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The Baby Boomer Effect

Let’s say the markets crash (which is still not the best word choice to use, by the way). Because after every so-called crash, the markets rally to epic proportions. Even the Great Depression saw a steady climb afterwards. All markets crash in all sectors, from real estate to corporate lending to consumer credit. This occurs because of overleveraging. Leverage is basically borrowing money to make money. The problem is that borrowing at extremely high levels is typically done in great market conditions. Meaning, the markets are doing well. Investors get too comfortable and start taking out loans. This works initially, until greed gets out of control. When markets begin to go too high, the smart investors become worried. When markets go too low, the smart investors rejoice. Our entire financial systems is overleveraged. The Feds are delaying rate hikes because of something hardly anyone is talking about: self-preservation! But self-preservation of whom? Great question... Baby Boomers! Baby Boomers dominate the workforce when it comes to top management positions, legacy systems in key places, and a plethora of other sectors. It is estimated that 10,000 Baby Boomers retire each day in the United States. There is no way the Feds are going to crash the markets too much because most of them are Baby Boomers, as well. Instead, you’re going to see sharp dips and rips, which is what we saw in March 2020. With so many retiring each day, there is a massive concern that the markets will eventually tank due to them leaving in droves. Why was there a hike in retirement age from 65 to 67? Was it done to buy time? Or was it done to move the goalpost? One of the top fears of retirees is that they may outlive their retirement funds. This is why it’s important to focus on the deep and important work of building a legacy. You must account for yourself, as well as generations that are not even here yet.


Written by: Eric White

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