Baby boomers are the generation of children born after the end of the second world war. The youngest baby boomer has just turned 50 and the oldest is nearly 70.
Usually most people think baby boomers don’t like spending too much money. Do you think this is true?
Below are 4 reasons we think baby boomers will be spending a lot more money than most people realise over the next 10 years.
The following information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
1. Sorry kids, no inheritance
If you are a child of baby boomers, this might come as a bit of a surprise.
Recent surveys show the majority of baby boomers would rather spend and enjoy their wealth than pass it on to their kids.
How much money do they have to spend?
An enormous amount. Baby boomers are already the richest part of the world population. For example, they own 65% of all net wealth in the US (Source: US Consumer Expenditure Survey).
Looking across the world baby boomers are estimated by Euromonitor to have $15 trillion of spending power by 2020. That’s nearly 10 times the size of Australia’s entire economy.
2. Worked hard, play hard
After years of hard work to reach financial security many baby boomers are now happy to spend on fun purchases. For example, a recent survey found about half of baby boomers drink more than 3 times a week and over half have taken 3 or more holidays in the past year.
Here are some more examples of baby boomers’ spending trends will which we think will keep growing:
- Luxury cars: Mercedes alone has sold 600,000 more vehicles globally in 2014 than in 2010. Since the average age of a Mercedes buyer in many markets is over 50 years old we think there might be a fair few baby boomers with a nice car in their garage.
- Cruising: The cruise industry has seen a 25% growth in passenger numbers since 2009. No doubt a lot of this is due to baby boomers since the average cruise customer is 49 years old.
3. Looking after themselves
More so than most other generations baby boomers know the importance of looking after their own health. As medical technology continues to advance there will be plenty more opportunities for baby boomers to spend money to stay healthy.
We think spending money on staying healthy is a given but what about spending money on looking healthy (or simply looking good)?
You probably know what we mean if you’ve seen a baby boomer walk out of OPSM with a new $400 or even $500 pair of branded prescription reading glasses. The “looking healthy” trend has only just started.
4. Better suited products and services
Many companies are now realising how important baby boomers are to their bottom line. As a result, they are developing products and services specifically for baby boomers.
For example house building companies in the UK are specifically building homes designed for baby boomers while leading cosmetic and fashion companies are hiring baby boomer celebrities to market their products.
We think as more products come on to the market specifically for baby boomers this will mean even more spending by baby boomers.
Where are we in this spending cycle?
We think this has just started since many companies have only recently realised how much spending power baby boomers really have.
Want to learn more? Sign up for free to learn more about investing in this trend based on the huge spending power of baby boomers. Also access investing insights and full list of companies in AtlasTrend’s Splurging Baby Boomers Fund.