Young adults now in the workforce, voting in elections and establishing families are part of the “Echo” generation. They are the children and grandchildren of the baby boomer generation and they are making their presence known in the economy.
Baby boomers, caught between working to support a family and caring for their aging parents, now have grown children taking a different view of family, work and their participation in society. While some 77 million were born in the ‘80s and ’90s, the biggest difference between them and their parents may be technology. With the advent of social networking, Facebook, LinkedIn, wireless web access and online video on their cell phone, the constraints of a physical home, community and town has greatly changed.
Today, 18- to 30-year-olds are more conservative with their money, and a larger number are now living back at home than ever before. For many this has affected their sense of security and optimism. The lessons from their grandparents are coming back to support their ideology: save, get value for your money, plan for the future, expect some hardships and give yourself time to overcome. They have tended not to live on debt like their parents did by using credit cards and equity loans on their home, if they own one. Cash advances, title loans, loyalty programs are more the norm now than it seems ever before. Recent Pew Research studies found that a third get financial support from families and only four in 10 work full-time jobs.
Now there is talk in the news about the legal requirement to own health insurance (like car insurance, not saying I agree), health-care exchanges where you will go to get your health insurance (with subsidies), the potential for Medicare and Social Security to either not be around for their retirement years or greatly changed and a $17 trillion federal debt, indicating a financial future for the country that has the potential for their children to be born with a $52,931.67 share of this debt before they have their first meal.
Opportunity for an advisor
So how does this offer opportunity for an advisor? We have to learn how to be engaged in generational marketing. We have to be able to break the different markets down, understand the dominant buying motives, look for predictable buying behaviors and understand how people spend their money on lifestyle issues.