It?s become accepted wisdom that the Boomer generation?s wretched excesses and the financial crises that followed have spoiled the financial and career prospects of the next generations, especially those born since the mid-to-late 1960s. Known variously as Generations X, Y, and Z?or Busters, Millennials and Digitals?these 20- to 40-somethings are said to be doomed to lives of under-achievement and financial uncertainty.
The Great Recession has taken its toll on everyone, but if I were advising an X, Y or Z, I would suggest that it may also have handed them a once-in-a-lifetime opportunity. What better time to get serious about saving for retirement or investing for the distant future than right after asset prices have been beaten down?
Has the American Dream really died, or is it possible that the inflated prosperity before the crash of the housing market was the aberration and now we are back to normal? Is it possible that the house that sold for a million in 2005 after a frenzied bidding war, but which no one wants today for half that, was never worth a million to begin with?
Instead of accepting the narrative that there is no hope and they should get used to it, I would advise Busters, Millennials and Digitals to double down on their futures. Not only is it not too late to save for the future, it may be the perfect moment to begin. That?s the lesson of history.
The argument for lowered expectations?a sick economy, bloated government, global economic storms, public disgust with Wall Street?will sound familiar to Boomers. The 1970s?when millions were graduating from high school and college and beginning their working careers?was defined by the Vietnam War, the Cold War, urban decay, rising crime rates, two oil shocks, crippling inflation, a deep recession, a go-nowhere stock market, crumbling auto and other manufacturing industries, official corruption at the highest levels, a bubble in markets for gold and art, inflated home values, and government deficits so onerous that the City of New York was at one point essentially bankrupt. This was the American Dream inherited by the Baby Boomers.
For those who lived through the 1970s, the future looked grim indeed?so grim that Business Week magazine ran a cover story in August 1979 entitled ?The Death of Equities.? The Dow Jones Industrial Average?the oldest and most commonly used marker for our relative financial health?had essentially gone nowhere for thirteen years. From a record high of 995 in 1966, when the Business Week article appeared, the Dow was treading water just below 900.
The writers argued that high inflation and Wall Street?s finagling and financial engineering of new, complex products had rendered stock investing irrelevant to the public. ?The U.S. economy probably has to regard the death of equities as a near-permanent condition?reversible some day, but not soon.?
Four years later, in December, 1982, the Dow Jones Industrial Average finally closed above the 1966 high and the reports of the death of equities turned out to be premature. With plenty of ups and downs along the way, …read more
Source: FULL ARTICLE at Forbes Markets