Boomers. Roughly 25% of our population (30% at birth), born ~1946 – 1964. In my view, boomers are the luckiest generation ever (more in the next blog).
With a shrinking baby boomer population slow, growth of GDP, lower demand and declining value of boomer goods will continue. Negative GDP, Deflation, and a reduced standard of living will follow (not soon, we will not all die that quickly). Boomers born into families starting somewhere around 1946 were typically not rich due to the depression, the war, and not so prosperous times in America. For those that saved and invested into the 50’s and most of the 60’s, the wealth ball started rolling for many families. Hard working, fiscally conservative, socially liberal (if they could afford it) was probably the norm as boomers pursued a better standard of living by owning stuff not renting.
The material well-being of the average person is a simple objective measurement we could as boomers all pursue and use to compete with each other. Through education, institutions, and measurable objectives, success was defined as whoever could spend more had a better standard of living and was therefore more successful. Hoarding is the extreme representation of peoples’ pursuit of stuff for many different reasons (obsolete cars, watches and other collectables). Boomers think they are not rich. Because they compare themselves to what they see others consume and have.
The next generations are more subjective in their pursuits; experiences (Quality of Life) not objective stuff (Standard of Living) like boomers. All the expensive stuff boomers bought for thousands of dollars are now in thrift stores for hundreds. All for the next generation to buy, use, and repurpose for a lot less than what we boomers paid. Who spent or spends too much and bought what we want not what we need? And called stuff investments that had no earnings or cash flow?
Inflation, GDP growth, and the increase in the standard of living all require more spending. If our children are getting our standard of living (our stuff) for free or for very little from the thrift shop, then deflation, negative GDP and decrease in the standard of living is also inevitable. This does not mean that quality of life for the next generation will be bad or the stock market either. The big question is what they will do when they get our assets? After all, it’s inevitable. Teach them that money is not to spend but to go to work to provide cash flow not income when they can’t work or don’t want to.