Baby boomers have had a $2 TRILLION loss - no more Harley’s
We Baby Boomers just received a rude wake-up call, with a $2 TRILLION lost in our retirement funds in the recent stock market debacle. Unlike our parents, who were savers, we have been spenders, but no more.
When we moved my mother out of her home about 10 years ago, we found box after box of aluminum foil. When we moved my mother-in-law a few years later, we found boxes of unopened cereal and cans of evaporated milk. These ladies, children of the Depression, were savers.
Our baby boomer generation, on the other hand, has been a spending generation. The Wall Street Journal says we Baby Boomers are spending more and saving less. Our rate of savings dropped after 2000 to 2% of income, down from 10% of our income in the early 1980s. And we are earning more now than ever, in these years before retirement.
As I have reported before, my husband and I are taking a closers look at our expenditures. While that’s good as individuals, it’s bad for the economy. If Baby Boomers, the biggest segment of the economy, are not spending, then we’re in for a long downturn. I do know some people who seem unaffected by all this - a friend just bought herself a $1200 Hi Definition TV! I told her thanks from all of us for helping to keep the economy afloat.
Some experts say it could last until 2020, when the Millennials (those born after 1980), start buying homes and cars. So for the near future, we are all going to have to think about those luxury purchases, like that Harley or the cruise, and consider the essentials - as my husband says, “food, clothing, and shelter.”
What do you think?
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Tags: Baby Boomer investors, retirement funds, retirement planning, Stock market crashRelated Stories
POSTED IN: Baby Boomer investors, Boomer Businesses in Difficult Financial Times, Boomers nearing retirement
2 opinions for Baby boomers have had a $2 TRILLION loss - no more Harley’s
Rich
Oct 22, 2008 at 3:15 pm
Boomers were destined to decrease spending in 2010 anyway. That would start the end of the most plentiful generation of spenders ever. In addition we were and still are the most wealthy, in spite of the current mess.
Once our generation purchases their last home, their last new car and ceases to buy fancy over-priced new appliances in large quantities the impact will be felt.
It will most likely be doubled, trebled or multiplied in some fashion by the state of our economy.
All of us need to look to budgeting, smart purchases, stable investment, working longer (if you can find work) and downsizing the easy and expensive things, like houses and automobiles.
We recently sold a large home and will most likely rent till 2010, then consider reentering the real estate market if it makes sense.
In addition, we sold our SUV and bought a Honda Civic. I am loving 35 MPGs.
Now if the country will move away from its current disasterous policies and get back to making things, maybe we’ll be able to turn it around.
Rich
Jean
Oct 23, 2008 at 4:57 am
Rich, I agree that our (collective) spending has gotten us into this mess. I read that the average American household has $8000 in credit card debt. If that doesn’t sound like much, maybe you should think about what that means. It is a LOT of interest.
Spending less - saving more - being kinder on the environment - maybe these things will not only make us more self-sufficient but keep our planet running longer.
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