tripled, reaching over $30 trillion. This equates to a burden of approximately $410,959 per child under the age of 18 living in the United States. The implications of this mounting debt are profound and far-reaching.
THE IMPACT OF OUR FEDERAL DEBT ON THE FUTURE OF OUR CHILDREN
The Congressional Budget Office (CBO) projects that interest payments will total $870 billion in fiscal year 2024 and rise rapidly throughout the next decade—climbing from $951 billion in 2025 to $1.6 trillion in 2034. In total, net interest payments will amount to $12.4 trillion over the next decade. To manage and service the growing national debt, future generations may face higher taxes. This increased tax burden can reduce disposable income and limit our children’s ability to build personal wealth. Higher debt levels may necessitate cuts in government services and benefits, such as Medicare and Social Security, as more revenue is directed towards interest payments. High levels of debt can lead to inflationary pressures if the government resorts to printing money to finance its obligations. Inflation erodes the purchasing power of money, affecting savings and living standards. The debt burden can exacerbate wealth inequality, as those with fewer resources are disproportionately affected by higher taxes and reduced government services.
85% OF EMPLOYERS NO LONGER OFFER EMPLOYEE PENSIONS
BY 2034, SOCIAL SECURITY’S FUNDS ARE PROJECTED TO BE DEPLETED
OUR CHILDREN WILL HAVE TO FEND FOR THEMSELVES
With rising debt levels, increased life expectancy, higher costs of living, reduced entitlement benefits, and fewer employers offering pensions, our children will face less external financial support and will need to accumulate their own personal wealth. In 1984, the average American needed under $150,000 to achieve financial independence. By 2024, this amount has risen to approximately $750,000, and by 2064, it is projected to skyrocket to $3 million. These trends underscore the necessity for individuals to build more personal savings and wealth to secure financial independence. As parents, we must be proactive in our children's financial planning, saving more diligently, and investing wisely to navigate these economic pressures and help them achieve financial security, or we may end up bearing the financial burden ourselves.
PARENTS ARE AMERICA'S NEW SAFETY NET
With the rising cost of living, high inflation, flat income levels, and historically low savings rates, parents are increasingly becoming the new safety net for their children. Today, an estimated 50 million parents provide over $70 billion in financial assistance to their adult children. In fact, 58% of parents have sacrificed their own financial security for the sake of their adult children, a significant increase from 37% just a year earlier, according to Savings.com.
At this pace, over the next decade, American parents are projected to provide over $700 billion in financial assistance to their adult children, while simultaneously sacrificing their own financial security. Nearly half of American parents (47%) financially support their adult children, leading to unintended consequences. This trend is causing significant financial strain, with 58% of these parents compromising their own financial stability for their children's sake. As parents divert resources meant for their retirement and long-term well-being, they risk compromising their financial stability, potentially leading to increased dependence on social services and a reduced quality of life in their later years.
This pattern underscores the need for better financial planning and education for both parents and their adult children to ensure long-term financial health for all parties involved.
$700 BILLION
The expected financial cost parents will provide to their adult children over the next decade.
WE FIRMLY BELIEVE OUR CHILDREN DESERVE BETTER, AND AS PARENTS, PARTNERS, AND FRIENDS, WE CAN AND MUST DO BETTER.
Each generation owes it to those that came before us to ensure we leave future generations with greater opportunities than we had. When an issue is important enough, people are naturally equipped with resilience, determination, and optimism to unlock opportunities for their loved ones and make the world a better place. By launching a national public awareness campaign to highlight this formidable challenge, we believe we can help every parent ensure that the next generation of American children achieves financial independence. Here, I would like to walk through what we believe needs to change, how the Foundation can contribute, and why we must work together to continue to promote a future where wealth and prosperity are limitless.
Moving forward, we will leverage every aspect of our Foundation—including our resources, conferences, programs, and voice—to emphasize that the real solutions to securing their children's financial future won’t be found in politicians or policymakers, but in themselves. We will amplify our voice using our three-part strategy essential for conveying our message.
LET 'S ILLUSTRATE THE FINANCIAL IMPLICATIONS OF MISSED INVESTMENT OPPORTUNITIES FOR THE GRADUATING HIGH SCHOOL CLASS OF 2024.
In 2024, 3.9 million students will graduate from high school, with 2.5 million enrolling in a four-year college. The average college student today will turn 25 with zero dollars invested for their future but will start life with $35,000 in student loan debt. Instead of the 2024 high school graduating class eventually having over $3 trillion in accumulated personal wealth, they will begin life with over $83 billion in debt and minimal savings. However, the generational impact on our children’s future is far greater.
THIS UNDERSCORES THE URGENCY OF OUR MESSAGE: TO COMMUNICATE THE ECONOMIC CRISIS OUR CHILDREN'S GENERATION WILL FACE AND TO ENCOURAGE PARENTS TO THINK AHEAD AND START SAVING EARLY FOR THEIR CHILD'S FUTURE.
WHAT THE GOUCHÉ FOUNDATION CAN DO
To understand how our Foundation could contribute to solving the economic crisis awaiting our children, we looked at our history. Since our inception in 2017, TGF has always envisioned an America where wealth and prosperity are accessible to all who are willing to work for it. We believed a college degree was one of the best methods to help our children lift themselves up, gain a great education, and achieve financial independence. Over seven years, we awarded $120,000 in scholarship grants to recipients from marginalized communities. However, as we examined deeper into the implications of the growing financial crisis, we re-evaluated our purpose. We were amazed to discover that if the $120,000 we awarded in scholarship grants had been invested for the future of our recipients, it could potentially generate nearly $7 million for their future retirement savings. Recognizing that over 1.5 million non-profits offer scholarship grants to well-deserving students, and very few non-profits focus on the long-term financial future of our children, we decided it was time to redefine our purpose and establish a new vision.
BY 2034, THE GOUCHÉ FOUNDATION, HAS SET AN AMBITIOUS GOAL TO HELP PARENTS SET UP THEIR CHILDREN TO ACCUMULATE OVER $1 BILLION IN PERSONAL WEALTH BY INVESTING EARLY FOR THEIR CHILD’S LONG-TERM FINANCIAL FUTURE, AND UNLOCKING THE POWER OF COMPOUND INTEREST.
Our mission cannot be achieved alone, which is why we are launching a full-scale national campaign to bring this crucial issue to the forefront of every parent's mind in America, and we need your help. We believe we have a righteous wind at our backs. Though we stand on the precipice of a colossal, formidable issue, we possess the resilience and determination to meet the challenge head-on if we choose to confront it and overcome the obstacles before us. If you care about this issue as deeply as we do, feel the same urgency and passion for our children, and hold onto the hope that we can rise to the challenge for their sake, then I have no doubt we will prevail. Together, we can build a nation where individual wealth and prosperity are accessible to all who aspire to achieve it, not just a select few. We recognize that our strategy alone will not be sufficient to end this economic crisis. However, we believe that we must do what we can. We invite you to join us and are excited to partner with every parent, friend, policy maker, and institution that cares deeply about solving this issue. If you are eager to work together and transform our future, you can sign up here. If you want to invest in a child's early wealth investment fund, you can sign up here. And if you are interested in learning more and joining our campaign, sign up here. Thank you. We look forward to working together to ensure our children have a bright future where wealth and prosperity are accessible to all.
Your Friend & Servant Leader,
Nick J. Gouché
Founder & CEO, The Gouché Foundation