Littlejohn Financial

Generational Money Perspectives

Financial Podcast by Financial Advisors

In this video, we’ll explore how different generations view and manage money based on their historical experiences. From The Silent Generation to Gen Z, we’ll discuss the unique perspectives each generation brings to money management. 

In this episode, you will learn the following :

  • Generational wealth dynamics are examined, exploring how historical events have influenced spending and saving patterns.
  • Silent Generation is known for thriftiness due to experiences like the Great Depression and World War II.
  • Baby Boomers, growing up in economic prosperity, inherited financial discipline from the Silent Generation.
  • Generation X faces the challenge of supporting both aging parents and children, resulting in the highest spending on necessities.
  • Millennials prioritize experiences over possessions and have been shaped by the Dotcom Bubble and the Great Recession leading to cautious investing.
  • Generation Z  exhibits entrepreneurial spirit and risk-taking but also faces unique financial challenges due to digitally-focused upbringing and recent global crises.
  • The importance of adapting spending habits to the current economic landscape and preparing for the future, regardless of generational influences.

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TRANSCRIPT

 

00:00:00 I think that speaks a lot, maybe to some of the inflation that we’re seeing when the top three expenses are really, kind of, stuff you need more than, want. Whereas the millennials might be on the opposite end of that spectrum, that travel, that leisure, that experience isn’t necessarily a want, it’s more of a need. And so both these generations are spending, but they’re spending in different ways.

 

00:00:00 What’s going on everybody? This is Matt Dickson and with me in studio today. 

 

00:00:37 [Justin Bragerman]. 

 

00:00:38 You guys are listening to the True Wealth Radio Show where we are bringing you guys an awesome show today. Justin, this one was your kind of brainchild today. And I really am looking forward to seeing what you’ve got for us. Do you want to talk a little bit about today’s show and kind of what listeners might have in store? 

 

00:01:00 Yeah, well, we can definitely get into that. But first, we should probably… The deadline is coming up. 

 

00:01:07 Oh, what deadline are you referencing? 

 

00:01:11 Tax deadline. Is it Monday? 

 

00:01:14 Man, what day is the 15th? 

 

00:01:15 The 15th, I don’t know what day it is. 

 

00:01:16 Yeah, that’s coming up pretty quick. I think that is a Monday. 

 

00:01:19 Yes. And so, any IRA or Roth IRA contributions that need, want to be made, need to be done prior to Monday. 

 

00:01:29 Yeah, let’s try and get it done this week so that we’re not stressing out over the weekend or pushing things out to a Monday. Let’s try and get that done this week. So that’s a good friendly reminder. 

 

00:01:41 Yes. 

 

00:01:41 You need to fund a retirement account. This is kind of–

 

00:01:45 The IRAs and the max contribution that you can do, is $6,500 in 2023, unless you’re over 50, then it’s another thousand dollars for a total of $7,500. 

 

00:01:57 Okay, well, there it is. Is that all we’ve got for people? 

 

00:02:03 That’s the big update. I mean, the limits change next year, but, you know–

 

00:02:07 Yeah. 

 

00:02:08 That we can–

 

00:02:08 I feel like that’s a pretty fair update for everyone. But what about the main meat of the show today? What do you got on your mind? 

 

00:02:15 So we deal with this all the time, but we don’t necessarily compartmentalize it, I guess you could call it as different generations have different habits. 

 

00:02:25 Okay. 

 

00:02:26 And I don’t know what even sprung me even looking at this and it got me thinking of the different spending habits by generation and how they change and what events they kind of went through that kind of molded those changes. And so, it just got me thinking, is I wonder what the pros and cons they consider each generation? 

 

00:02:50 As far as spinning and saving habits go based on, kind of, what age bracket you’re in. 

 

00:02:56 Right. 

 

00:02:56 Because I mean, I’d venture to say that, you know, if you are part of that, like I think the silent generation, right, that was somewhere in the 20s to the 40s. If you’re part of that generation, you might have a very different approach to spending and saving compared to someone who’s a Gen Z.

 

00:03:15 Right.

 

00:03:15 You know, person who’s just kind of getting started on their financial journey. So I think this is definitely worth kind of walking through because as we look at spending and saving habits by, you know, generation, I think it might awaken people to maybe some of the areas that they are strong in versus where they’re weak in and kind of open up some conversation.

 

00:03:39 Open up a little bit of understanding of the differences.

 

00:03:44 Right. 

 

00:03:44 Which I mean, full disclosure, people can possess all these qualities no matter what age you are. 

 

00:03:50 Right. So, yeah. 

 

00:03:52 So.

 

00:03:52 It’s not an end all be all list, but you know, there’s a lot of events, I think, that have transpired over the years that have been part of the reason for certain generations being kind of the way that they are. 

 

00:04:04 Right.

 

00:04:05 Right. Like, you know, if you want to kind of start with the silent generation that, you know, we just mentioned that kind of, what was it, 1928 to like 1945, somewhere in that range. You gotta think, there was some stuff that that generation went through that–

 

00:04:22 A major thing. 

 

00:04:23 Yeah. 

 

00:04:24 I mean, when you look back at the Great Depression, that went from 1929 to 1930. 

 

00:04:31 Right, and you know, I think about, like my grandpa, for example, he was born in 1933. So that places him smack dab in the middle of this generation where it’s like, hey, you might’ve been pretty young, but you lived through the Great Depression. You know what that’s like. And you know, an economic downturn like that, where you’re, you know, most people at least, were dealing with extreme poverty and financial hardship. 

 

00:05:00 For an extended period of time. 

 

00:05:02 Yeah. That, like my grandpa grew up on a cotton farm in Arkansas. Right. And you know, I’ve heard the stories of, well, we didn’t have running water, so you had to go get the water. And back then, you know, you got a lot of siblings most of the time. And so that resource of food, clothing, shoes, everything was pretty scarce. And you’re doing everything you can to make ends meet. And when you grow up in a cycle like that, I think it tends to shift your attitude towards, we need to save and be responsible with what we have. 

 

00:05:41 Right.

 

00:05:42 And there’s also another, and this wasn’t even something that we kind of wrote down or came up with, but I’ve noticed this a lot, especially from people during that generation. There’s a desire to hold onto stuff because when you don’t grow up with anything, you reuse and recycle, you upcycle everything, right? And I love that because my grandpa is part of that, right?

 

00:06:07 Right.

 

00:06:07 He always has the thing that you need. Like the stores can be closed and you have like a electrical outlet that goes out or whatever. 

 

00:06:16 Right.

 

00:06:17 Like you can call him and he’ll have an outlet sitting in a drawer somewhere and he knows where everything is. So super resourceful, especially, you know, for someone like myself. So I appreciate that generation. 

 

00:06:29 I mean, going through the Great Depression and World War II, you know, is all in that same generation. 

 

00:06:35 Yeah.

 

00:06:36 And which, it does develop, you know, the financial stability, you know, being frugal with their spending habits and knowing how to stretch [inaudible]. 

 

00:06:50 Right. And I think homeownership is a big piece of that generation’s kind of legacy. You think back to housing, it was, you know, by the numbers, a lot more affordable during that time frame. Land was being developed at a rapid rate and the land costs were pretty low. Maybe some of the red tape and development costs might have been a little bit lower too. 

 

00:07:12 Right.

 

00:07:14 And just you look at the inflation adjustment to today’s dollars and it’s crazy. We know that real estate was cheaper back then. And so a lot of that generation is really deeply rooted in home ownership. And a lot of people kind of, I feel like kind of got into the rental game that way too, is as you know, you pay off your house and you’re looking for another investment opportunity. Real estate was a big one. And so I think that generation is also, you know, kind of big into the rentals. 

 

00:07:51 So that would be, I guess, what we consider the pros. 

 

00:07:55 Right. 

 

00:07:56 Some of the cons.

 

00:07:58 Talk to me about them. What are some of the areas where that silent generation, maybe struggles in? 

 

00:08:03 Which I feel like some people will fall into all these. 

 

00:08:05 No, this is painting with a broad brush. 

 

00:08:08 Resistance to change. 

 

00:08:10 Okay. 

 

00:08:12 Especially with technology and financial systems. I mean, it was very different. 

 

00:08:18 Well, yeah, because you gotta think, the year 2000 rolls around, for example. This generation at that time frame, probably around 70 years old or approaching 70, late 60s approaching 70. That’s when the technology boom got real serious, right? Like everyone could figure out a flip phone, open it up, you know, type in a number. Technology, even in their 70s, wasn’t a huge cornerstone of society. Yeah, we had our television and stuff, but the internet wasn’t like on your phone and your iPad the same way that it is today. 

 

00:08:57 Right. 

 

00:08:57 And so, like you said, I think that is, one area where that generation might struggle a little bit is just adapting to technology and learning how to use it for sure. 

 

00:09:09 Yeah. And then the other was just limited retirement planning and wasn’t even limited access. 

 

00:09:16 Can you like, expand a little bit? 

 

00:09:18 Think about how quickly you can get information now that you didn’t know. 

 

00:09:21 Sure. Right. You’re a Google search away. 

 

00:09:24 Right. 

 

00:09:24 Mm-hmm. 

 

00:09:25 And so which lot of that generation, you know in quotes pretty much is they did a great job of saving.

 

00:09:33 Right.

 

00:09:33 And then they had no plan for the–

 

00:09:36 What to do with the resources that they had?

 

00:09:37 Right.

 

00:09:38 Well, you even think about the stock market, right? They remember the days where you could have ownership of a stock on paper not that you can’t today, but like, there were like stock certificates, right? Like this was on paper. This wasn’t just a click of a button. I owned something new and I just sold something. So it’s just a really different world that we’re living in. And sure, a lot of that generation has evolved and changed with the times, but it might be more difficult than a generation that’s maybe born in the 60s or 80s or somewhere in that range. So healthcare though, that’s another big one. I mean, healthcare costs, especially for people who in that generation weren’t really preparing financially the way others might have. Healthcare costs have gotten really expensive and that can be a really big financial burden in today’s society. 

 

00:10:35 And it is for all generations. 

 

00:10:38 Right. So that’s one, that’s a blanketing statement. Like we’re all kind of struggling with healthcare costs. 

 

00:10:45 So should we move to baby boomers?

 

00:10:47 You know, let’s do it. We gave, silent generation their shout out. What about the boomers? What do you know, Justin? 

 

00:10:54 This is the post-World War II, hence the name, baby boomers. 

 

00:11:00 Right. 

 

00:11:01 And they went through the period of rapid economic growth, industrialization, suburbanization in many Western countries. 

 

00:11:11 Right. 

 

00:11:12 And then fueled by government spending, technology advancements, and increased consumer demand. 

 

00:11:18 I think that–

 

00:11:18 People were spending more money. 

 

00:11:19 Right. And the baby boomer generation gets the bad rap on that. Right. That’s when the spending just went through the roof. And I think there’s this kind of blame shift that I’ve seen recently where everyone’s kind of pointing the fingers and being like, thanks for all of the, you know, the debt. And then they point to that generation. 

 

00:11:42 I think they blame the millennials more than that, but–

 

00:11:45 Yeah. Maybe, maybe. 

 

00:11:48 But they… was a generation which they were brought up by the silent generation through the Great Depression. So they still have a lot of this strong–

 

00:11:59 That financial stability. 

 

00:12:00 The stability is how to stretch a dollar, be disciplined. 

 

00:12:04 A little bit more innovation kind of crept into that generation. Yeah. 

 

00:12:08 Yeah, for sure. They often possessed a lot of assets, a lot of home equity retirement savings just because that’s how they were brought up. 

 

00:12:18 Right. Yeah. And you know, you think about kind of just their habits. I think they kind of, that generation tends to be pretty loyal. And like they kind of trust the brand I’ve noticed too, where it’s like, well, this is my thing and I stick with it because I know it, I like it and I’m loyal to it. And I think that’s kind of a cornerstone of that generation as well. 

 

00:12:42 And then, you know, some of the, a little bit of maybe cons, I guess you could go through, is, they tend to be more conservative which can be–

 

00:12:53 In what way just kind of, just across the board.

 

00:12:55 Investments wise. 

 

00:12:55 Yeah.

 

00:12:56 Yeah, so it can be that they’re not willing to take the risk that could maximize their return. 

 

00:13:04 Sure. 

 

00:13:05 And so that, which it can and cannot be a con, so they’re not taking unnecessary risk, but maybe not enough risk to say, I’ll pass outpace inflation or something like that. 

 

00:13:17 Yeah, that generation, I think too. I know this is painting with a broad brush, but they’re kind of reluctant on some of the discretionary spending, right? Because they tend to be savers more than spenders. They have a hard time sometimes going out and just saying, you know what, I’m gonna treat myself, I’m gonna do this thing, I’m going to reward myself for all this hard work. And so, this is a hard working generation. 

 

00:13:47 Yeah.

 

00:13:47 And they’re the type that put their boots on, get to work, work hard, save, take care of their family. But oftentimes it’s a struggle to step back and say, all right, let’s reward myself. 

 

00:14:01 Right, and discretionary spending boosts economic growth. 

 

00:14:06 Right. Yeah. You have all the money, but you keep it in your pocket and it kind of stalls the economy a little bit. Yes. That’s an interesting one. Well, Justin, we’re running long on this segment. So we’ve got a lot more generational stuff to cover, but let’s take it. I’m seeing profit break. All right, everybody. Welcome back to the True Wealth Radio Show, where we hope you are having an awesome start to your week. It’s a great Tuesday, Justin. We left our listeners off kind of talking about all these different generations – their spending habits, their saving habits. Hopefully you’re over there like, hey, that’s me. But, you know, I’ve got an interesting one for you. When we left off, we had already covered the silent generation, the baby boomers. We’re getting into some of these other generations. I want you to take a guess at what generation out of all of these generations is spending the most amount of money per year. So average expenses, how much money is going out the door and what generation is the big spender? 

 

00:15:14 Well, I don’t remember the number, but I remember you telling. 

 

00:15:18 No, granted, these numbers are dating back to 2021. So it’s been three years, but. 

 

00:15:23 So, and I would assume it’s the Gen X. So the born between 1965 and 1980. 

 

00:15:29 You are correct. Gen X. So if you were born between 1965 and 1980-ish, in that range you fall into this generation, you’ve been nicknamed the sandwich generation. You wanna know why? Because of the fact that you’re sandwiched oftentimes in between supporting both aging parents and your kids. So this generation is known for that. You’ve got your baby boomer parents who you might be needing to help out. But you’ve also got kids that are maybe in college or struggling and not able to move out of your house for whatever reason or whatever the case. 

 

00:16:10 Stuff got too expensive. 

 

00:16:11 Yeah, exactly. So you are helping both sides of the family out financially. 

 

00:16:17 Right. 

 

00:16:17 Oftentimes. And this generation is spending the most amount of money per year. You want to take a guess at what that annual expense was in 2021?

 

00:16:30 Oh, 70, 70,000. 

 

00:16:33 It’s actually in the eighties. 

 

00:16:35 Oh, wow. 

 

00:16:35 Back in 2021, before this huge inflationary run, they were spending an average of $83,000 a year. You compare that to the next highest spending generation, which is, any guess? 

 

00:16:50 Oh, we already kind of went back through and said that the baby boomers were a little not learning to spend. So millennials, that will go with that. 

 

00:16:56 Good guess, it is. It is millennials. They’re spending an average of $69,000 a year. But that’s a pretty big gap, going from 83,000 down to 69,000 as the next largest spending generation. I would have not guessed that. I would have guessed that it would have been the baby boomers that are spending more than the millennials. But when I see the numbers on paper, it actually makes more sense because you look at spending habits, millennials are really, I know I’m jumping out of order here. Millennials are really known for wanting to chase an experience rather than save for their future. And–

 

00:17:34 Instant gratification. 

 

00:17:35 It’s an instant gratification group. Yeah, it is. And so we are watching millennials spend at a very alarming rate compared to their, you know, their ratio of savings. 

 

00:17:48 It’s a little bit of the cycle just of the life that they’re going through. So.

 

00:17:52 Chasing that Instagram image. 

 

00:17:54 Well, you know, it’s even like the baby boomers typically, which again, this is completely. 

 

00:18:01 Right. Generalizing.

 

00:18:03 You, generalizing. 

 

00:18:03 It’s okay. 

 

00:18:04 Typically had children at younger ages. 

 

00:18:07 Okay. Right. 

 

00:18:08 And the millennial generation tend to wait longer in life. And so what’s the reasoning for spending? Kids. 

 

00:18:20 Mm hmm. Well, that’s true. Yeah.

 

00:18:22 And so, and by delaying, you know, and then people of the, you know, Gen X generation are probably in there, what would you call that, between 45 and 60, I don’t know the actual number on it, is, you know, they’re taking care of both and then they had kids younger and then the millennial generation waited. And so it just kind of, has this kind of crossed of where your kid’s at and where your stage is at in life and where you spend the most money. 

 

00:18:52 Right. You know, going back to Gen X a little bit, we were kind of chatting about, you know, how they operate, what their expenses look like. It’s interesting when you start breaking it down by category though, because you would think that a lot of that is, a lot of their spending is just on stuff, right? 

 

00:19:11 Right. 

 

00:19:12 Like real discretionary type things, but when you break down the top three categories, it’s surprising a little bit, Housing.

 

00:19:19 Housing.

 

00:19:20 Healthcare and insurance. So you look at that and you’re like, wait a minute, where’s that money going? It’s kind of the stuff that you got, like you need housing, right? Like you need healthcare and you need insurance in case stuff goes wrong. So I think that speaks a lot, maybe to some of the inflation that we’re seeing when the top three expenses are really, kind of, stuff you need more than want. Whereas the millennials might be on the opposite end of that spectrum, that travel, that leisure, that experience isn’t necessarily a want, it’s more of a need. And so both these, you know, both these generations are spending, but they’re spending in different ways. So it’s kind of an interesting comparison. 

 

00:20:04 So they consider, they, “Gen X” is the most well-rounded approach to spending and saving. 

 

00:20:14 But that makes sense. It’s interesting, you look at that silent generation and the further we get away from it, you watch the behavior drift radically in the opposite direction, right? It went from ultra conservative, saving a ton of money to the baby boomers that were kind of, they were still big time savers and we’re seeing that right now with their spending being low. But they were a little bit more aggressive in their spending because of, you know, we saw that with the national debt and everything–

 

00:20:44 Right.

 

00:20:45 Rose during that time But then Gen X comes in, they’re the biggest spenders and Millennials are right on their heels, right? You also got a–

 

00:20:53 Catch them in no time.

 

00:20:54 If the Millennials were making more money–

 

00:20:56 Right.

 

00:20:58 Maybe they would actually outpace, on spending so we have shifted from a generation or like a country I guess of savers and fiscally responsible people to more of a YOLO type mentality where it’s like, well, you only live once, let’s blow through this money. And that makes me nervous, especially as a financial advisor, right? Who’s looking at this and saying, like, how do we structure things for the future? And then you see kind of an unraveling of that behavior of being an investor and more of a spender.

 

00:21:34 And it really kind of translates to, is the events that happened during those. 

 

00:21:40 Yeah, we should talk more about that. I mean, we talked about the Great Depression for the silent generation. We talked about a little bit of that World War II economic boom that caused some of that spending for the baby boomers. We didn’t actually talk about the kind of stagflation and the oil crisis that was happening in the 70s, because that actually really did shift some of the behavior, I think, for that boomer generation.

 

00:22:04 Right.

 

00:22:04 Where you’re looking at really high inflation rates, like I mean inflation in the 70s was wild and they lived through that. 

 

00:22:12 We’re seeing it again. 

 

00:22:13 Yeah and that impacted a lot of different areas, like I mean the job markets, the wages, consumer spending. So that did play a huge role for the baby boomer generation, but I think we’ve mainly been focusing about Gen X. You want to talk about maybe some of the stuff that was happening during that generation that would have impacted maybe some of the ways that that generation approaches money? 

 

00:22:38 Yeah, October 19th, 1987. 

 

00:22:41 What happened on that day? 

 

00:22:43 The Dow fell 22% in one day. 

 

00:22:48 You and I are over here freaking out any day that the market’s down two or 3%. We’re like, what just happened? I can’t even imagine going through that.

 

00:23:00 Which, it didn’t trigger a recession.

 

00:23:04 No? 

 

00:23:05 It was a short term event, which I don’t even… I mean, I was literally 40 days old at this point or something like that. So I was not there for it. I’ve read about it.

 

00:23:17 But it shakes your confidence as an investor, right? Like everything that you’ve seen and known, you know, is relatively decent up until the point, to where you check your portfolio, you wake up and you’re like, why do I have 20 something percent less money today?

 

00:23:33 Yeah. 

 

00:23:33 So that actually, you know, trauma, a big event like that can really shape and affect how you operate moving forward. And, you know, maybe it did cause some people in that generation to say, I don’t trust it. 

 

00:23:48 A little bit of gunshot. 

 

00:23:50 Yeah. Maybe I’m going to invest in other asset classes or maybe I’m not going to invest at all. Maybe I’m going to scale this thing back and spend a little bit more. 

 

00:23:57 Right. 

 

00:23:58 Interesting.

 

00:23:59 You know, then the savings and loan crisis in the 80s and 90s, you know, collapsing and some savings and loan associations. 

 

00:24:07 Mm-hmm. 

 

00:24:07 Which government bailout, which sounds familiar. 

 

00:24:10 The bailing out. So, yeah. A-ha. But–

 

00:24:15 Yeah. 

 

00:24:16 Yeah. And I mean, we saw a little bit of shakeup in confidence in banks. I mean, you just kind of hinted at it when we had a couple of banks collapse here recently within the last two years. What, has it been two years? Is it three? Silicon, I mean, wasn’t it Silicon Valley Bank? I don’t remember the date. It’s been, you know, a little while now, but I remember talking with people even right after that happened. And even though it was just a bank or two, there was a lot of people saying, hey–

 

00:24:43 Yeah, a lot of people panic. 

 

00:24:44 I don’t, you start hearing the conversation of gold, right? And so, yeah, these types of events make a really big difference in how people feel about investing. 

 

00:24:56 Yeah.

 

00:24:57 So it’s definitely worth it. 

 

00:24:59 Especially now, because I mean, the Gen X generation where they’re aged, at now, they’re at the peak earning year. I mean, they’ve got the 30. 

 

00:25:10 The 20, 30 years experience, they can demand that higher wage. And with that does come some extra spending. The whole expression of like, you spend what you make. 

 

00:25:20 Yeah.

 

00:25:21 It’s real for most people. 

 

00:25:23 It is a very hard thing when you get raises and things like that, just to not spend that and beyond. You know, we try to even, try to create, kind of the habit is if you get a raise, take a portion of that and save it. 

 

00:25:39 Right. 

 

00:25:39 Because if you don’t, if you’re not used to it in your lifestyle, then you may not spend it. So, it increases your savings rate and increases an emergency fund for when stuff does go south. And that Gen X generation is in the suites. 

 

00:25:58 I got an interesting one for you.

 

00:25:59 Okay. 

 

00:25:59 We, I mean, we talked about the top three categories for Gen X. 

 

00:26:03 Yeah.

 

00:26:03 Where are they spending it? We talked about… housing was in the top three. You would, the total percentage of your income that you’re spending on housing, so Gen X is spending 31.7 percent of their total budget on housing, which, that seems actually kind of high. 

 

00:26:22 I think that would actually be considered kind of–

 

00:26:25 Low.

 

00:26:26 Like lending average. 

 

00:26:27 Okay, right.

 

00:26:28 It’s typically between 30 and 35%, I believe. 

 

00:26:30 Right, so, and I bring this up to say, out of all of the generations, even though they’re in the top three, right? Like if you look at the categories, that’s housing’s top three. Other generations, all of them are spending a higher percentage on housing than Gen X. Gen X is actually at the lowest percentage. But I think– 

 

00:26:52 ‘Cause their income’s the highest. 

 

00:26:54 Because their income is the highest. You know what? Generation’s actually getting hit the hardest. 

 

00:26:59 Probably the newest, whatever they call it.

 

00:27:00 You would think it would be Gen Z. 

 

00:27:02 Okay.

 

00:27:02 And I would have assumed that. But slightly edging them out is the silent generation. And I think it makes sense when you really break it down because inflation like, back then if you’re earning a dollar an hour or two dollars an hour as a wage, right? It’s really hard to compensate for what they’re having to spend now adjusting that. They’re at 37.3. 

 

00:27:30 Wow. 

 

00:27:31 So, and Gen Z is at 37.1. So basically a tie, but the silent generation, still struggling even more than Gen Z when it comes to percentage of expense towards housing. Very, very interesting stuff. 

 

00:27:46 I think the Silent Generation is due for a break. They’ve been through a lot. 

 

00:27:50 They have. And then, you know, I love these categories because it really tells a story. But if you look at entertainment, Baby Boomers and Gen X are actually spending the most on entertainment. That’s a percentage. That’s wild. 

 

00:28:06 That is. 

 

00:28:06 So spending is starting to shift for these generations. So when we get back, we’re going to start talking a little bit more about those millennials. Alright, everybody, we are back from the break and we are talking about all these different generations, spending habits, good habits, bad habits and everything in between. Justin, we left off intro-ing the millennials, to which we kind of fall into this category.

 

00:28:34 We most definitely by definition fall into this category. 

 

00:28:37 By, yeah, by age range we do, but maybe not by behavior. So like I said at the beginning of the show, we are painting with a very broad brush. So unfortunately we got to cover this generation. We’re lumped in there. So let’s break it down and talk about what this generation is up to. 

 

00:28:59  Well, why don’t we start with which, when we talk, talking about millennials, people born between 1981 and 1996. 

 

00:29:07 Okay. 

 

00:29:09 And what they… the events, financial events that happened during that same time period, the Dotcom Bubble from 2000, 2002. 

 

00:29:19 Yeah, the market lost so much so fast, right? Like everyone was investing in these internet-based companies and it didn’t really matter what your earnings were. Let’s just invest in it because the internet is the next big thing and it’s gonna take over everything. 

 

00:29:33 Right. 

 

00:29:34 There was a severe correction in the market during that time. So yeah, that’s a big one. 

 

00:29:41 The great recession, they call it from–

 

00:29:45 Basically the ‘08 housing crisis. Yeah. And well, housing collapsed, banks were kind of feeling it. Everything.

 

00:29:57 Yeah, bad lending.

 

00:29:58 Yeah, bad lending. It was a mess, right? That definitely changed the way a lot of millennials look, I think, at investing because think about it. 2008, I’m getting out of high school and graduating and going into college. How many people our age had a college savings account that might have been in the market and you are about to go to college and guess what? Your savings is wiped out. 

 

00:30:31 What’s really amazing though is how oblivious you were to it all. Because even, you think, is, I mean, 2000, 2007 to 2009. 

 

00:30:41 Right. 

 

00:30:42 I was in college studying finance. 

 

00:30:45 And you probably weren’t even–

 

00:30:46 And it still wasn’t even brought up during my classes, things like that. 

 

00:30:51 Yeah, they were just going to skip over it. 

 

00:30:53 Yeah.

 

00:30:53 Yeah.

 

00:30:53 It’s just, I swear it’s like they didn’t know what was going on. So, they’re just like, we just won’t talk about it for a while. 

 

00:30:58 Yeah, let that, let it ride into the history books before we touch the hot stove. Yeah. 

 

00:31:05 And it’s just this, you don’t know and when you’re kind of looking at these kind of age groups, there’s even, you know, we’re in this generation but you know, 2000, 2002, you only remember from what you’ve read, not even really what you’ve kind of gone through other than the new technology that was coming out. 

 

00:31:22 Right. Millennials got a really weird introduction into adulthood, right? Because we’re on the cusp of this huge technology boom. And I think we were the best positioned generation for it, because like we saw the tail end of not having that big technology piece. Like we grew up right in that sweet spot where it’s like, well, it doesn’t, like it’s not fully ingrained in our DNA. We didn’t grow up with an iPad. 

 

00:31:49 Right.

 

00:31:50 Like we grew up riding a bike and doing all the things that kids should be doing. 

 

00:31:55 And now I have to ask my 10 year old how to work an iPad. 

 

00:31:59 But the chances of you figuring it out if you want to, much greater chance than your parents just naturally figuring it out. So we really did–

 

00:32:08 Yeah, you embrace technology better. 

 

00:32:09 100%. And you look at kind of where the job market is, a lot of, some of those higher paying jobs are really focused in big tech, right? Not all of them, but that’s an area where, digital marketing, technology, all of those, kind of categories. It’s weird though, because you hear gig economy, terms like that get thrown out. The job market for millennials is, I feel like, different maybe than for prior generations, where it’s like, hey, you wanna come work at this startup company, we’re gonna pay you a ton of money, and a lot of turnover, a lot of trying to find your sweet spot, and why? Why is there such high competition there? I think you look at where wages are in comparison to where they were in the past. What does the dollar buy you for this generation? Not as much and housing is more expensive and your student loan debt is more expensive. And so you come out of school and maybe you have a lot of debt, maybe you know, you’re trying to buy a house, the wages aren’t there for it. So you see a lot of millennials maybe still or were at some point living with parents longer.

 

00:33:30 Right. 

 

00:33:31 A lot of different things, going on with that generation. 

 

00:33:35 And they tend to prioritize experience over–

 

00:33:38 Yeah.

 

00:33:38 Asset. 

 

00:33:39 Absolutely. 

 

00:33:40 Like it’s a bigger traveling social experience. 

 

00:33:46 This is where I point my finger at social media and I’m like, hey, be careful of that thing because it is designed in nature to make you look and say, well, look at what this other person is doing and look at all of these things that could be part of my life, but they’re not. 

 

00:34:03 Right. 

 

00:34:04 And that whole keeping up with the Joneses thing, I feel like for the millennials, is a very, very challenging obstacle. And you’ve got to really work hard to shift your mindset. Especially when all of your peers are doing the same thing. 

 

00:34:22 Right. 

 

00:34:23 All right, you know, so that’s a tough one. 

 

00:34:25 They’re considered to be more socially conscious and environmentally aware. 

 

00:34:29 Yeah. 

 

00:34:31 Which barf. We’re not. Yeah. 

 

00:34:33 Give me some mouthwash. 

 

00:34:36 Driving demand for ethical products and services, things like that. 

 

00:34:40 Yeah. They want to know the name of the cow that’s being served. You know, like what was the name of this cow that’s in front of me on my plate as a ribeye? And it’s like, oh gosh, please, please stop. 

 

00:34:53 I mean, a lot of the challenges in the millennial kind of generation, common ones, I guess, would be, you know, student loan debt, stagnant wages, is, there’s not enough, I guess individualization on some things, because everything’s done, technology. 

 

00:35:10 I look at it, is wage, are wages growing at the same rate as cost of living, right? Like are wages inflating with inflation? And if they’re not, there’s a pinch point. 

 

00:35:24 Yeah. 

 

00:35:25 Yeah. 

 

00:35:26 And it could even be the value of education, what it was 20 years, 30 years ago versus now. 

 

00:35:31 We did. No, I talk about this with friends all the time. And this is coming from someone who went to college, right? 

 

00:35:39 Yeah, me too. 

 

00:35:41 I look at it and I’m like, was it worth it? For what you spent, what did you get? And it’s my personal belief that it wasn’t. It wasn’t worth the spend. It wasn’t worth the four years that it took to get the degree where I could have been earning a wage. And I think it’s worth even less now than it was when I was in school because I look at the cost. I’ve done it. I’ve looked back and I’m like, well, I know what I paid. What is someone paying today? And I’m like, that’s crazy. Especially going straight to a four year university instead of using a community college to save money for half of it. I’m like, this doesn’t pencil. 

 

00:36:21 I did it one year and I came back. I’m like–

 

00:36:23 Did you? 

 

00:36:24 I can pay less like a quarter of the price. 

 

00:36:27 Yeah. You’re buying an experience if you get those four years straight out of the gate. Like I’m not going to sugarcoat it. You’re paying for an experience. 

 

00:36:34 Well, I mean, if you’re on scholarship, things like that. 

 

00:36:37 Yeah, there’s exceptions. You got a full ride to a four year university. Go do it. 

 

00:36:41 Yeah. 

 

00:36:41 Right. But–

 

00:36:42 Enjoy yourself. 

 

00:36:43 Yeah. Have fun. But man, oh, man. And I’m not even convinced that the quality of the education is any better, you know, because I can think back to, you know, going to a community college, right? I had maybe a class size of 20 to 30 people in it. And then I can think back to doing some entry level classes at the university where there’s 200. And I’m telling you–

 

00:37:04 In a stadium.

 

00:37:05 The education was more difficult at the community college, it was tougher. And they expected a lot more out of you. I’m just throwing the red flag on the four years. Like, hey, this is a money making scheme, but Justin, we’ve got one more generation left to cover, but we have to take our last obscene profit break. When we get back, we are going to cover Gen Z. All right, everybody, we are back and on the last leg of the True Wealth Radio Show where maybe we saved the best for last? I don’t know. 

 

00:37:38 Well, too early to tell. 

 

00:37:40 Yeah, exactly, because we’ve been talking about all these different generations and all the money spending habits. But we haven’t talked about everyone’s favorite topic right now, Gen Z. Justin, what, give me one thing that you want to say about Gen Z. What’s one thing you want to bring up? 

 

00:38:03 They’re growing up during an interesting time. 

 

00:38:07 Oh, yeah. 

 

00:38:08 I mean–

 

00:38:09 They grew, these are the tablet babies. They grew up on the tablet. 

 

00:38:13 Going from, you know, tablets was a new norm, even video game consoles, which is kind of funny. I’ve shown my son videos of, like what we used to play. And–

 

00:38:26 Are the–

 

00:38:26 Graphics are very different. 

 

00:38:28 Yeah.

 

00:38:28 From what they used to be. But we just, I mean, living through the COVID pandemic or growing up through that, because I mean, even the missed education that some of the kids have had. 

 

00:38:38 Oh, good point. 

 

00:38:39 And I mean, even right now, this is the year. The kids are graduating right now, missed their freshman year. 

 

00:38:45 Right. 

 

00:38:46 Pretty much. 

 

00:38:47 That’s wild to think about. Yeah. 

 

00:38:49 And so we don’t even know, really the effects that that has on yet until later. 

 

00:38:54 Oh, I’ll give Gen Z some credit because everyone wants to poke fun. I do think that this generation is really entrepreneurial. Like they are always looking to try and find an innovative way to make money or to maybe start their own kind of business or a gig, they’re willing to take risk.

 

00:39:16 Mm-hmm. Public risk.

 

00:39:18 Oh, yeah. It’s kind of like no shame. We don’t care if we fail. No one’s judging us. We’re just going to go do it. And we don’t care what anyone thinks. And there’s a lot of grit there. But I think on the flip side of that, you also got to look at the fact that with that is some negatives, right? Like I think that this generation has some limited financial experience and just maybe a lack of knowledge where they’re more susceptible to, you know, maybe some scams, making financial pitfalls. They have a lot of big ideas, but they don’t really know how to execute on it because they just were never taught, I think, in a lot of regard. And so a lot of big swings and big misses.

 

00:40:08 And a majority of their time is spent on electronics. 

 

00:40:13 Yeah. 

 

00:40:13 Which is a way to get, that puts you as a target for. 

 

00:40:18 Right. 

 

00:40:20 You know. 

 

00:40:20 Scams. 

 

00:40:21 Yeah.

 

00:40:21 I mean, there’s a lot of scams out there. And unfortunately, you look on the internet, how many times have you seen the get rich quick thing being advertised? And so, you know, you look at this generation and they’re chasing that. And I think the term passive income has been thrown around way too many times because I’ve heard so many Gen Z kids talking about, well, you know, I’m going to get rich and I’m going to do it this way and it’s going to be super passive and I’m not going to have to work very hard for it. 

 

00:40:50 Right.

 

00:40:51 It is kind of a lazy generation and I hate to throw rocks, but it’s like, but that’s what happens when you’re raised in front of a screen, right? Like look at the studies, like the amount of, like artificial kind of ADHD that I think is generated from those screens. You can look at the studies, you take the device away and you make them engage with other things. A lot of the times that reverses its course. And so when you have a generation that’s just so deep in the belly of the internet, the screens, the social media, the pressure from society to get somewhere.

 

00:41:32 Right.

 

00:41:32 And you know, you’ve got to figure out what you want to do and you got to do it now because if you don’t, you’re just not going to make it. There’s so much pressure on that generation that I think it’s really you know causing some issues. Anything else you want to kind of talk about as far as Gen Z is concerned? I mean, they’ve gone through some stuff. 

 

00:41:50 Yeah, it’s just–

 

00:41:50 They were on the coattails of that same financial crisis. 

 

00:41:54 Yeah.

 

00:41:55 That you know, we experienced in 2008. A lot of them faintly remember that, but I can think of one other big one that they went through. And you mentioned it already, COVID. COVID was, I mean, we look, look at the numbers. Depression was, you know, sky high. People were trapped indoors. They weren’t being able to compete in some of their sporting events at their schools. They weren’t around their friends. They were locked up. What a weird deal that they’re going through. 

 

00:42:24 It really is. And it’s just, we don’t know the effects of it. 

 

00:42:28 No, we don’t. 

 

00:42:29 And I mean, the one thing with, you know, the Gen Z generation especially is they are very tech savvy. 

 

00:42:36 They are. 

 

00:42:37 And they can get information moved from one place to another very quickly. That would take me a lot longer. 

 

00:42:42 Yeah. 

 

00:42:43 And so it’ll depend on how they kind of channel what information they’re looking for is asking the right questions and how to be financially stable later in life and learning from all the other generations because they’re still here. You know, there is still, the silent generation is still living. 

 

00:43:06 It spooks me how much Gen Z is going to be affected by AI. That’s the one, that’s the big question mark for me. As we kind of turn our brains off and turn ChatGPT on, what does that do? And is this generation able to overcome it? Because maybe they can, maybe they can be independent thinkers that vet that and say, Well, it said this, but I’m going to think through this and apply my own logic. Maybe they can’t break over that hurdle. I don’t know. Like you said, it’s too early to tell. But, you know, it will be interesting to see what the future holds. 

 

00:43:46 Yeah. And kind of the cons that they’re kind of going through is education costs. Extremely expensive. Job market, especially now, was they want, you know, they’re trying to, they want unemployment to increase. 

 

00:44:00 Right. 

 

00:44:01 These kids are trying to go in and get–

 

00:44:03. And a lot of these kids in that Gen Z bracket aren’t really willing to work. Right. And if they are, they really want a ton of money for their labor. It’s a weird concoction. But Justin, we’re running out of time. 

 

00:44:18 We are. Don’t forget, tax deadline. 

 

00:44:21 Tax deadline is coming up. Yeah.

 

00:44:22 April 15. 

 

00:44:23 And what if they want to get a hold of us? 

 

00:44:24 Yeah. You can give us a call, 541-375-0898.

 

00:44:29 Or.

 

00:44:29 Shoot us an email, info@littlejohnfs.com or just visit our website. 

 

00:44:36 Or walk in and say hi because that’s always fun too. So Little John Financial bringing you the show. We’re wrapping things up. Catch us next week at four o’clock here on 1240 and 93.9 FM. KQEN, have a great rest of your week.

 

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