The current political climate, volatile and increasingly and bitterly partisan, is considered by investors to be the biggest obstacle to reaching their financial goals, according to a new survey conducted by Millionaire Corner.
Between the debt ceiling debate last August, the supercommittee’s failed attempt to reach agreement on a debt reduction plan, and Congress’ down-to-the-wire agreement to reauthorize the federal unemployment program for two months, last year was marked by protracted standoffs between the Obama administration and lawmakers. The repercussions were keenly felt here and abroad. Speaking in Berlin on Tuesday, Christine Lagarde, managing director of the International Monetary Fund, cited the U.S. “debt ceiling debacle” as a cooperating factor in the worsening global economy.
In testimony before Congress last October, Federal Reserve Chairman Ben Bernanke, had harsh words for Congress, whose inaction was cited by Standard and Poor’s as a contributing factor in its unprecedented decision to lower the country’s credit rating. “Unfortunately the brinksmanship of the summer, and the perception in the minds of some investors that the United States might actively consider defaulting on its debt, and moreover that this might be recurring periodically was a negative for the financial markets,” he said. “It’s no way to run a railroad, if I might say so.”
Seventy-one percent of respondents said they considered the political climate as the biggest obstacle to achieving their financial goals. More than 80 percent of retirees, business owners, senior corporate executives and seniors over the age of 60 share this attitude.
Educational costs are seen as the next biggest obstacle to achieving financial goals. A College Boardreport released last October found that in-state tuition and fees for public four-year institutions increased 8.3 percent in 2011, while out-of-state tuition and fees jumped 5.7 percent. Out-of-state tuition and fees increased 4.5 percent with the average total charges (tuition, fees, and room and board) weighing in at $38,589, up 4.4 percent).
Thirty-nine percent of respondents cited the rising costs of higher education as keeping them from realizing their financial goals. Not surprisingly, this is seen as a more serious concern among more than half of investors under 40, who may be wrestling with student loans or saving for their own children’s college education.
Job security was cited by 35 percent of investors overall, but again, this is seen as a bigger obstacle by those under 40 (46 percent), While the national unemployment rate dropped to 8.5 in December, it inched upward from 9.2 percent to 9.4 percent for people ages 25-34, according to the Bureau of Labor Statistics.
The under-40 age group is also most concerned about career opportunities (46.2 percent vs. 29 percent overall).