Rich Old People – Common Sense Wealth
Adults have time in the economy.
According to Axios, people 55 and older now make up more than 45% of the money spent in America:
The Wall Street Journal shows that the 70-and-over crowd now controls nearly a third of the total:
Those 55 and older control nearly three-quarters of the wealth:
These types of numbers make MOST young people angry.
I understand the irritation/annoyance/frustration. If you’re not moving forward, you feel like you’re falling behind, you don’t have a home or much money, I get it — you have to blame someone.
There is a necessary context though.
There are more adults than ever before!
Eric Finnigan from John Burns has some great charts on demographics.
We have never had a generation as large as the children born. They live longer than previous generations:
These numbers will continue to rise:
Many of them have paid off mortgages:
This is also the first group in history to access IRAs and 401ks. They have had decades of incredible profits in the financial markets to allow their assets to consolidate.
Young people also settle down later in life:
The thing is, as big as the baby boomer generation is, the millennial generation is a little bit bigger. The largest group in the US is now in the primary category of home construction:
There are many buyers on the sidelines right now because the housing supply is out of control. Sure, some of these people will remain renters but many will eventually get sick of waiting and pull the trigger, high housing prices be damned.
It is also true that Father Time is not defeated.
Many of the older generation’s financial assets – including homes – will be passed on when they pass away.
The Wall Street Journal has some estimates:
Gen Xers and Millennials will inherit $4.6 trillion globally over the next 10 years, according to the report, which compiled data from research firms Altrata and Cerulli Associates. About $2.4 trillion of that property is in the US
Boomers can’t take you all to the grave.
How will this affect the housing market?
Will the next generation sell these homes? Do you live in them? Renovate and hire yourself?
Is there a Silver Tsunami of homes coming to market because of it? To explain a little?
Eric joined me on Talking Wealth this week to talk about demographics, what it means for the housing market and much more:
Further reading:
The End of Demographics
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