Making money in the market is gone for the next 2 to 3 generations. What is going on right now is the baby boomers (Garth included) gambling to make money cause they haven’t made anything or enough for their retirement. Grow a brain, Garth. – Ecco Vancouver
Most days I enjoy this blog. Yesterday wasn’t one of them. It sucked.
My topic was simple: risk. By seeking to avoid any shred of it, millions of people are rushing headlong down the wrong path. The fear what they don’t know. And that’s a hell of a lot.
While the penultimate risk we face is running out of money, most people focus on losing it. So they plow cash into zombie bank accounts, not taking the time to learn the alternatives, of which there are legions. So, they seal their fate as financial losers, joining the dinglenuts who leveraged their futures for houses they couldn’t afford.
But that’s not the story.
Instead, the comments here paint a picture of escalating generational warfare. There are obviously a lot of pissed-off twenty and thirtysomethings who see a connection between financial markets, banks, corporatism, wealth, governments and boomers. They blame their parents for making houses unaffordable, sucking off all the good jobs, emptying out pension plans and screwing up the economy.
Where boomers were buying houses, having babies and getting decent jobs in their late twenties, they contemplate staggering student debt, perpetual rent and scratching for employment. The hallmark now seems poverty, not optimism. Understandably or not, it’s bred a deep resentment, and the search for something to blame has found an easy target.
Large swaths of the boomers are profligate weenies, of course. They lucked into years of fat economic growth, laced with inflation, rising salaries, falling debt loads and a housing boom. They had careers and kids, even after snorting and humping their way through youth. Today they have the bulk of their net worth in houses, are hanging on to jobs and likely to live a hideously long time yet. In more reasonable societies, they’d be pushed off on an ice flow into a dark sea.
So boomers are easy to hate. Even their damn music won’t die. Think Bon Jovi playing to 20,000 cougars.
But despite this, the fact is financial illiteracy and systemic risk today slices across the boomer generation and that of their kids. Most of us are pensionless, lacking diverse investments or enough wealth to make it into our eighties. The real estate market is now heading south, potentially erasing billions in net worth, while the economy is weak, in fundamental transition, and financial markets seem obtuse and dodgy.
Many boomers are utterly screwed as a result. They, too, failed to take the time learn about investment alternatives, tax avoidance strategies and asset allocation – because it was too easy flipping houses and watching salaries rise. Only one in three has a corporate pension. One in two has an RRSP, with enough money (on average) to live for three or four years. And if houses are rendered illiquid, what’s left?
GenXers and GenYers are cut more from the same cloth than they like to admit. If houses were affordable and inflating, they’d be happy to pile in. And – if this blog’s any indication – they’re content to stay as uninformed as many of their roadkill parents.
The enemy is not the stock market, Goldman Sachs, globalization or CIBC. There is no salvation in trashing other people, dreaming up conspiracy theories, manufacturing non-existent dangers in a world which has enough already or wallowing in your own piteous and self-indulgent stupidity.
The way ahead is as I have laid it out. Invest money, don’t bury it. Diversify to mitigate risk. Learn to slash tax. Embrace opportunity in volatile times. Learn what you don’t know. Trash debt. And take responsibility.
Don’t care if you 25 or 60, same rules.
Oh yeah, one more.
Never have a dump on my blog.
