Haves and Have Nots
One of my good friends, Matt, sent me a Fortune article that outlines another key economic disparity. This one is not like a previous article about the difference in savings between men and women or even the differences between different ethnic backgrounds. No, this one is between generations.
The title says it all. “Boomers are the wealthiest generation that ever lived - and millennials are the ‘biggest losers’ thanks to economic crises.”
What this article highlights so well is something that is often left out of generational conversations. That is the fact that the same strategy does not have the same output in different time periods.
Common critiques by older generations of younger ones is that they do not save like we did and that is why they have less. This might be true in some cases but misses what Forbes points out.
Saving the exact same for Baby Boomers, Gen X or Millennials creates vastly different wealth levels because the time they lived in plays more of a role in outcomes than we often consider. Housing and equity markets are key reasons for this disparity with Allianz suggesting that Millennials will never be able to accumulate the same levels of wealth as Boomers.
If we are not considering this with extreme seriousness we run several important risks, some of which I outline in The Future Poor, and have the potential to be quite damaging. Old strategies don’t work in modern times and trying to do so leads to less progress.
My hope is that every generation takes this very seriously and recognizes the advantages and challenges of each and choose to work together for community financial success rather than throw stones and perpetuate a problem.
The article continues to look at what is being called “the greatest wealth transfer” as Boomers pass away and their wealth is inherited. There are a lot of factors in this eventual transfer with many believing it may be less than expected as wealth needs to be used for old age expense or that the wealth will need to be used in ways to help prop up subsequent generations and not simply amount to wealth accumulation.
Time will tell, but what is true is that the time period you live in contributes mightily to what you are able to accumulate and we should be slow to look down upon younger generations for being behind their predecessors. Empathy will go further than criticism.
Here is a link to the original article from Fortune on Yahoo Finance.
https://finance.yahoo.com/news/boomers-wealthiest-generation-ever-lived-104103574.html?guccounter=1
As always, if you come across a financially related article you’d like to send my way please do!
Best place to send them is to me.
More next time!
Jonathan