And the implications for your investment portfolio
Ric Edelman: It's Wednesday, March 8th. Earlier this week, for a couple of days, I was telling you about the absurdity of the Social Security system, referring to full retirement age, when in fact it has nothing to do with being full at age 66. If you missed those couple of podcasts, just take a look at the show notes and listen to those couple of entries. I said that what the Social Security system needs to do is get rid of the term full. Well, guess what? Four senators have now just introduced legislation that would indeed change the language used by the Social Security Administration. Under their bill, full retirement age would no longer be called full. It will now be called standard benefit. Age 62 would be called the minimum benefit and age 70, the maximum benefit exactly the way it ought to be.
Now, I'm going to take full and complete credit for these senators having launched this legislation because they no doubt heard this podcast earlier this week and spurred by my enticement, launched this legislation. I'm going to take full and complete credit for this. (Of course, I'm making all that up.) The senators introduced their bill on Monday. I didn't realize it when I chatted with you on Monday and Tuesday. Anyway, the bill is Senate Bill S664. It was introduced bipartisan, sponsored by two Republicans and two Democrats: Republicans Bill Cassidy of Louisiana and Susan Collins of Maine, and Democrats Chris Coons of Delaware and Tim Kaine of Virginia. I'm very hopeful that the Senate will pay close attention to this legislation, pass it and send it to the House and ultimately for the President to sign it.
And if you want more detail on what the problem is and why we need indeed to fix this, go listen to Monday's and Tuesday's podcasts via the show links.
Now, let’s switch gears. For 100 years, America has had a love affair with cars. We drive more than anyone. US drivers average 14,000 miles a year, twice as many as French drivers. In 1977, the Supreme Court said that having a car was a virtual necessity for anyone living in America.
But now that love affair is ending. In 1997, nearly half of 16-year-olds had a license. Now only 25% of them do. Teenage drivers now drive 35% fewer miles than they did 20 years ago. The same trend is happening in Europe.
There are lots of reasons for this. With social media, we don't need to go to the mall to be with our friends. Covid locked us down, changed our habits. Cost of cars is at an all-time high. The average new car costs over $50,000. The cost of gasoline is near a 10 year high now, costs $11,000 a year to operate a car. Gas maintenance, repairs, taxes, tolls, parking, Uber and Lyft make it easier than ever to get around without a car cheaply and quickly, without any of the hassles of owning one. And to prove this point, researchers at UC Davis asked teenagers why they're not getting a driver's license. And the kids gave a multitude of reasons. Too many restrictions, they said, like they're not allowed to have other teens in the car with them. They can connect with their friends' using smartphones and social media instead.
There's no longer any real prestige associated with owning a car and driving anymore. Kids prefer to use public transit, bike or walk. They're worried about safety when using a car. They're afraid of drunk drivers, people who are texting while driving. They're worried about their own lack of experience and skill behind the wheel. They're also worried about the overall cost of using a car.
And a lot of young people think owning a car is inconsistent with their attitude about protecting the environment. Cars are bad for the planet, right? So the next generation simply doesn't feel about cars the way you and I do. And cities are helping us curb our car use as well. In Norway, the capital city eliminated all street parking. So did Paris. In New York, they banned cars from Central Park, Times Square, and on weekends from Fifth Avenue. Entire lanes of traffic are now filled with outdoor restaurants in Minneapolis and Boston. Across the entire state of California, they're telling builders to stop adding parking spaces outside their buildings. City planners worldwide are redesigning urban areas. In Paris, the goal is to be able to get anywhere within 15 minutes without a car. Once people start walking and using bicycles, they discover they love it, they hate their cars.
What impact does all this have on the future? Well, it means several things. The auto industry needs to reinvent itself. We've got 400 million cars in the US. They're parked 90% of the time. A move to ridesharing services is going to grow. Soon you're going to treat cars the way we currently treat elevators. You get in the first one that shows up. And when you're done with it, it goes on to help somebody else.
We're also going to see a movement to electric vehicles. So the environmental concerns are reduced and we'll see a movement toward self-driving vehicles. So safety is not a concern the way it is today. No drunk or distracted drivers and no drivers who don't know how to drive.
Another thing we need to do is to introduce new tech to make auto manufacturing itself more green. This is already happening. Researchers at the University of Birmingham in Great Britain say they have figured out a way to make steel in a process that cuts CO2 emissions by 90%. This is a big deal because when we make steel, we make a lot of CO2. For every ton of steel we make, we create nearly two tons of CO2. Steelmaking is responsible for 9% of all the world's greenhouse gas emissions. But now these scientists say they can cut all that by 90% and they're going to have a prototype up and running within five years. They figure it will cost $500 Million to build a clean energy steel manufacturing facility. But the investment recovered in less than two years because the new plant will be so much cheaper to operate, it'll save $1.5 billion over five years. So it will lower emissions and save money.
ETF Investing Opportunities
You really need to pay attention to what's coming and you need to invest accordingly in what's coming. There are so many related ETFs in this space to do it just from Global X ETFs alone. They have the AI and Technology ETF, the Robotics and Artificial Intelligence ETF, the Thematic Growth ETF, the Automobile and Electric Vehicles ETF, the US Infrastructure Development ETF, the Clean Tech ETF, the Lithium and Battery Technology ETF, the Solar ETF, the Copper Miners ETF, the Disruptive Materials ETF. Global X is a leader in thematic investing, leading the way with exponential technologies. I encourage you to talk to your financial advisor about Global X ETFs or just visit Global X's website at GlobalXETFS.com.
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Thanks, FEISTY. You can leave your comment or review on Apple Podcasts for The Truth About Your Future with Ric Edelman. I might read yours on the air too.