For the longest time, Boomers were America’s largest generation, and it’s only recently that Millennials became the biggest one. During this time, Boomers have managed to claim the biggest share of all wealth in America. What’s going on? Today, we’re looking at 25 reasons why this generation has over half of America’s wealth.
Post-War Party
After World War 2 ended, the American economy exploded, which is actually where we get the term “Boomer” from. It was a time when there were plenty of jobs, and so many Boomers jumped right into the workforce. They cashed in on this economic success early, and they’ve managed to hold onto that wealth ever since.
No Housing Hassle
Similarly, Boomers also did pretty well with the housing market, as they could snatch up homes for ridiculously low prices compared to today. All they had to do was sit back and watch as property values shot up, meaning that a property that was worth just a little back then soon became a goldmine. And it’s all thanks to appreciation.
Landlords and Developers
Speaking of real estate, many Boomers chose to invest in homes or develop properties in prime locations, which ended up paying off big for them. They managed to create a passive income stream from rentals or large payoffs from property sales. This way, they had money coming in to support their main income, giving them greater financial security.
The Perks of a Pension
Unlike today’s gig economy, many Boomers often worked in jobs that gave them great company pensions. This means that they can retire with a steady stream of cash flow, courtesy of years of hard work and loyalty. They’re able to achieve their retirement goals in a way that no other generation can.
Stock Market
The stock market has been a blessing for many Boomers, as they’ve seen their investments multiply over decades. Lots of them had good luck in having the right assets at the right time, which has helped them to make their retirement years far more secure. Without the stock market’s support, it’s unlikely they’d have such good finances.
School Days
When Boomers were younger, college was a completely different ball game because it was a lot easier to get through school without the mountain of debt students have today. The GI Bill and cheaper tuition costs allowed Boomers to keep a lot of their earnings after school instead of paying off loans. This gave them a financial head-start so they could invest earlier in their careers.
A Safety Net
Since they’re a lot older than many other generations, Boomers have been able to pay into Social Security for a lot longer. This helped them to keep up a comfier lifestyle because this steady flow of income supports their daily expenses. It means that, unlike many millennials, they’ve got a safety net for financial emergencies.
Cheaper Living and Bigger Saving
Practically everything was a lot cheaper when Boomers were building their lives. These lower living costs meant they had more money to save up for later, and this added up over time. Eventually, many Boomers used this financial cushion to make larger investments that gave them greater returns.
Super Savers
Speaking of saving money, Boomers are pretty good at holding onto their cash instead of spending it. This is mostly because they were raised by people who lived through the Great Depression and taught their kids to watch their spending and save wherever they could. As such, Boomers can take financial risks for larger gains without worrying.
Financial Intelligence
Likewise, Boomers grew up during a time when people started to realize the importance of financial education and teaching people to make smart money moves. They learned how to deal with stocks and bonds from a very young age, which worked out in their favor. When they became older, many Boomers knew how to make informed decisions about investing money.
Inheritance Helps
Since so many Boomers’ parents have passed on, many of them received a financial boost through their inheritances. Better yet, they received this extra cash or property at a time when they could afford to invest it. This has helped them to maintain or even significantly increase their wealth.
Different Policies
There have been several policy changes over the years that have helped Boomers grow their money quite a bit. Whether it was tax cuts or better investment conditions, state officials have helped support Boomer finances in several different ways. Lots of these policies gave Boomers opportunities to grow their finances, and many of them did just that.
Bonding With Bonds
One major way governments helped Boomers make money was through government and municipal bonds, which gave them stable returns and tax breaks. This was particularly useful for people looking for low-risk income streams, as it worked alongside any aggressive investments they made. Over time, this gave them a reliable source of income during retirement.
Business Boomers
Some people in this older generation caught the entrepreneurship bug and started businesses or invested in startups, especially during tech booms. While not all of these ventures were successful, for many of them, they became a kind of jackpot. Owning a business increased their income and gave them more assets, so they had additional streams of revenue.
Dot-Com Dollars
Similarly, Boomers, being of working age, could make investments during the dot-com bubble. They got in early on tech companies, which helped their investments soar. Many of the people who took a risk in new tech industries managed to be part of some of the most explosive financial growth in recent history.
Health is Wealth
Thanks to better healthcare, we’re all living longer, which means that Boomers also have more time to enjoy their money. Having a longer life expectancy means they’re able to create long-term investment goals instead of just thinking about the here and now. Eventually, this means they have more wealth over time.
It Takes Two to Tango
It was during the Boomers’ lifetime that both adults in a household could work, which meant double the income and double the financial power to save and invest. This helped to strengthen many household incomes by allowing for larger investments. It could also mean they were more diverse in what they chose to invest in, which is always beneficial.
The Benefits of Globalization
As the world became more connected, Boomers got many more job opportunities and investments that went beyond their backyard. This helped them diversify their investment portfolios and gave them the chance to increase their wealth in other countries. It gave them completely new international trade options to choose from.
Interest Rate
Back in the day, interest rates were a lot better than they are now, which meant that borrowing was cheap and saving was profitable. Boomers used this to their advantage to buy homes and invest in bonds to become wealthier. For example, they could buy property and start a business, which has appreciated quite a bit since then.
Corporate Climbers
Many Boomers spent their careers climbing the corporate ladder in fast-growing companies. This gave them benefits like stock options and bonuses, which helped them to increase their finances further. If they were lucky enough to work in a highly successful industry, this improved their retirement funds.
A Diverse Portfolio
Lots of Boomers had the foresight to spread their investments across different assets, and this kept them financially secure. Even during times when the economy wasn’t doing so well, Boomers did a lot better than those who put all their eggs in one basket. They managed to strike a balance between stocks, bonds, real estate, and many other investment choices.
Planning Ahead
Many people in this generation are always looking ahead to make sure their wealth sticks around. Lots of them planned their estates to keep their finances in the family and give them peace of mind. Likewise, setting up trusts can help them to protect their assets from taxes or probate issues.
Community Counts
Boomers are big on supporting each other and their community, which has actually helped them become richer. These networks give them a safety net that they can rely on during difficult moments or get opportunities when things are going well. Even beyond that, they can get emotional and practical support that can help them to stay level-headed and avoid unnecessary purchases.
Market Changes
They’ve also adapted pretty well to changes in the market and have adjusted their investment strategies as they see fit. Boomers have dealt with recessions and booms alike by changing their assets to match the times, like moving from stocks to bonds or vice-versa. It’s this adaptability that has allowed them to grow their portfolios steadily.
Early Retirement Planning
This generation was also one of the first to really support the idea of planning for retirement early. They began saving when they started their careers, and many of them had employer-matched programs that doubled their contributions. When they hit retirement age, many Boomers had a pretty sizeable financial cushion to fall back on.
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