If there’s any market trend that you should be paying attention to right now, it’s people. Not stocks, not even real estate—but people. More specifically, demographics. Because, my friends, the marketplace consists of this incredibly strange species, humans, like you and I. And we make up the marketplace. By understanding people and what’s important to them right now, we can stay on top of opportunities in the decades to come.
“Demographics” refers specifically to different groups of people, which I think is the key to understanding the market. A common demographic is generational, like the distinctions between baby boomers and millennials. Demographics are spoken about ad nauseum at marketing conferences, presentations, and the like. Yet there really is much to glean about future opportunities by studying them—more than just differences in values and beliefs.
Let’s break down the differences between these generations, and the opportunities for each.
Also referred to as the pre-war generation, or the Greatest Generation, these are the people who are in their golden years. They were born before 1946, and represent a dwindling population.
Most are retired, and many are in communities together.
2. Baby Boomers
The baby boom came after World War II, when soldiers returned home and started their families. One of the largest generations in history, they were born between 1946-1964. To this day there are still 76 million baby boomers, and such a large demographic has deeply affected all aspects of the economy.
To add a little humor, when many of the male baby boomers were hitting their middle age (or midlife crises), we saw the largest recorded spike in purchases of Harley Davidsons, Lamborghinis, Porsches, and other fast cars.
Now, as they near retirement age, there will be a huge demand for assisted living facilities, retirement communities, and more. Many investors have already positioned themselves in the service of the baby boom generation.
3. Gen X
This is the “silent generation,” of which I am a member. This group was born between 1965-1980. There are differing timeframes depending on where you do your research, but this one seemed most accurate to me. This is a smaller generation of about 66 million.
We grew up with less supervision than the other generations, and are often conflated with the baby boom. Gen Xers are in the prime of their careers, and on the older end of the spectrum have children in high school, college, or beyond.
After Gen X, you have millennials, the next largest generation after the baby boomers, were born from 1981-1996. Today there are around 70 million. Everyone in marketing has heard of and talks about millennials. They’ve already had a huge impact on the nation and world, and will continue to do so.
This is the young generation in the workforce, making their mark. Unlike older generations, they’re hitting different milestones of homeownership, family life, and more.
5. Gen Z
This generation is one that’s grown up almost completely immersed in modern technology. Born from 1997-2010, this demographic is actually much larger than the baby boomers at 86 million, and it’s important to understand how they’ll impact our world.
While most are college-aged or younger, their increased access and ability to navigate technology has made them more engaged in national discourse than previous generations.
Why It’s So Crucial
Each generation goes through the same life cycle, yet there are important cultural and economic differences to understand. In the 50s, when baby boomers were growing up, a record number of schools were built to meet that demand. In the 60s, when they began to drive, the country had its largest automobile sales ever. We’ve discussed the midlife crisis of the baby boomers, but before that there was a boom in the housing market.
These trends were not only dictated by where that generation was in their life cycle, but where they worked, where they lived, and what was happening in the nation. Currently, the US is seeing massive migrations around the country, and it’s important to analyze why. Are there more jobs? Is it more affordable? What is attracting particular demographics and why?
Then within those demographics, consider these questions:
- Are they renting or buying?
- Do they travel frequently? Do they do so alone or in groups?
- Do they own cars? Are they utilizing ride-sharing?
- How do they communicate?
- How do they address their health?
- Where does their money go?
All of these questions will give you further insight in where to invest and how to make smart plans. If you’re really innovative, these questions may even help you revolutionize these sectors of their lives.
Each generation faces different challenges and lives differently than those before and after them. If you can understand how and why, you can be ahead of the curve when it comes to solving their problems. Take care of your fellow human beings by assessing their needs.
You can listen to my new podcast, Cashflow Investing Secrets here.
Live your Freedom, Live Your Legacy, On Your Own Terms,
M.C. Laubscher is a husband, dad, podcaster & Cashflow Specialist. He helps business owners and investors create, recover, warehouse & multiply cashflow. You can learn more about exclusive cash flow strategies in M.C.’s new video series at https://www.yourownbankingsystem.com/
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