Stop planning your future retirement, live in style today

Over the past 85 years, the financial services industry—banks, financial planning, insurance, and stockbrokers—has experienced double-digit growth by luring people frightened by the prospects of poverty and scarcity into retirement. Everything from radio to commercial television to print ads projected bleak retirement prospects if people didn’t save and invest. People born between 1912 and 1945, who are currently between the ages of 60 and 93, responded to this marketing ploy while experiencing the pain of the Great Depression.

The Great Depression caused the greatest economic recession ever seen in industrialized nations. The Great Depression began in 1929 when the stock market crashed. Stock values ​​fell 80 percent. Not only individual investors lost big, but so did the banks. Many banks had a large number of shares in their asset portfolios. So much so that 11,000 banks out of 25,000 collapsed in the US alone. Lost individuals on three fronts. They lost money in the stock market, in the bank and in their jobs. The booming manufacturing industry experienced a 54% drop in production, causing 25-30% of the workforce, roughly 12-15 million people, to be laid off.

With so many people out of work, bread queues and soup kitchens became commonplace. People had no money to eat, clothe, or shelter. Unfortunately, the government also did not have the resources to help them. The impression of the Great Depression has been firmly imprinted on the minds of people between the ages of 60 and 93, born between 1912 and 1946. Most promised themselves that they would never again suffer the deprivation they suffered during the Great Depression. Therefore, these individuals are frugal; budget-conscious savers who disdain credit and speculative investments. They sought the safety of guaranteed investments and the safety of the insurance companies that weathered the Great Depression. With the evolution of the Federal Deposit Insurance Company (FDIC), they distributed their money among various banks. Although they have money in banks and brokerage houses, they don’t really trust banks or brokerage houses. They trust the FDIC and SIPC (Security Investor Protection Corporation).

The financial industry evolved around the financial behaviors of these Depression-era individuals. These individuals amassed the greatest amount of wealth in the history of the United States. Because they were just afraid of another Great Depression.

The financial behavior of Depression-era individuals is the exact opposite of those born between 1946 and 1964. These individuals are called Baby Boomers. These individuals never saw lack. Their mothers, once housewives, worked in manufacturing during World War II. When their husbands returned from the war, many women continued to work outside the home. His employment brought new wealth to the home. It also put her in charge of making financial decisions. Women now influence 80% of financial decisions. After World War II, the US government created an economic boom that generated new jobs and more income than the US economy has ever seen. Baby Boomers have always seen good economic times. They have never experienced financial scarcity, financial loss, or suffering.

While Depression-era people are motivated by fear of poverty in retirement and in the future, Baby Boomers are not, having never experienced lack, loss, or poverty.

Therefore, their financial behaviors are the opposite of Depression-era individuals. Baby Boomers live lavishly, spending beyond their means on high-limit credit cards. They are attracted to speculative investments with high potential returns because they are confident in risk. Your risk has paid off.

Unlike depression-era people who were natural planners and budgeters, Baby Boomers are not. Although they are goal oriented, they disdain budgets and plans.

The Great Depression taught delayed gratification, as many people waited 10 to 25 years to accomplish goals as simple as buying a home. Depression-era people were already motivated to save and plan. All they needed was education on investment products. The entire financial industry evolved around product differentiation. Depression-era people bought product A or product B.

Baby Boomers are not motivated to save or invest. They’re also not good candidates for late gratification. They were instantly successful and wealthy. They earned more than their parents and grandparents. Wealth always seems to be available, so why plan for it? Baby Boomers live the good life without worrying that it will be replaced by an economic depression.

Baby Boomers want the good life. They will not sacrifice the good life for retirement or the future. However, they are open to buying name-brand luxuries at a discount, according to Ira Mayer, famed marketing guru.

If Baby Boomers were to focus on Future Spending Plans, they could allocate additional dollars to invest. For example, a family can easily spend $50,000 a year on luxury items, including travel. With discounts, they could reduce their expenses to $35,000 a year by saving $15,000 on product purchases. Normally the sales tax on the $50,000 worth of products would be in the range of $3,000 to $7,500 depending on which state you live in.

The family with the original budget of $50,000 could save up to $22,500 each year. Over 10 years, those savings could add up to $298,000 or $643,000 assuming. The greater the savings generated by discount purchases, the greater the investment accumulation that can grow. This accumulation can be used to live life more luxuriously, as it provides some peace of mind.

All future spending plans should start with access to discounted luxury products. The Internet has sites like http://www.livinginstyleonline.com to accomplish that task. So Baby Boomers stop planning their future retirement and live in style today.

Footnotes

Canada.com News 2/21/05 Article Investment attitudes vary by generation

Cleveland Plain Dealer 10/31/04 Item First Generation

Ira MayerGeneration 50+www.epmcom.com

Marketing for Women

Britannica Encyclopedia
History of the Great Depression

www.livinginstyleonline.com