Featured Advisor
I began my career as a financial advisor with the AYCO Corporation. I then served eleven years with a Big four public accounting firm where I provided counseling services to corporate executives and other high net worth individuals. I founded Trinity Financial Advisors, LLC in late 1999. I am a registered CERTIFIED FINANCIAL PLANNER™ PROFESSIONAL and a NAPFA® Registered Financial Advisor. I am also a member of the AICPA, FPA and IMCA.
MY PRACTICE...
In the past few weeks the Securities Exchange Commission (SEC) proposed regulations that would require money market funds that are meant for large institutional investors to be valued at a floating net asset value rather than at the traditional $1.00 value. What does that mean and why should you care?
Today when you view the value of your money market mutual fund, the value is generally denominated in a dollar value, similar to your savings account. Unlike your other mutual fund investments, which are denominated generally in shares, that are given a net asset value and then converted to a dollar value, money market funds are easy to understand.
So why does the SEC want to value the money market funds differently in the future? During the financial crisis, one money market fund fell before the $1 per share value and was forced to be "bailed out"...in reality it was merged into another company's large fund and investors remained whole. Compared to the larger financial issues caused by the banks and insurance companies during the financial crisis, the mutual fund challenges were minimal. The SEC, however, believes that institutional investors are more savvy to when the actual value of a fund is falling below $1 per share and are more likely to redeem funds before the public becomes aware of a problem. Therefore, for all "prime" money market funds, those funds that are primarily used by large financial institutions and investment managers, the value will be a floating net asset value similar to other mutual funds. Mutual funds intended for "retail" investors, however, will remain at a dollar value. A "retail" mutual fund will not allow trades by a single shareholder of more than $1 million per day.
While few average investors will make trades of larger than $1 million per day, these regulations may still impact you. Why? If you hold assets in a money market fund in your 401(k)plan, it is likely that a prime fund is being used by your plan provider. It's likely that your IRA account, or perhaps other funds invested on your behalf by a financial advisor, could be invested in a prime account. It's possible that if you intend to buy or sell a home, or conduct another large financial transaction, you may need to use a non-retail fund due to the limits. But generally funds that you have invested on your own into a money market mutual fund will still be at a $1 value per share.
While your own accounts may not be subject to the new rules, it is likely that the cost that will be incurred by the mutual funds to provide basically two different accounting methodologies will be passed onto you. You may not see that cost directly in your account, but the overall operating costs of the funds will increase thus bringing your minimal return on your money market fund even lower.
Money market funds represent a reasonable portion of the investable assets held by investors of various wealth levels. Forty-eight percent of households with $100,000 to $1,000,000 of net worth own money market funds, while mutual funds make up about 11 percent of their portfolios. Seventy percent of households with $1 to $5 million of net worth and eight percent of households with $5 to $10 million of net worth own money market funds, and 16 percent of the investable assets of both wealth segments are made up of mutual funds. 75 percent of the households with more than $25 million own money markets, while 11 percent of their investable assets portfolios are comprised of mutual funds.
While wealthier households are more likely to have assets invested in prime funds, most households own mutual funds in their 401(k) plans. The accounts you monitor on a regular basis may not outwardly be impacted by these changing rules, however, you may ultimately notice the difference. Some providers have already changed their money market funds into a floating net asset value. For those investors who view their money market account as a checking account that earns interest, a change in the net asset value on a daily basis would be quite disturbing. While this is an unlikely outcome, it could occur in the future if providers decide the cost of dual accounting is cost prohibitive.
The new regulations are currently in the comment period so it is unclear how the rules will fare under greater scrutiny from the industry.
Social Security holds a unique place in the sensitivities of most Americans and it is a topic that most people would never consider discussing it with a financial advisor. But being able to maximize your benefits is potentially more complicated than you might think. Recent research completed by Spectrem Group highlights the unique place that Social Security holds emotionally for investors, regardless of their level of wealth.
First, in countless focus groups and individual interviews with investors of various levels of wealth, it is clear that Social Security is an expectation. "I paid into it, so I should get it back" is the clear belief of almost everyone interviewed. Two thirds of the individuals interviewed in the quantitative research felt that there should be no cut-off for Social Security regardless of an individual's level of wealth. Of the 34 percent that supported a cut-off based upon income in retirement, 44 percent felt it should be $100,000 or more.
In the research, more than a third of investors said they planned on taking their Social Security benefits not at retirement age, but later, so they could maximize their benefits. But, for most, they had not discussed the issue with a financial advisor of any type.
I had the benefit of sitting through a presentation by a CFP in recent weeks who highlighted the many issues individuals should consider when contemplating when to begin taking their social security benefits. Who knew there were so many issues to think about? Most individuals merely go onto the Social Security website (52 percent) to determine how and when to make their decision. Of the individuals surveyed that were already on Social Security, 97 percent felt they were well informed although only a handful talked to a professional.
Twenty percent of investors do wish their financial advisors had discussed Social Security with them. The same is true of Medicare. For many, these issues are just as important as estate planning and an investment plan. Spectrem's research shows that as investors become wealthier, they are even more likely to want to discuss these issues with their advisor.
I encourage you to bring these issues up with your financial advisor. As part of your holistic retirement planning you need to make sure you understand how to benefit from both Social Security and Medicare. You need to understand tax implications and other issues regarding how it fits into your overall financial picture. Do you need supplemental insurance? And how does Obamacare change all of this?
Despite the relative ease of application, how Social Security does or will fit into your financial picture is slightly more complicated than you may think. Additionally, changes in health care laws and Medicare may also have an impact. Have a financial advisor or professional discuss these issues with you to ensure the best outcome.
My mom always told me I was special. That was back in the day when being special was a good thing. Turns out I’m in the minority of women who appear to be watching NCAA tourney play at work. (Don’t tell my boss. He has the games on, but probably doesn’t think they would be a distraction for “us girls.”)
Only 4 percent of women workers are streaming the basketball games on their computer at work, according to Millionaire Corner’s monthly survey for March, but I cannot get enough. What do I love about basketball? Everything. I agree with the august sports journalist Frank Deford when he calls basketball players the best all-around athletes in the world. The squeak of rubber-soled shoes on wood is music to my ears, and I buy into the squeaky-clean image of the sport, too. Sucker that I am, I even followed the legendary St. Anthony’s High School basketball team when I lived in down-trodden Jersey City, NJ.
As a retired amateur basketball player - think women’s league at the local Y – what I loved most about the sport was the trash talk. My talent was dwarfed by former college players, but that didn’t stop me from dissing them once I had picked myself up off the floor and caught my breath.
Trash talk brings me back full circle to the subject of the NCAA tourney. I am putting my bracket up against anyone’s. After three rounds (counting the play-ins) I am kicking the behinds of most of my admittedly more sports-savvy male acquaintances with a score of 89. Those with a bruised male ego may call it beginner’s luck – this is my first NCAA bracket ever – but I say successful people make their own luck. (Entrepreneurs agree with me and attribute their wealth largely to luck and being in the right place at the right time.)
Okay – so I never saw Wichita State, La Salle or Florida Gulf Coast coming – but I’m in there with Marquette, Miami and Oregon and see Indiana as going all the way just like the president.
Our research also shows that 8 percent of women – compared to 14 percent of men - are participating in a March madness betting pool at work. I’d love to see more research on who’s faring better. My money’s on the gals.
Who’s the least likely to celebrate (insert holiday here)? If you guessed the folks without means you’d be wrong. Rich people – in the tradition of Ebenezer Scrooge – appear adverse to a good time, at least what most of us would call good times. The frugal Millionaire may be happy staying home and tallying up the day’s market winnings.
How do I know this? Spectrem’s Millionaire Corner tracks the attitudes and behaviors of Millionaire investors through monthly surveys and has learned that the wealthy attribute their financial success to hard work, education, smart investing - and frugality. We’ve also asked the frugal Millionaire what’s happening for most major holidays and the answer is, not much.
The frugal Millionaire probably didn’t toast the New Year with a glass Dom Perignon, which starts at over $300 a bottle. Roughly 83 percent of Millionaires surveyed in December said they planned to spend less than $200 ringing in 2013 – and three-in-10 planned to go to bed early to start the New Year rested.
Millionaires were not any more inclined to flash green on St. Patrick’s Day. How were they planning to celebrate? Mostly, they weren’t. Only one-fourth had plans, and of these, two-thirds expected to spend less than $50, according to our February survey. On the other hand, the frugal Millionaire was not likely to end up in the next day’s police blotter. Their St. Paddy’s celebrations tended to take the form of wearing green (77 percent) or cooking a traditional corned beef dinner (36 percent).
The frugal Millionaire may seem stingy, but surely he or she has heart. Perhaps. Most wealthy Americans celebrate Valentine’s Day – and most commonly mark the holiday by buying a card (45 percent) or going out to dinner (40 percent), according to our January survey, but you can pretty much forget about a weekend get-away, jewelry or other gifts.
How about Halloween? Two-thirds will buy candy and probably spend less than $50 on it, but only 10 percent will dress up. Thanksgiving? Two-thirds of Millionaires were cooking their own dinner and 56 percent were spending from $50 up to $200 on the food. Christmas? Ten percent said they were cutting back on spending, due to less disposable income, the belief the economy is getting worse or that the holidays are too commercial - though 20 percent expected to spend more than $2,000 on gifts – and the majority were staying put for the winter holidays. As far as weddings go, nearly 90 percent of Millionaires surveyed last May say the celebrations have become too lavish.
Don’t envy the rich – particularly frugal Millionaires. They’re boring.
St. Patrick’s Day is nigh. Images of chubby black pots spilling over with gold coins are everywhere. As a financial writer I feel compelled to ask, “Just how much is that gold worth?”
Most of us grew up imagining that pot and how thrilling it would feel to travel to the end of the rainbow and find it. The myth varies with the teller, but I like thinking the fairies put the gold there and tricky leprechauns are carefully watching over it. They could be guarding it for their own amusement – tapping out shoes can get tedious – or to protect humans from the worst of greed.
But exactly how much would be in that pot? A lot? Enough to make me rich forever? We put the question to investors surveyed in February: “If you were to find a pot of gold at the end of the rainbow, how much would you expect to be in it?”
By far the largest share of respondents would expect the pot to contain $1 million in gold. A surprisingly modest answer, especially considering the relative affluence of the respondents. Even millionaires with up to $5 million to invest most commonly imagine the leprechauns sitting on a stash of $1 million.
The story is quaint, and so is the expectation. Financial planners warn us that $1 million isn’t what it used to be. The Department of Labor’s inflation calculator spells it out pretty starkly. In 1956 – in the midst of the baby boom years - $1 million was worth today’s equivalent of nearly $8.47 million. Fast forward to 1980 – the beginning of the Millennial generation – and $1 million was worth $2.8 million today.
Inflation may be eating away at that $1 million, but the Millionaire remains a powerful cultural icon. Obama’s tax plan is known as a “Millionaire tax.” The Internet is teeming with tips on becoming a millionaire by (insert age here), three easy steps to becoming a millionaire, secrets of the self-made millionaire. And ABC is still asking us “Who Wants to Be a Millionaire?”
The prevailing wisdom is that $1 million will likely leave you secure, but not rich in your golden years. A 4 percent withdrawal rate on that savings will yield $40,000 a year. The numbers are clear, yet $1 million remains a popular retirement benchmark.
The wealthiest – those with $5 million and more – have their sights set a little higher. The largest share – 26 percent – expect that pot of gold at the end of the rainbow to be worth $25 million, but the second largest share – 24 percent – are looking for a mere $1 million.
Science – which seem to be ruining so much good fun these days – tell us to put all these dreams aside. Aerial images show us that rainbows are circles, not arcs. No end to the rainbow. No pot of gold. (Or, we can choose to believe the leprechauns are much more clever than anyone could have imagined.)
I am not a cutting edge technology person. In fact, I tend to be a follower…not a late adapter, but somewhere in the middle. That is why when I came upon “Open Table” a few years ago, I was thrilled. As someone who travels a lot, the ability to find a good restaurant with comments and reviews wherever I went was awesome. I have the app downloaded onto all of my devices. I use it multiple times each week. At the same time I discovered Open Table, I was doing some minor renovations on my home and began using “Angie’s List”. Again, this is a great site that lists and rates home repair services. It serves a need and can be used by anyone (for a small fee).
I also become very adept at using various news services and their related apps on my mobile devices. At any time, whatever airport I was waiting at, I could check on CNN and Fox News and get their conflicting reports. I could also check out the Wall Street Journal and others. I really enjoyed (and still do) scrolling the key headlines and clicking on what I felt was interesting.
Out of these experiences came the idea for Millionaire Corner. Spectrem Group’s research has consistently indicated that investors find financial advisors through referrals from friends and family. At the same time, our research was hinting that investors would like to be able to go somewhere else in order to validate the recommendations of their friends or perhaps find someone even better! We researched that issue and, indeed, found that more than a third of investors were searching the Internet for more information about financial advisors.
Since Spectrem Group’s expertise is market research, why not create a customer satisfaction survey and post it on a website listing various advisors? We could create the “Open Table” for financial advisors. At the same time, we would be responsible for drawing investors to the site using our own research with investors. We have generally found that wealthy investors like to respond to our research because we give them a report out of the findings. This allows them to see what other investors like they are thinking and doing.
In February of 2011 we launched the investor side of MillionaireCorner.com. We hired talented writers and each day we populate the site with up to date information that is happening in the financial markets. As frequently as possible, we link the stories to the date and analysis we have available in our market research. We also populate the site with videos and “e-learnings” about specific topics. Our goal is to write for an average investor, not for someone with investment expertise. We want to be a step up from Suze Orman as far as the level of expertise our readers may have. Two years later, we now have about 70,000 unique visitors to the site each month and we continue to grow.
So what about the “Open Table” service for advisors? Because this is a compliance-based industry, we thought the best way to tackle the issue was to go directly to the SEC and ask for a private letter ruling. Why wouldn’t we be able to get it? People are already going to services like “Yelp” and posting comments about financial advisors. There is no screening or quality control over these services. We would be bringing our research expertise to this medium. We would post all ratings, both positive and negative so that an investor had a realistic view of the advisor.
We showed the SEC our “Find an Advisor” profile. We explained that we would be doing a custom video for each advisor and that we would let he or she describe his or her practice. At the same time we would be sending a customer satisfaction survey to the advisor’s clients. All of the surveys would be the same and ratings would be based upon the key components Spectrem’s research indicate are the primary satisfaction factors in an advisory relationship. Factors include knowledge, pro-activeness, understanding the client needs and similar issues. It does not include investment performance, because generally fees and investment performance are not the primary reasons an investor fires an advisor. Once the client information leaves the advisor, it is returned to Spectrem. An advisor has no ability to change the information.
As many of you may suspect, our biggest hurdle was what is known as the Dalbar No-Action ruling, dated March 24, 1998. In that No-Action Letter, the SEC determined that the rating given by Dalbar was a “testimonial” because the rating is an explicit statement of the client’s experiences with an advisor. An advisor cannot use “testimonials” in relationship to any advertising he or she may conduct in order to avoid violating the Investment Advisers Act.
We spent almost 12 months working with the SEC regarding various ways in which the surveys and the ratings could be conducted in order to provide investors the ability to see the ratings of advisors. We promised to review disclosure policies of the advisors. We agreed to take the video off of the site and just include a picture of the advisor. We agreed to take off any customer comments and just show the overall ratings in the categories. And, as you probably suspect, it took a long time to get responses regarding various issues.
In the end, the day before Thanksgiving, the SEC basically said “no”. In a cordial discussion with them they indicated they just couldn’t get past Dalbar, even though they acknowledge that it is from a different century. With investors becoming increasingly comfortable with new services and challenges, it is frustrating to all that these capabilities can’t be given to investors. Instead, they will rely on comments posted on “Yelp” to review their advisors.
At the same time, we hope to attract both investors and advisors to our revised “Find an Advisor” service. This service allows advisors to present themselves to investors via a video and an explanation of their services unlike any other. Investors can sort by expertise and geography. Then, before contacting an advisor, they can play the video and see what they think of the person. Our job is to help advisors develop a compelling video and an appealing description of their practice. We are also responsible for drawing investors to the site.
One of the features we retained with “Find an Advisor” is the customer satisfaction survey. While we cannot display the findings on the site, the advisor can review the findings and make changes to his or her practice as needed.
We plan to go “live” with our Find an Advisor service on March 1, 2013. It has taken us two years to get to this point, but we are really excited about the opportunity available. While investors won’t get to see the ratings, they will get to view multiple advisors in an interesting manner. At the same time, we will continue to draw investors to the site with new features including our Millionaire Corner Financial Literacy Institute and our “Compare Yourself to a Millionaire” feature, both of which are being launched in the next few weeks.
As for the SEC, they hinted that we should keep our eyes and ears open. Maybe they will soon move into the 21st century.
The folks at ABC news want us to buy more holiday gifts made in the USA. I’m here to tell you that can be a lot harder than it sounds – but that shouldn’t stop you from trying. We all need more stress during the holiday season.
I have tremendous respect for Diane Sawyer, who’s championed this year’s “Made in USA Christmas” challenge, but I wonder whether she’s ever searched the Internet for a pair of men’s sheepskin slippers that are a) made in the U.S. b) affordable and c) look like something a fashion-forward college student would want to wear. I imagine Ms. Sawyer’s a little too busy, but maybe she has a personal assistant who can do it.
I ultimately triumphed in my quest, but the effort to buy an acceptable “Made in USA” gift cost me at least six hours in online shopping, a few phone calls to local retailers and way more money than I originally intended to spend on one present. What did I end up with? A beautiful $154 pair of moccasins from a company nestled in North Central Minnesota near the headwaters of the Mississippi River. (I could have spent a lot more had I opted for buffalo, moose or elk hide.)
What did I learn from my exhaustive and exhausting attempt to buy a suitable gift made in the USA? It’s Christmas, so I’ll put my observations in wish-list form:
1. Marketing savvy. Even the most well-intentioned shopper may be discouraged by dated-looking, hard-to-search websites that fail to compensate for the lack of local retail outlets for U.S. goods. The Made-in-America movement depends on the Internet. I wish they would make better use of it.
2. Design values. Daniel Boone could have worn many of the “Made in USA” men’s slippers sold today, including ankle or knee-high mukluks and canoe moccasins. I wish U.S. manufacturers could produce more mainstream fashion styles. It’s easy to buy work boots made in the U.S., but try buying a pair of women’s dress shoes.
3. Affordability. I accept that U.S. goods will cost more than those made overseas and I’m willing to pay more for them – to a point. Perhaps if my first two wishes are granted – a less homely aesthetic and more successful marketing – products that are made in America will become affordable to all Americans.
Don’t worry Ms. Sawyer. I’m not giving up. I’m still committed to buying “Made in USA” products whenever I can. Like many Americans, I want to reduce my carbon footprint, create U.S. jobs and chip away at the nation’s trade deficit. So, I lift my figurative glass in a New Year’s toast: “May buying U.S. goods become easier in 2013.”
The Consumer Confidence Index is up. The real estate market is supposedly recovering. People are buying as many cars as they were prior to the economic crash. Forget the fiscal cliff. Forget the new tax hikes. Obama retained the White House and all is well with the world.
As my 12 year old daughter would say ….”Not…”. While the media hopes to focus on the positive news regarding Christmas shopping and Black Friday giddiness, Spectrem Group Millionaire Corner research says that “all is not so”. While the headlines focus on the lack of progress being achieved by the President and Congress regarding the fiscal cliff, the real Americans who will be the recipients of this foolishness are quietly cutting back on their holiday spending, reassessing their portfolios, talking to their accountants and tax attorneys and preparing themselves for a grim 2013.
Our research shows that 63 percent of investors do not think that Congress and the President will be able to avoid the fiscal cliff. This concern is even greater (exceeding 80 percent) for business owners who fuel the economy. Oh, yeah…I forgot. President Obama believes that less than 2 percent of small businesses will be impacted by the tax increases. Eighty four percent of the small businesses we surveyed said they believe their taxes will increase. (I guess Harvard Law School doesn’t teach their students about Subchapter S corporations and Limited Liability corporations. ) In fact, 85 percent of all of the investors we surveyed believe their taxes will increase.
Spectrem’s Affluent Investor Confidence Index and Millionaire Confidence Indexes plunged this month. Unlike the average consumer, these households with $500,000 of investable assets or greater, understand that their lives are about to change. A large percentage of these individuals are retired. While their annual incomes may not subject them to tax, their decisions regarding raising cash on which to live will become increasingly important. They will pay a much higher capital gains tax should they be forced to sell securities. They can no longer live on the dividends from bonds because of the low interest rates. The higher taxes will impact them for sure. In fact, 85 percent of these retirees believe they will be subject to higher taxes.
Investors were especially concerned about the impact of the election and the fiscal cliff on their individual households. Confidence in the economy fell almost 40 points in our Affluent Household Outlook component of the Index. Company Health fell 28 points to a 5 year low. Household Income and Assets also both fell. What does this mean? While investors aren’t yet certain that they might lose their jobs, many are worried that unemployment may once again increase and that they need to worry. Most importantly, Millionaires were the most concerned about the economy. This is a very dour outlook, and Millionaires are generally more positive than the merely affluent households.
How will these investors react to the upcoming tax increase? Fifty eight percent will spend less. That is especially true for those households with $100,000 to $500,000 of net worth. Seventy five percent of these households will spend less. These are the individuals who will be hit with the tax hike because they are deemed “millionaires” under the current definition of wealthy. Most of these households are two income households, trying to pay for their children’s college education and to save for retirement. They are working hard trying to achieve the American Dream. Instead they are paying for everyone else’s. These households are not eligible for financial aid. They have 401k plans not union pensions. They have trouble saving for retirement because they are paying tuition. Most are highly educated professionals and small business owners who have worked hard to make their own way.
An increase in taxes may be OK for Warren Buffett who has billions of dollars. But someone who makes a combined household income of $251,000 is not in the same league. Thanks, Mr. Buffett, for showing so many Americans that the American Dream may not be worth the effort. Better to sit home, make less and avoid taxes.
Representing well over a million US households, Business Owners and their attitudes and opinions will be critical in the upcoming election. Based upon recent research completed by Spectrem Group, Business Owners are very concerned about their retirement, their business revenues, and financing the educations of their children and grandchildren.
As many of you know, Spectrem Group does ongoing research with investors across the country on an ongoing basis. Our recent report focuses on Business Owners of multiple different wealth levels. Not surprisingly, as the level of wealth increases, the percentage of households represented by Business Owners also increases. For example, 27 percent of the 107,000 households with more than $25 million of net worth, are Business Owners. This compares to the 3 percent of Mass Affluent households (those with $100,000 to 1,000,000 of net worth) that are Business Owners. There are, however, 36.7 million Mass Affluent households, thus more than a million are Business Owners.
For the most part, the research shows that what are defined as “National Concerns” are much higher for Business Owners than for other households. For example, 98 percent of Mass Affluent Business Owners, 75 percent of Millionaire Business owners and 92 percent of Business Owners with more than $5 million of net worth are concerned about the National Debt. In comparison, 71 percent, 76 percent and 80 percent of other investors in the same segments feel similarly. Results are similar regarding tax increases.
The national concerns with the most dramatic results include concerns over the Prolonged economic downturn and the Upcoming general election. One hundred percent of Mass Affluent Business Owners are concerned about a Prolonged economic downturn and 96 percent are worried about the Upcoming general election. Ninety eight percent are worried about the Political Environment. 
While the research did not specifically ask these Business Owners who they might vote for, some assumptions can probably be made regarding their attitudes. Considering this group is the least likely to believe things will be better in the next twelve months, you might believe that they are likely to get out and vote on election day.
I narrowly avoided sugar shock while attending a recent high school graduation ceremony - though I might have a stress injury due to repeatedly rolling my eyeballs. One young speaker was sure all her fellow graduates would take the “world by storm,” and that the class contained not only the next U.S. president, but also a future senator, Oscar winner and Nobel Peace Prize recipient. Another speaker – using the sports analogy of a perfect game – assured the graduates they could achieve whatever they wanted as long as they knew what “pitches to throw.”
At the other extreme, Massachusetts English teacher David McCullough told graduates of Wellesley High School that “none of you is special.” He drove his point home with a dizzying array of statistics that would make any human – even an invincible 18-year-old - feel like an ant. (Did you know that 3.2 million students graduated from 37,000 U.S. high schools this year?)
Author Lisa Bloom took another tack in a recent Huffington Post blog making one giant apology on behalf of all the adults who have messed up the economy and ruined the chances of the next generation. The contrite Bloom served up all-too-familiar economic data describing the bleak outlook facing young Americans.
It’s time for me to roll up my sleeves and lay out my own high school graduation speech. What would it say?
First and foremost, high school graduation is a legitimate celebration and rite of passage calling for a few congratulatory remarks. After all, not everyone sails through high school – despite all the coddling that takes place – and not all students make it to graduation. The America’s Promise Alliance tells us that one of every four U.S. public high school students drops out before graduation. So congratulations, to those who’ve earned their diplomas. Your efforts will be rewarded with better chances for employment and higher salaries.
The brief praise would be followed by an even briefer reality check: High school is to the real world, what a gold fish is to a piranha. No point in dwelling on the negative, though. The nation has a plethora of doomsayers, and high school students are scared enough as it is. They may be covered in bubble wrap, but they keenly sense their precarious position in the world. This year’s high school graduates need encouragement, not the false hopes offered up in a traditional graduation speech, nor excoriation or gloom-and-doom forecasts. They need to be reminded that high school has helped prepared them for the next step.
After all, high school isn’t one long picnic, but rather four years of academic stress, co-curricular challenges and intense social pressure – and many students complete this endurance event despite a chaotic home and community. The high school years are a time of exuberant discovery and colossal failure: flubbing a game-winning play, failing that first exam, not getting a part in the school play, being turned down for the Homecoming dance. High school students learn the world doesn’t end, even when it feels like it’s going to. They get up and try again.
I would remind the young adults making up this year’s graduating class that they are tough, that high school has taught them resiliency, given them the skills to persevere and, with hard work, succeed. My graduation speech would say - to borrow from the real president, “No, you haven’t made it yet. But, yes, you can.”
I would end with, “Class of 2012, I believe in you.”
What would your graduation speech sound like?;
