Is it Time for Corporate America to Catch FIRE?

  This post may contain affiliate links.  Learn more by reading my disclosure.

 

This post may contain affiliate links.  Learn more by reading my disclosure.

Currently, 2/3 of companies in the U.S. have some sort of health and wellness program. This movement started in the 1970s and has continued to grow through the years, exploding with the Affordable Care Act.  Per a RAND study, corporate health and wellness programs spent $6 billion in 2013.  That figure is expected to be much higher today.

We’re a nation battling obesity, diabetes, alcoholism, depression and stress.  The health ailments are so many that it is daunting to consider the various afflictions that individuals face.  These programs are geared to help employees live a healthier life – encouraging better food choices, exercising, and finding treatment when necessary.  Companies figure if they have healthier employees they’ll reduce lost days due to illness and other afflictions, thereby boosting productivity and profit.

Unfortunately, the #1 stressor in American life is still money.

If companies are spending billions of dollars to help their employees get healthy, why aren’t they spending a dime to help them understand how to get wealthy?

Teach a man to fish…

Give a man a fish and you feed him for a day.  Teach a man to fish and you feed him for life. - Chinese proverb

When I was a property manager, the company I worked for held a retreat for their commercial real estate brokers.  Since I was just starting to do some brokerage work, I convinced them to let me attend.  I was the only property manager there that day.

This retreat was held as an educational seminar on how to build wealth.  The initial theme was this: as an independent contractor, you’re on your own to develop a retirement plan.

The next eight hours covered various topics. 

The first speaker talked about developing a monthly cash flow of $10,000/month from investment real estate.  When I first heard that, the number seemed ridiculous and far-fetched.  How could someone like me expect to have that much passive income per month?  However, as he continued his presentation I soon believed that it was achievable and something I could attain with patience and diligence. 

There were real life examples and strategies from two brokers who had built million dollar portfolios.  One broker had a philosophy of partnering to spread risk while another broker had a philosophy to buy only Class C properties with double-digit returns.

One of my favorite memories, was several of the wealthier brokers saying to always pay cash and never buy new when purchasing a car.  They tore apart the idea of financing vehicles.

At the end of the day, my mind swirled with all the new information that was shared.

If we paint the boat, but there’s still a hole in it, is it sea worthy?

If corporate America is going to all this effort to help employees to get healthier, is it working?  It’s obvious that stress isn’t being reduced because we’re treating the #1 stressor as a health matter and not a money habit issue.

And simply raising the minimum wage to $15/hour is not the answer.

I know individuals who make six-figures that live paycheck-to-paycheck.

A janitor passed away in 2014 with an $8 million stock portfolio, leaving most of it to his library and hospital.  He amassed it slowly through the years with careful saving and investing. 

The hourly wage isn’t the problem.  It’s the habits associated with money that’s the real issue.

Every year there are new reports on the dismal savings rate of the average American.  It’s reported now that 6 in 10 Americans couldn’t survive a $1,000 hit to their life.

How is this possible?

Bad habits. 

As a nation, we spend more than we make and we hate delayed gratification.

What if Companies Caught FIRE?

When I discovered personal finance blogs, I was immediately excited by the concept of FIRE (financial independence, retire early).  It tied in nicely with everything I was working to accomplish with my real estate investing.  It’s why I try to control my expenses, it’s why I carry a lunchbox to work and it’s why I’m not interested in driving a fancy, financed car.

Will companies lose employees if they embrace the FIRE concept?  The lifetime employee is gone and it’s time to embrace reality.

Employees don’t work at a company for 30-40 years any more.  Per the Bureau of Labor Statistics, the median length of employment is 4.2 years.  Dig into that number a little deeper and you’ll find that the median length of employment for government employees is 7.7 years and the private sector is 3.4 years.

I believe if companies help their employees truly learn about money, how to control their finances and help them escape the rat race they would get a more loyal employee.

And pointing them to a 401k is a cop-out and complete nonsense.  Let’s not pretend otherwise because we’ve been doing this for thirty years.  Every 401k meeting is an excuse to turn-off your brain.  The message is the same:  auto-invest your percentage so the company will match and then the hired investment firm will take over everything from there.  Go about your life and don’t worry.  You’ll be safe. 

Until a market crash devastates your retirement account and you have to wait for it to recover.

A corporate FIRE movement would help employees learn to control their expenses, invest beyond the company sponsored 401k and to replace bad habits with good ones.  It would be about taking control of their lifes.

When I finally got my finances under control, I became a better employee. 

Why?  Because I wasn’t stressed out daily. 

If an employee develops a savings plan and starts acquiring some assets, will they get a poor work attitude and quit?  I would argue exactly the opposite.

As I mentioned previously, I became a better employee and later, a better broker, when I controlled my spending.  I was excited to see growth in my accounts.  It made me feel like I was accomplishing something.  I wanted to work harder and see more success.

Can I Get a Volunteer?

Since corporate health & wellness programs are employee run, they often find volunteers to jump in and participate.

Would a corporate sponsored FIRE program find willing volunteers?  Could it be sort of a financial Weight Watchers?

I think you would find volunteers easily.  Those who have been through the struggle would step up quickly.  When you fight the battle of debt, you want to help others out.  You want to share what you’ve learned.

When I was raised, it was forbidden to talk about money around the dinner table.  We never discussed it with mom and dad.  As I’ve observed the wealthy, they talk openly and honestly about money.  This is one of the principals of Rich Dad / Poor Dad by Robert Kiyosaki.  The rich and poor talk about different things.

I’m not afraid to talk about my finances anymore.  They were a disaster.  I cleaned them up.  Then I made them a mess again.  Then I cleaned them up a second time.  Life happens and we move on.

I truly thank my previous employer for holding that class for their brokers.  I remember it fondly and often tell others how important it was to me, to help give me the motivation to go out and change my behavior.  However, it was only for the brokers and not all staff. 

Imagine if all employees could talk about ways to cut expenses, increase savings, and spot investment opportunities.

Imagine a world were all companies wanted their employees to reach a level of success like that.

Imagine a corporate world on FIRE.