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The BlueCollarDollar was designed as a place you could go to find the complicated world of finance, debt, insurance, mortgages, retirement, and your investments explained. We have a common sense approach to money. You earn it, you should know what to do with it. We want you to be debt free and we will work at getting you there. We want you to have a financially stable retirement, that is both comfortable and healthy.

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Taking Social Security Private

Terms like, "value at risk" or "real options", or better yet, "Monte Carlo simulation" are part of the financial world's lingo that comes with sophisticated analysis. The public sector, should they want to take their portion of the Social Security into the open market, should be able to use these tools for investing. Could you?

Created in 1935 as a social safety net, the program has grown to become something of a be all to end all for lower income wage earners, keeping millions from poverty in the later years. Factor in the low rate of savings, which is around $40,000 for the average American, and that includes company retirement plans and personal savings, and you have a recipe for disaster. The National Bureau for Economic Research, who conducted the survey further suggests that if you extract those company sponsored plans, the actual savings for most retiring Americans falls to a low of $13,000.

Problems are certainly on the horizon, with many speculative, published reports stating that within 10-15 years, when baby boomers begin their exodus from the work force, there will most certainly be trouble.

The "boomers" will continue to vote and in doing so will not allow any politician to cut benefits. Retirees are going to live longer and there will be less folks working, which means a greater tax burden on the remaining work force.

Privatization takes the dollar that would have been bet on Social Security and the possibility that expanded benefits will not be available, and places it on the potential for the stock market and a company's underlying ability to make a profit. This will prove to be incredibly risky.

The average return for the stock market has been around 7%. This is not a guarantee and could be considerably less. Averaging in all of the world stock exchanges over the last eighty or so years, and the return falls somewhere in the lower 3% range. Sure, the United States has a vibrant and strong economy, but the bet that it will continue to grow outside of the rest of the world is another risk that must be considered.

Volatility is more than a passing concern. Markets have fluctuated greatly over that eighty year period and will do so with certainty in the future. Consider market earnings of a minus 48% in 1931 to a plus side movement of 49% two years later.

Is a 7% just luck if you can expect this type of return 36% of the time?

And while all you eager investors are at it, ask yourself this question: If the average price to earnings ratio for the last one hundred years has been 14, and the current p/e of the S & P 500 is around 25, shouldn't we expect some sort of adjustment downward?