- The Big Boomer Theory: Millennials to inherit the Greatest Wealth in History from the Fading Richest Generation
- What is a Baby Boomer?
- Here comes- “The Greatest Wealth Transfer”
- “Communication” is the key to prepare for the Greatest Economic Moment in History
- Life is Messy and Everybody makes Mistake
- Will Economy follow the slowing down Boomers?
- The Unluckiest Generation in the Economic World- The Millennials?
- The good news? In the age of abundance, planned allocation can transform our fate to Lucky one’s
The Big Boomer Theory: Millennials to inherit the Greatest Wealth in History from the Fading Richest Generation
It is 2030, you step outside looking at the clear sky taking in a lungful of the open-air but suddenly the clouds turn dark and it rains money, cars, lands, properties and all the investments worth 59 trillion dollars bestowed upon you by your ancestors from heaven.
Just the circle of life, there exists‑ the cycle of wealth. When the baby boomers start to pass away to a heavenly abode, what will happen to the wealth they have left behind?
About 10,000 boomers turn 65 each day. This withering boomer population means that an estimated $59 trillion of wealth will be passed down to millennial offspring and successors.
Well it’s time to celebrate – Woohoo!
However, just one logical question to burst your bubble is whether or not inheriting generations and beneficiaries are well suited and educated to handle whatever is passed down. Are we millennials ready to pay the Taxes and comply with the Real Estate laws. After all, it has been honoured upon the title of – “The Great Wealth Transfer.”
Do not go into the great depression now, we have got you covered.
What is a Baby Boomer?
Baby Boomers are born between the years 1946-1964.
Baby boomers emerged after the end of World War II, when birth rates across the world spiked. Why you ask? After years of war and invasions they finally had a chance to start a family. And boy oh boy, they were on a mission to populate the world. This explosion of new infants came to be known as the baby boom.
Baby boomer is a word used to define somebody who was born between the years 1946 and 1964.
The baby boomer generation makes up a substantial portion of the world’s demography until the millennial generation slightly surpassed them.
This generation has had- and continue to have- a significant impact on the economy because of their large number and prosperity of the economy during their career years.
Here comes- “The Greatest Wealth Transfer”
Humans Transfer wealth and assets to their offsprings.
When boomers pass away, they’ll be leaving more than just bank accounts to their children or heirs; they’ll be leaving businesses, portfolios and real estate.
This wealth will soon need to pass down fall to Generation X (current between 56-76 yrs. old) and millennials (current between 20-35 yrs. old), two generations that have very different spending, savings and lifestyle habits.
Older millennials are now in their late 30s, and many of them could be inheriting money or property as a result we will witness the- Great Wealth Transfer. In no prior time in the history has such a vast amount of wealth moved through the hands of generations.
This effects both – boomers who will be passing down possessions, as well as the millennials and receivers that will be accepting them.
“Communication” is the key to prepare for the Greatest Economic Moment in History
The Generation gap between Boomers and Millenials results in Communcation Gap.
If you expect to pass down money or inherit, it’s important to start thinking about this now, especially if you are or have a parent on the threshold of retirement.
The first thing to do is to talk as a family. For generations we have been facing communication problems, I know.
Our parents don’t understand us and we don’t know how to make them understand.
As uncomfortable and emotionally driven these conversations might be, the last thing parents should want is for their children or heirs to be on different pages when the money is transferred.
The best discussion and understanding on finances between parents and children can be with the presence of a Good and Knowledgeable Financial advisor.
Life is Messy and Everybody makes Mistake
“Mistakes are part of the dues, one pays for a full life.” – Sophia Loren
Financial Planning is a fundamental necessity for all Generations.
For the Millennials – Recipients can walk away with a little or lot of money, no harm in that. But it is a mistake to not have a plan for those assets no matter how small or big the wealth is. One of the best decisions millennials can make is – pay off the student loans or other debts with the money they receive.
The quicker and earlier you pay off your loans and debts it will be a better financial advantage for you.
For the Boomers– who are passing their money down, a common mistake is believing that any cash remaining in their qualified retirement plan (The pension plan) will be passed down according to their will.
In fact, the laws governing the Inheritance Will (Vaseeyat in Hindi) changes according to the designation of the heir.
It’s fundamental that parents update their beneficiaries’ information when they change jobs, get married, have
A penny saved is worth Two pennies Earned in Today’s Modern Economy.
children or get divorced. Imagine getting a divorce and remarrying but you forget to update the beneficiary. When you pass away, the ex-spouse will get all of your hard-earned assets. Karma at its best indeed!
No matter what stream you are from- Science, Commerce or Arts– Educating yourself about your personal (micro) and national (macro) economics will help you in your long term Financial goals. No economics alone will not make you rich but it will definitely make you richer than those who are ignorant towards it.
Will Economy follow the slowing down Boomers?
Economists have constantly expressed concerns about trickle-down economic effects as boomers move into the old stages of life.
Millennials are the future of World Economy.
The Unluckiest Generation in the Economic World- The Millennials?
Some might call our generation ungrateful as we did have better educational opportunities than them. Most of our parents and grandparents survived wars and poverty for our better futures.
No doubt that because of them we live a life of comfort.
But in the process these Boomers unknowingly created an extremely competitive market and unrealistic financial goals for the generations to come.
Our Generation is the most educated in Global history, but it all came at a price. Average debt for graduates of community universities doubled between 1996 and 2006. Students however took the loans in the hopes that it will find them a job to pay the debts off. Instead they were thrown into the worst economy we have ever witnessed.
According to research millenials make 17% less money than the Boomers, due to falling Economy.
Finding a good job at the young age itself will always remain a dream for many. The unemployment rate for young people scraped 18 % in 2010 and by 2020 it has reached 50% and above. In the past five years, real wages have fallen for millennials – and only for millennials.
Millennials could continue to struggle to find and maintain gainful employment, which will impact contributions to federal, state, and local tax revenues in the short and long term.
Coming of age in a recession has set back Millennials for decades.
The good news? In the age of abundance, planned allocation can transform our fate to Lucky one’s
Millennials v/s. Boomers
The way Millennials live—their opportunities and constraints; the choices they make while navigating their formative years—will shape society and ultimately impact governments at the federal, state, and local levels. The potential of Millennials is remarkable and one never seen in history before.
In modern history, young people have pursued higher education to increase their lihood of success with positive outcomes, and education is generally referred to as a societal equalizer. A focus on Millennials equipped with the standard tool for success provides unique insight on the potential significance of the trends discussed throughout.
With assets available it will all be a simple economic game of – “resource allocation”
Save-Invest mantra will be a boon to our generation. Yes, we are kids who are always looking for instant gratification no fault of ours. The pressure on our generation is incomparable but the solution can be definitely compared, analysed and practised.
Illustration by Alex Fine.
Millennials are left to clean up after the previous generations.
As you think through how this titanic shift of wealth may or may not impact you, consider what additional and non-obvious opportunities it may create for you. Think about all the new career opportunities, investment approaches or entrepreneurial ideas that will result from these macro and micro changes.
While you’re at the thinking, it may be worth to ask grandpa if he has any hidden treasures, not for your greed but for the betterment of our generations. After all Boomer or Millennial – we are all part of this one Big Bang Theory of Falling Economy