How will future generations shape the world, economy and use their finances?
As we progress through life, we look at our financial situation and consider what we have to pass on to our children and future generations. What finances do we have to leave them? Do we have any assets to transfer or manage? How do we expect them to manage their finances and secure their future? Parents naturally want to provide for their children and hope to see them live a full and prosperous life. Part of this desire is to create a stable financial future for them – many parents indeed plan this carefully and create a portfolio of assets and investments that can be transferred to their children or spouse when the time arises.
Different generations and different outlook on money
This process and how finances have been managed and transferred has changed dramatically over time. Economic climates change and social norms and outlooks changes. Different generations have a vastly different outlook on money, investment and how they manage finances. For example, you may have a grandparent, parent, and child, each of which has a hugely different opinion and outlook on how their money should be invested. What can we expect for future generations? How will they manage their money? What investments are they likely to make and how will the baby boomer fortune see use? This is an extremely interesting topic that may have far-reaching implications for your own investments and decisions.
When considering these questions, we should look at historical accounts, the general change in perceptions and management of finance, and the state of investments in today’s modern world. How have previous generations behaved, and what implications does this have for millennials and our future youth.
Progression in history inevitably changes the way we deal with finance
As the world and human race has progressed, so has our understanding and use of finance. Thousands of years ago finance could be found in the form of gold, silver, and tradable goods – People sought value and usability. Goods and coins were traded at face value and there was little concern for investment or profiteering. Means of currency and trade evolved as the centuries passed by and more complex financial management emerged. Banks were created and central organizations were formed to control the flow of money and how the public accessed it.
This gave leave to the creation of investments, stocks, shares, interest rates, and profit. The public was now aware of the benefits of investing and how you could create a brighter future for your children. As finance has evolved, so has our understanding of it and how it can be used as a potential tool. Furthermore, the quality of life has generally improved as time has progressed – People experienced better working and living conditions and had an increased amount of leisure time and money to spend. This culminated with the baby boomer generation.
Demographics: Baby boomer generation
The baby boomer generation is considered to be a demographic of people born post World War II between 1946 and 1964. This was considered to be the first generation that had a positive outlook on the world and expected progression. The world wars had ended and political situations were calming all over the world. This generation experienced great levels of income, fitness, and well-being. They could have a huge impact on the world and bring about a great deal of social, political and financial change. Furthermore, they broke many traditional views and ushered in a new productive era for future generations to thrive upon. Now-a-days we can use tools such as Personal Capital to monitor and manage our finances and investments.
How did the baby boomer generation deal with their finances?
This generation had what some consider a selfish outlook on personal finances. Due to greater than average wages and good living conditions, thought could be given to investments and profiteering. Individuals could potentially improve their own wealth and there was a wide range of investments available that could pay off greatly. Stocks and shares were dabbled with and mutual funds were invested in – This was all critically done however through stockbrokers and financial advisers.
This advent of personal finance and gain through investment meant that many baby boomers are actually in a fantastic financial situation and have a lot of assets to leave future generations.
How was business and investment treated?
Aside from the financial gain, the baby boomer generation had a different outlook on finance and business. Financial information was harder to come by and if you wanted information about a business’s transactions, for example, you would have to contact them directly. Additionally, businesses themselves were more concerned with caring for shareholders than their customers. Shareholder value was paramount, often at the expense of service and ethical conduct. Finally, businesses would concentrate exclusively on marketing and sales whereas today, business is shifting towards a quality of service and customer care.
How will their financial gifts be received by future generations?
The baby boomer generation is set to leave a great deal to their children, that much is clear. Before the boom in housing prices, many families from this generation had already paid their mortgages and even profiteered by moving to larger premises. These assets can be transferred to future generations. Furthermore, investments that have been maturing for decades will have gone from strength to strength and should now amount to a sizable chunk of cash.
However, the finance has been gathered, careful consideration must be given to how it is transferred to ensure that the recipients receive the full intended amount.
How has financial management and business changed for millennials and future generations?
As we can see, perceptions and outlooks concerning finance have changed over the years. This will have an effect on how future generations will use and benefit from the gifts that the baby boomers will leave. It is important to consider the state of finance today and how current generations access, view and use their finances. First, you can now start investing in much smaller amounts called microinvesting. I use modern companies such as Betterment or Learnvest for diversification and investing needs. Join rebate and easy side hustle tools like Swagbucks to make hundreds of a dollars a month from the comfort of your home.
Twenty years ago, internet banking was unheard of. Today most people will have access to their finances online or through a few simple actions on their smartphone. Finance is hugely accessible and in the same instance, hugely spendable. You no longer have to go to an ATM to withdraw money – You can instead use your debit card. This gives millennials a greater amount of control and flexibility over their personal finances.
Accessibility of information
If a baby boomer wanted to invest in stocks and shares, they would have to consult a stockbroker. Today, you can simply log into a stock website and check the current fluctuating index values. Furthermore, business information and accounts are readily available; it is now easy to check the credibility of your potential investments. This should allow current generations to make informed financial decisions and use their money wisely. Read everyday and teach your kids that money doesn’t grow on trees.
Socially responsible investing
Past generations had a tendency to invest solely for profit. Business gave little thought to the social and environmental impacts. This was mainly due to the lack of available information. Today we are seeing a shift towards responsible investing – is the business operating with a minimal carbon footprint? Are they proving above average working conditions? We can expect future generations to continue this trend and to take a greater amount of consideration and responsibility when making financial decisions and investments.
Service is paramount
Whilst baby boomer businesses put an emphasis on providing value to shareholders, modern businesses have changed their ethos. Customers are now paramount and quality of service or goods is preferable. Providing a fantastic product or a first rate service is the norm and this, in turn, should organically create increase value for shareholders.
A lasting legacy that will have a profound effect on the future
It is clear that the baby boomer generation held a unique position in history. The financial gains and choices they made will have lasting effects on the generations of today. Current and future generations, however, will use their finances in a different way and have a different approach to money and business. This is a continual form of evolution that has been happening in society for years.
Millennials are today taking positions of power and using the knowledge the baby boomers passed on for their own development. Mix this with a more socially responsible outlook on finances and and things really are looking bright for the future. The baby boomer gift is a legacy that will help shape future generations.