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Generational Juggernaut


 

What is a generation juggernaut? The definition of a juggernaut is an substantial and overwhelming force. So how does that apply to a generation? A generation that can overwhelm the economy is considered a juggernaut. Take the Baby Boomers (born 1946-1965), they are responsible for the largest economic boom on record, a huge generational juggernaut. With that in mind, I’ve been getting a lot of questions that can be answered by understanding generation juggernauts. Questions like, why is the rental market so hot right now, why are houses under $200,000 selling in less than 15 day, but houses over $800,000 are staying on the market up to 18 months, why are the car manufacturers and airlines making a comeback when they were failing 5-15 years ago. All of this can be be explained with generational economics. In the last 100 years or so, we had the Great Generation (born 1900-1925), the Silent Generation (born 1925-1945), the Baby Boomers, Generation X (born 1965-1983), and the Millennials (born 1983-2001), and with each generation we have seen a lot of change. We are going to focus on the Baby Boomers, Generation X (Gen X), and Millennials, as they are what make up most of the current economy, and what has shaped our economic climate. With 78 million people in the Baby Boomer generation, they outnumbered their parents in the Silent Generation by 18 million, causing the huge economic boom of between 1986 and 2006. People are in their prime for consumption between 40 and 60 years old, as they are trying to support families and prepare for retirement, and you can clearly see that the economic boom occurred as the Baby Boomer Generation was turning 40. The Baby Boomers started consuming at a rate like no one had ever seen, simply because there were so many of them. As we reached 2006 and 2007, and the Baby Boomers stopped consuming at such a fast rate, the economy suffered, because with only 45 million members, Gen X could not keep up. But even as the economy slowed, Gen X was still trying to consume and they were trying to provide for their kids, the Millennials. The Millennials are the largest generation to date, with 87 million members. This is almost double Gen X, and is going to create a huge boom, as they start reaching their 40s. So how can you prepare for the upcoming explosion that is going to happen to our economy? Well the good news is you have some time, the Millennials are going to be hitting their 40s in about 5 years, and the decades from 2020-2040 are going to be some of the most prosperous this country has ever seen. However, in the next five years you need to make sure you have eliminated your debt, increased your reserves, and that you have a plan. Once our economy starts growing, it is going to grow so fast, you won’t be able to keep ahold of it. The Millennials are going to create the best economy we have ever seen, and you have to be prepared for the generation juggernaut.

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About Jay Garvens

Standing at the intersection of our local real estate market and the nationwide financial industry, Jay Garvens gives you the complete picture of every story affecting today's mortgage market! From personal finances to the political decisions moving markets, tune in for a weekend dose of straight talk from Colorado's most candid mortgage industry commentator! Honest, unbiased, and always unpredictable, Jay explores every facet of today's mortgage industry with an approach that's refreshingly blunt and enormously entertaining!

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