Monday, March 18, 2024

Mark the Plumber On Success, Work and Early Retirement

The responses to the interview questions may not represent the views of The Echo Boom Bomb's author. These interviews are provided to inform readers of information from experts and provide these experts with a medium where they can answer questions without any content changes. All linked material to products in interviews such as books or videos are affiliated with the supported platforms, such as Amazon or others. To see the full list of interviews related to Echo Boomers, iGenZ or Automons, see the ending acknowledgements on this post.

Background

A few years ago, I visited a store to search for a pluming solution. I ran into Mark, who became an instant friend and we've stayed connected since then. Mark had already retired from being a plumber and is one of the few Millennials I ever met who dropped out of high school. One big difference with Mark that I shared with him was that he had much lower self-esteem than the average Millennial (a generation who were raised to think they were special). This actually worked to his advantage as you'll read and he and I both agree that his story shows that high self-esteem has little to do with success. Mark is a great guy, but he's not on social media because he doesn't think his life is that interesting to be on it. I love the self-honesty!

Had To Ask...

While many Millennials piled into college (about 40-45%), you dropped out of high school during your freshman year and became a plumber. When we first met, your story differed significantly from many Millennials. What made you decide to drop out of high school and become a plumber?

I'm the dumber kid of my family. My brothers and sisters are much smarter than I am. My mom made sure that I knew this growing up. She used to tell me all the time that I wasn't going to add up to much because I learned really slow. I would read for five minutes and get bored and I really struggled with memorization. I could repeat something a hundred times and still not remember it. Some of it is that my mom is right and I am kind of slow when it comes to information. Some of it is also I hate learning stuff I don't use. I still don't know why I had to learn how to diagram a sentence. I have never used that and will never use that. I almost feel like school was killing time.

Before my freshman year, my friend's dad was a plumber and ran his own business. I wanted to learn so I asked if he could teach me and I'd be willing to do whatever. He was more than willing to teach me and he even started paying me for helping with his projects. My freshman year of high school continued to bore me so I had to decide between continuing to learn things I didn't want to know or make money that I could use. I saw immediate use for the money I was making, but I still don't know why I had to learn all the nonsense in school. So I dropped out. At the time, my mom used it as proof that I would never make it in life. She even told me that I would eventually realize that I had made the wrong choice. I didn't care because school was so boring and to this day, I don't regret it because I don't see how people who went to finished high school and went to college made a better choice than I did.

We've overvalued education to a point that it's become oversaturated and pointless. Historically, many kids would have been done with education at 12 and started working. Once you dropped out of high school, how were you able to manage working while your mom didn't approve?

I kind of lucked out the first year because my mom enjoyed telling me I was dumb and it stopped there. Since my friend's dad lived in our neighborhood, I worked as much as I could. I managed to make a good amount of money my first year but the real success was the experience I gained. I tried learning everything I could and it paid off big. By the end of my first year, I was able to take on challenging commercial projects - those are where we make good money. He would show me how he worked on a problem and I would jump on it. I kept feeling like the more I could do, the more I could make.

That's when my mom tried getting in the way and stopping me from continuing. Looking back, it's clear to me that she got angry when I started to out-earn her plus some of her friends were making comments about her having a high school dropout. She didn't like that and she tried to force me to go back to school. I was going to return to school and the situation got really bad. At one point, she physically attacked me to where it became noticeable to everyone. At least my mom realized that she crossed a line, but my friend's dad stepped in at that point and I was able to live with him. I planned to move out as soon as I could, but he was great because he told me that it made more sense to live with them until I was ready to be on my own. That allowed me to save a lot of money. To this day, I am grateful to him because he is the biggest reason for my success and he thinks I've alwasy been an amazing worker.

Mentors are key. Plus, you were able to work when Millennials were in high school and then some Millennials went to college. They were delaying pay while you were earning it. How were you able to eventually go into business for yourself?

I worked under my dad's friend for about seven years and would take on as many project as possible. He paid me extremely well, but we had very few plumbers in our area and few wanted to become a plumber, so the abundance of work allowed him to retire early. He wanted more freedom to travel, so his final year, he taught me more about the business, marketing and tax side of things. In thinking about it now, it's funny how I learned all this information about managing money for taxes, inventory and other related expenses, but we never discussed this stuff in school. It's so weird. What do people even do with all the stuff they learn in school? I still don't know. Like, when am I going to diagram a sentence as an adult?

After that, I was one of the few plumbers in the area and the demand was crazy. There was more projects than I had time. I tried hiring others, but what a nightmare! You and I have talked about this, but Millennials have no work ethic. They would get hired, work the first day, then call in sick and I wouldn't hear from them after a week. It was crazy. What's odd is that many of them would end up working a job that paid less, but it was some desk job. I do not understand someone who wants to get paid to sit around.

I struggled with hiring people for a while and finally gave up and am glad I did. I had to be honest with myself about how much work I could do and would do because I know I wasn't going to have help. I set higher prices and started making money good money plus was able to eliminate the projects that couldn't pay as much as I wanted. I retired before I turned 29, but even now I take some projects that I either enjoy or pay a rate that I'm willing to work. The difference is that instead of working 70-80 hour work weeks, I work about 10 hours a week overall.

That's the part about your story that stuns our Millennial friends the most. They can't believe someone can retire at 29 without being a trust fund kid. I like to point out our friends that about a decade ago, I was speaking at a financial event and I asked the bankers in the room how many of them would be proud if their sons became plumbers or electricians. No one in the audience raised their hand. Yet all of them had used running water and electricity that day! Our generation (and iGenZ too), does not have any concept of what we're actually demanding daily versus what we're saying has value. This is the result - a job that's in a shortage even with high wages.

But you still have people who won't do the work even with high wages. I hired people who quit working and would go work for some other easier job making half the wages. It's like they prefer easy work even if the easy work doesn't pay much. I'll never forget this one guy I hired. He picked up what I taught him pretty quickly. But after a month, he didn't want to do the work anymore and he didn't show up or even call and say that he quit. I ran into him later and he told me he worked doing some security job where he'd sit at a desk all day. He made less than half what I was paying him, but he told me that his job was easier even when I asked him if he would want to come back and work. Most people didn't want to do the work and I discovered that I hated managing people.

What made me finally stop is I had a friend who was also struggling to hire people and one guy claimed that he was injured on the job and sued. That scared me because he had to go to court over the situation. Hiring people is a job in and of itself and I just didn't have time to do that plus balance work.

I'm lucky because when everyone needs a plumber and there aren't many plumbers, I could simply say no. In hindsight, that was a big part of how I was able to charge high prices and retire early. Even now, I can select the projects I want because there's still a shortage! Plus, I've worked with many people over the years who really value my work and know that I'll do well. Credibility is a big factor in plumbing.

Working in the right field was a big factor in your financial success. Saving money also sounds like it played a huge role in your financial success. What are some other things that played a role in your success?

When you work a lot, you save a lot because you don't have time to spend. Kind of the opposite of our friends who spent a year traveling and spent six figures doing so. I know they had fun, but now they feel like it set them back. I didn't have options like that because I had to work. I have been blessed with some great friends who pointed me to Dave Ramsey, so I was able to invest following his advice. At some point, you have to grow your wealth and I had enough saved early. Working many hours stops a lot of stupid financial decisions so that probably played the biggest role.

Now that I'm older, I think being single also did some as well. Plumbing is a mostly male profession and as I've met other plumbers, I've seen some nasty divorces. My friend's dad ended up going through one himself. To be honest with you, at one point I wanted to marry but I'm glad I never did. Many of my friends who didn't go to college are either divorced or their wives don't respect them at all. Maybe this bugs me because my mom always thought I was dumb, but I don't enjoy being around people who don't respect me as a person. Even when I've dated girls in the past, they would ask me what I really wanted to do, as if there was something wrong with plumbing. Or I've had girls who asked me if I would go back to school almost like they were saying there's something wrong with not graduating high school.

Women are generally more concerned with other people's perception than men. Add to that what Saint Paul says, "Knowledge puffeth up" so you get a person who thinks highly of themself and cares about other people's perceptions. Given that most Millennial women are highly educated, that's a very common combination.

All of my teachers in high school and junior high were all women and I don't think any of them thought I was very smart. I can remember a few who agreed with my mom in that they thought I was dumb. I don't think I was ever cut out for education because I'm a D or F student at best. I remember one teacher asking me that, "Do you want to be a D student the rest of your life?" But I also don't get what we were even learning most of the time or why I would care. Women seem to enjoy that more too, like all the girls in my class would answer the questions while I was wondering why did anyone care. Trivia bores the heck out of me.

It may be because I work with a lot of men that I don't really value or need to know things I don't need to know, if that makes sense. I can't think of any conversation I've had with other men in my work where random trivia came up. No offense to the men who are educated, but they're the only ones I know who sit around and talk about this stuff. I don't need to know that you can manufacture and ship good easier by the Rhine River than by wherever because I don't work in manufacturing and I don't plan to. It's not important. Men seem to only say what's necessary when I'm working whereas women share lots of details about whatever the situation is.

You highlight a big problem with modern education that's impacting male enrollments in education - too many women. That's part of why education has lost men and I've been warning institutions about this for a while. Men don't see male teachers and assume education isn't for them. Regardless, right now the blue collar world is great for men plus it's in high demand. Like you said, no one wants to do physical work anymore so you have little competition. What advice would you suggest for young men interested in blue collar fields?

Honestly, be willing to do the work. That's rare. There's probably a lot of people willing to show you how to do the work, but it's a waste of time to invest in someone who quits after a week or two. I have a lot of respect for people who hire people, but I would never go back to that. I hated it. I did work recently with a young man, but the big reason was that I didn't need to teach him much, I could just tell him what needed to be done and he would do it. That and he was the son of the business owner. Like I said about my friend's lawsuit, I wouldn't hire people because of all the legal stuff. Lawsuits are no joke.

Be enthusiastic about learning new things related to the job. It's so easy to each people something when they're excited about it. My friend's dad told me early on that I was extremely easy to teach because I wanted to learn. For me, I felt like plumbing was my only path to a good life so I had to learn it. I didn't have options. My brothers and sisters are much smarter than I am and have many options to succeed. I didn't! But now that I think about it, if you want to learn and show enthusiasm, you become easy to teach.

And you're still not on social media, so people can't find you anywhere?

You have to think your life is interesting to be on social media. I honestly don't get that stuff. I'm not a smart guy so anything I have to say or show isn't that interesting. Plus you know this - I'm a flesh-and-blood guy. All of you with your Facebook friends, not for me. People have to be present with me and can't take shortcuts if they want to hang out.

If you ever join, I'll be sure to add your information here.

Friday, March 1, 2024

Review

Coming soon

Quick Acknowledgement

A quick thank you to all the people I've spoken to over the past two decades - from the Silent Generation all the way to the AutoMons. It has been an absolute pleasure to meet everyone and hear your life story. I share more details on this thanks in the ending part of this post.

Terminology

Echo Boomer/Millennial/Generation Y 1981 - 1995. The term "echo boom" comes from the demographic observation that Echo Boomers are a massive generation in size, while Generation Y is the title because Echo Boomers follow Generation X. I generally tend to use Echo Boomer as the noun, Millennial as the adjective, and Generation Y as the title when talking about Echo Boomers - these individuals are all the same in terms of people born between 1981 and 1995 (you will see that I sometimes include 1980 in my posts). Unfortunately, I do not always do this consistently, so you will sometimes see Millennials as a noun. However, they are all the same.

iGenZ/Generation Z 1996 - 2010. This is the internet generation that follows Echo Boomers. As a generation they only know of a world with the internet. I call this generation iGenZ for this reason (shortened version of Internet Generation Z). I generally tend to use iGenZ as the noun and Generation Z as the title for this generation - these individuals are all the same in terms of people being born between 1996 and 2010. I do not share most of my research publicly on this generation as my predictions with Echo Boomers were extremely successful and I am replicating that success with iGenZ privately. Unlike Echo Boomers, my research with iGenZ has been global, mostly with Asian iGenZ.

AutoMons/Generation Alpha/Generation A 2011 - 2025. I refer to this generation as AutoMons (The Automation Monoculture Generation), as they were born in a world where significant automation will be the norm - 3d printing, artificial intelligence, etc. They also show early signs of shifting toward social monoculture, which is where I get the Mons in AutoMons.

Prediction: Education Bubble and Regret

I predicted that at least 25% of Echo Boomers would regret attending college and cautioned that Echo Boomers' stories about attending college might someday mirror what we heard during the housing bubble. At the time of this prediction, former Generations such as the Silent Generation, Baby Boomers and Generation X had less than 5% of their generational members regret attending college, so I had a lot of people argue that I was predicting a big shift. However, as of my research over the years of 2021 and 2022, 37% of Echo Boomers have told me that they regretted attending college. Let me repeat a point I made which we are now seeing:

The perception of education changes. Echo Boomers were inculcated with "get a degree" messages from everywhere. As Echo Boomers mature and make less money than they expected, they will communicate their disappointment with education to the next generation. Unless Echo Boomers look back on education with rose color glasses, the next generation will hold a different outlook on education than their parents.

In addition to the 37% of Echo Boomers who regret attending college, I found that almost one-third (33%) of Echo Boomers report being underemployed with a degree. Undermployment in this context either means they have a degree and no job or they have a degree but are only finding part time or internship work. On a related point here, the only educational path that is not in an education bubble (still!) is medicine.

Prediction: Healthcare

In the post Med School Blows Past the Education Bubble I remarked that medical school would blow past most college degrees since medical school was in a shortage and other degrees were not. This has held correct and in fact, medical wages have significantly outpaced other industries. Some doctors are now making more money than CEOs of medium to large sized companies - it's almost insane to see these wages until you realize the shortage in medicine. I also noted in the past that the USA graduates almost as many lawyers as doctors and lawyers keep trying to add complexity to the system, which has only increased costs. Finally, the anti-male sentiment in the USA has caught up with the country. Hard working young men do not enter medical school, nor want to. College is as anti-male as it comes and young men are wise to avoid American colleges (Chinese, Japanese, Russian, Indian and other colleges in Asia make much better places for young men to attend college).

Not only did my post age well in terms of how much money doctors make, it aged extremely well when you look at life expectancies of Americans: it's plummeting. Americans are dying faster and their healthcare costs are skyrocketing. I did warn you it was coming! Even the American Medical Association is forced to agree with what I cautioned (and note too that they're even talking about the extreme bureaucracy with examples such as "Physicians today, on average, spend about two hours on paperwork for every one hour we spend with patients").

Compared to Generation X, the Millennial generation has a higher suicide rate for both men and women when evaluating age-by-age comparisons of previous generations. As a generation, the data show that US born Echo Boomers will not outlive their parents.

Prediction: Millennial Women Will Make More Money

I predicted that Millennial women would make more money than Millennial men and this has held true as of my recent analysis in 2021. Some quick points on how I compared these differences: identical data points were compared (ie: comparing a female sales manager with 10 years of experience, a bachelor's degree and working in the same area as a male sales manager with 10 years of experience and a bachelor's degree), married Echo Boomers were deducted (see below point), and only data points that exist within a single context - for instance, if a Millennial male worked 3 jobs versus a Millennial female who worked 1, that's not the same context.

Summary of 2021 findings:

  • When comparing non-Married Millennial males and females using ceteris paribus factors, Millennial females make approximately 8% more than Millennial males.
  • Millennial males are more likely to work multiple jobs, but also more likely to not work at all - the bell curve is very broad when looking at work for Millennial men compared with Millennial females.
  • Over 32% of Echo Boomers own a home, most of this group is married/coupled Echo Boomers. In 2011, only 11% of Echo Boomers owned a home.
  • The 15% subset of Millennial males have done what I predicted in private discussions with financial executives. Those of you who attended those presentations should continue the suggestions. I do not and will not share pubicly these predictions, as I am continuing to invest in this area.

As a general point on why married Echo Boomers were excluded (and should be): in many married couples, one person will work more while the other may work either less or not at all "officially" - this latter point being important. Consider that a married partner who does not work still can add significant value by extending the value of the income of their partner. For an example, a stay-at-home wife may be able to leverage her husband's income by taking advantage of opportunities and sales that people who work regularly cannot take advantage of, such as buying toilet paper cheaply before the shortage in 2020. It is actually very common for single income households to have a partner who leverages their partner's income; this matters in situations where there is an income tax, as tax authorities cannot take advantage of someone who extends an income by purchasing more value than standard. For this reason, comparing income of married people is unreasonable because we'd also have to evaluate how the other partner is possibly extending that income. That's more difficult to do in research and it outside the scope of my prediction that Millennial women would make more than Millennial men (which they did) when we consider a ceteris paribus context.

Prediction: Millennial Marriage Rate

I predicted that 33-40% of Echo Boomers would never marry. In 2011, only 22% of Echo Boomers had married. As of 2021, only 48% of Echo Boomers were married. Based on 2021's data, I expect that 67-70% of Echo Boomers will marry (higher than initially expected). A big part of this slight upshift is that more Echo Boomers have committed suicide than I expected (and at earlier ages) and their life expectancies are dropping faster than their parents, which will lower the never married population, as never marrieds tend to belong to both of these groups.

As I noted when speaking at events, a low marriage rate with Echo Boomers would mean a shortage of housing (as we've seen) since you have more single households that require housing plus a decline in productivity, as married men are the most economically productive demographic.

Prediction: Products

Electric cars. As I predicted with Tesla, electric cars have been extremely popular with Echo Boomers, especially since Millennial attitudes toward environmentally friendly companies is positive. I expect that this trend will continue and as electric cars become even more affordable, for their use to spread. Echo Boomers have never forgotten the pain they felt at $4 a gallon gas back in 2008 when oil was over $150 West Texas Intermediate. To this day, oil prices have never risen that high even though actual oil resources are declining. The only surprise here is that some of the competitors to Tesla have done poor in their electric car production.

Energy drinks. As I predicted, supplements did well with single male Echo Boomers, especially the more active Echo Boomers. One suggestion I made early given the success with Red Bull was that energy drinks should broaden their appeal to single male Echo Boomers and this has paid off for the ones who followed this. Energy drinks have become a huge market and they've been able to attract many male consumers outside of the fitness industry (Monster Beverage being a great example of one that does this with blue collar male Echo Boomers and Celsius Holdings being a great example of one that does this with white collar male Echo Boomers).

Survivalism takes off in 2024. The survivalist industry has done well since I published that post, though it was very niche. This year, the interest in the industry has absolutely exploded - some of the private startups in the industry are making $1+ million a weekend teaching survivalist skills to the exceptionally wealthy. This isn't only the skills either; the industry has seen an explosion in interest in the actual goods that makeup the industry. This is one of the hottest industries in 2024 that still is flying below the radar.

App Dating. As I've long advised with companies, when appealing to Millennial females, details and the shopping experience matter. The popular dating apps that exploded in popularity followed this advice. The experience felt like shopping for dates and the apps encouraged that users would add key details that single female Echo Boomers wanted to know. Also, I advised some of the companies to track how Millennial females used the apps, such as where they would look and how much time they would spend on certain areas of the app because these are key to improving the shopping experience. While the female Echo Boomers didn't pay as much as the male Echo Boomers, female Echo Boomers were key for dating apps as the male Echo Boomers wouldn't pay for the app if there were no females (gay dating apps being exceptions to this point). Another related appeal to dating apps and why they've been so popular with Echo Boomers is that Echo Boomers prefer self-esteem boosts over money and sex and dating apps provide Echo Boomers with a self-esteem boost, even if they don't act on it.

Acknowledgement

Some specific appreciate to all the people I've interviewed over the years when doing research along with links to the interviews:

Also, thank you to those who I interviewed outside the topic of demographics - Dr. Dan Eisenberg, Dr. Catherine Shanahan, Tom Naughton, Dr. Layne Norton, Christine Cronau, and Dr. Lindsey Mathews.

Thank you to all the people I've met over the years, as I've done research. The people I've met and interviewed, the people I've worked with on various studies, even the people in the studies themselves. To me there is nothing more exciting than hearing a person's story - it's more of an adventure than traveling to the coolest places. Thank you for sharing your life with me. I have been extremely careful to avoid ever storing identifiable information and looking only at patterns in a big picture sense because fundamentally I respect what you as an individual are willing to share publicly under your name. The biggest takeaway to any research is how people are the greatest work of art.

Monday, January 29, 2024

Updates

I am currently completing two projects related to Echo Boomers (Millennials), iGenZ and the AutoMon generations. I will be reposting and consolidating some of the old public content from this blog and adding private content that was never published to the public audience, as I make reference to these public and private materials from the past. Expect to see material from the period of 2009 to 2013. I will not be republishing the content unrelated to Echo Boomers (Millenials), iGenZ and the AutoMons. All re-posted public content and added private content will have some written updates over time (removal of irrelevant remarks, more details where needed, grammar fixes, etc). The order will be the following: republish and consolidate material along with publishing some private material, update links, and update or remove media. Some links will not work anymore for a period, as I will not republish irrelevant posts and also some links on other sites are now inactive. As I republish this material, I will add to the below linked list (earliest posts will appear first).

Both media and links on republished posts may be dead and will not be updated for a period of time. As I finish republishing a subset of the past posts, I will either remove or update links and media. In addition, I have done a follow-up study on Echo Boomers and will eventually add some of the details of this follow-up study (conducted during 2021 to 2022).

Thursday, November 21, 2013

Millennials Don't Know What Inflation Is, So ...

A recent article suggests that Echo Boomers should oppose Janet Yellen if they want to retire. As a quick note, remember that Echo Boomers supported Obama even though his Obamacare would cost Echo Boomers more money than if Obamacare didn't exist. Echo Boomers seldoom act in their best interest. Likewise, Yellen (and Bernanke) is a disaster for most Americans, especially young Americans, but they won't vote or take action in their own interest.

From the article:

However, by all accounts, the Federal Reserve under her leadership would continue cycles of quantitative easing. Millennials are wise to oppose this policy, because negative interest rates will make it utterly impossible for any of us to ever retire.

This sounds true and great (and it is), yet how many Echo Boomers understand negative interest rates or inflation? Even if they do, how many of them would actually take action? And finally, how many Echo Boomers vote their pocketbook, as - if this was true - they would have voted against Obama. Even from several financial studies I've conducted, only about 10-15% of Echo Boomers actually know what these things are and would take action on them. The remaining focus more on whether they like the person; and let's face it Yellen and Bernanke are likeable people.

Acting against their interest is a trait of the majority of Echo Boomers.

Thursday, November 14, 2013

Is There A Bitcoin Bubble?

I write this post with the assumption that you know a thing or two about bitcoins. If you don't, stop reading.

A few months ago (see the below chart), people declared that the bitcoin bubble had popped because it had reached around $260 a bitcoin and then fell to less than $100 a bitcoin. Except, as of this writing, bitcoin's price exceeds that supposed bubble price. Writers would love to convince you that they know all about bitcoin and why it's bubble (or why it isn't a bubble), but the truth is that they have no idea. Neither do the media (who love to hire the most ignorant people they can find). And neither do I. Bitcoin offers an approach to money that, in its conceptual entirety, hasn't ever existed before now.

But let's first consider the major arguments against bitcoin, fostered by these "bitcoin is a bubble type" who only promote this idea (why don't they at least lend a voice to the other side?).

Why Bitcoin Is A Bubble

Bitcoin fluctuates too much. By far, this argument holds the most weight against bitcoin. Because its price fluctuates, it currently remains an unstable currency.

Few businesses accept bitcoin. This may seem like a problem now and it may be a problem in the future if business don't accept it, but bitcoin makes exchanging currencies cheaper than traditional methods. It costs less to travel with it, which, with Echo Boomers' love of travel creates a demand. That being written, it still needs more businesses to accept it.

Nothing backs up bitcoin - it is completely made up. This statement is completely true. Simply put: only a maximum of 21 million bitcoins can ever exist (in 2150, currently only around 12 million exist); whereas, as the Federal Reserve has demonstrated, the US Dollar limit might be infinite. Remember basic economics: the more of something exists, the less valuable it becomes. Of course, people like Schiff will argue that gold is limited too, to which I can respond, are you sure about that?

The government may try to block bitcoin. This is an excellent argument against bitcoin if and only if all other countries do this. If several countries decide to use bitcoins (like China and Japan), this arguments completely fails. In fact, and this is what is REALLY scary, if China decides to adopt bitcoin and refuses to accept US Dollars, expect the price to go through the roof.

Bitcoin could be a scam. This point carries a lot of weight as well. Another derivative of this argument is that the government is secretly behind bitcoin. To be fair to bitcoin here, I've heard people call the stock market a scam, so this is something that people tend to state when they don't understand or don't trust something.

Why Bitcoin Carries Value

Are banks necessary? With savings' accounts paying nothing in interest, bitcoin allows you to hold your money in an independent currency which can be turned into whatever local currency you need. Not only would this help with travel and keeping foreign exchange costs down, we would literally need no "local" currency whatsoever except for buying good in that amount. At the end of the day, it's much cheaper (no debit/credit card fees at merchants) than using the costly banking system. Oh, and yeah, the banking system costs consumers huge sums of money - bitcoin eliminates the middle man. Even Bernanke admitted this:

Vice Chairman Alan Blinder’s testimony at that time made the key point that while these types of innovations may pose risks related to law enforcement and supervisory matters, there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.

Bitcoin doesn't need the United States. Bitcoin's growing popularity is happening in China and other Asian countries, not the United States. Simply put the Chinese see the value, not only in terms of efficiency, but also in terms of the lack of "control" (many Americans think bitcoin is too complex to understand because it involves mathematics).

Popular among young men. Men tend to lead innovation. Pretty much every early successful industry was dominated by men initially. The same applies to many trends. For instance, Echo Boomers love their tattoos, but if you go back about 30 years it was only men who had tattoos. We may see the same with bitcoin.

Wait until the Muslims hear about it. Some Americans don't know this, but Muslims are against earning interest (and paying it); in fact, it's one of the most wicked sins (part of the reason that Americans are left in the dark about this is because banking is behind Western culture and Islam doesn't fit in with banking - one of the reasons we are constantly encouraged to fight them as their existence threatens banks). Obviously, Islam isn't compatible with fractional reserve banking, and perhaps the world would be a better place if all of us weren't. But what's the alternative? Previously, nothing, outside of barter, which is painful.

Now, we have bitcoins and bitcoins don't use a fractional reserve banking concept, thus they may be in demand from over 1 billion Muslims (remember, bitcoin can only have a maximum number of 21 million). Luckily, most Muslims are unaware this currency exists, but when this changes, we could see bitcoin skyrocket.

As a note on these points, Americans like to think they own the world and know more than everyone. This and the previous point indicate that the power of the world is shifting and whether Americans "believe" in something or not won't mean that it will or won't succeed in the long run. In other words, it's irrelevant what some American thinks about a currency when it's in high demand in China, Hong Kong and Singapore and will later be popular in Middle Eastern countries.

Buying a bitcoin is like flipping the bird at the Federal Reserve. Admit it: this feels awesome.

Bitcoin is more evolved than gold. In a world where fiat currencies collapse (and in the long run, they will), many trumpet gold as the ultimate solution. But do you really want to barter with gold? Paper currencies make the bartering easier because you don't have to carry gold around with you, so in a sense, paper currencies - backed by gold - make sense. Even though nothing "backs up" bitcoin, it won't ever exceed 21 million. This means that it's final amount - 21 million relative to gold will be a price exchange similar to what a paper currency backed by gold would be (somehow the goofballs like Schiff never get this).

Bitcoin is global. And that's scary because basically, if it takes off, it will be a reserve currency in the world. For all the talk about "no country wants to have the reserve currency," well, they may all get their wish with a computer program displacing them.

Final Thoughts

I look at this list and am convinced I just don't know. Bitcoin may be the greatest invention that many of us are skeptical about ("Kids, if God wanted men to fly, he would have given them wings"), or it could be the next great bubble that pops. Either way, don't believe people who try to convince you that they know WITHOUT A DOUBT what bitcoin will be, because at best, we're all estimating and guessing. And based on the price of bitcoin today alone, I'd say this is normal human behavior.

Sunday, September 1, 2013

What Real Estate Do Millennials Want?

If Texas, a state notorious for building expansive cities which require vehicles, begins to build real estate with businesses next to living spaces, then every real estate developer should follow. As you can read in the previous post, Generation Y Dumps Vehicles and Driving, Echo Boomers don't like driving and won't drive as much as former American generations. They carry an expectation that their jobs and favorite shops should be near them. I predict that Echo Boomers will prefer this type of living arrangement. From a bird's eye view, how should you approach real estate development? See the below, very simplified image:

In the center black area, social businesses - such as restaurants, coffee shops, and other stores - and living spaces - such as apartment and condos - should be either stacked (living on top, business on bottom), or living spaces nearby businesses. In the outer, blue area of the development, professional businesses (like Google, Southern Company, Macy's Headquarters, etc) exist in close vicinity to where Echo Boomers live. This allows Echo Boomers to travel a minimum distance in order to arrive at a professional office. Remember that Echo Boomers experienced more financial pain from $4+ gallon gas than other generations, who had the incomes to offset this cost. These high gas prices are still fresh in their minds. In Lubbock, where I recorded my original video, the real estate developers built the businesses, apartments and shops within one square mile (and across from Texas Tech University). The more compact the development, the better for Echo Boomers.

Keep in mind that since Generation Y will have a lower marriage rate, suburban areas will be in less demand than these areas. The "suburbs" appeal to families, whereas these areas appeal to single parents and singles. With a generation of approximately 33-40% singles (in the long run) out of 80 million, that's a demand of at least 26 million from this generation alone.

Wednesday, August 28, 2013

Millennial Women Will Make More Money

Readers may recall my assertion numerous times that Millennial females are faring better than men in terms of average income, for instance, Making Billions From Female Millennials:

Do we want to try and force something on our customers that they don't want? For female Echo Boomers, bet on fashion being in large demand (along with shopping-like experiences). Remember, female Echo Boomers have more money (on average) than their male counterparts.

However, readers may also see out-dated assertions that women still don't earn as much as men, and in a few rare cases, assertions that - quite frankly - haven't been updated since the 70s (such as the 77 cent myth).

Lo and behold, my research is far more accurate than these "gender wage gap" promoters, as a recent article on LinkedIn discussed a new trend of women becoming the major breadwinners:

The first thing you should know about the big flip — it’s big. 40% of American working wives now already out-earn their husbands (Pew Research 2012). In 40% of American families (with kids under 18), mom is the breadwinner (Pew Research 2013). In fact, the Boston Consulting Group has gone so far as to predict that in 15 years, women will not just close the income gap with men — but out-earn them.

Exactly as I've predicted: Millennial women make more money than Millennial men and we can expect that to remain. I don't agree with ol' Iz in the sense that Millennial women will have to "change" their expectations on what they want in men, as I expect a 33-40% of Millennials won't marry. But, the women of this generation are more educated and can expect to earn more, provided they don't choose to drop out of the workforce, like this past generation of women did (who then complained about their poor decision!). Also, this demonstrates why for both Millennial men and women, in a battle of cohabitation versus marriage, cohabitation wins.

So, even as Millennial women surpass Millennial men in income, and this trend continues, provided that they remain in the workforce, we still will see such wage gap myths throughout media (they hardly concerns themselves with research, truth or real data). Recognize, especially as a business, that this is a demographic with strong incomes and one you do not want to miss out because of false information prevalent in media. Only a foolish company would believe the women of this generation have low incomes, and that company will miss out on a major opportunity.

Relevant Research Point

Three really important points that cannot be missed here - and points you will almost never see in the media:

1. A never married woman who never has children has always made more money than a never married man who never has children. She also has a different set of values. As a business owner who may be targetting this demographic, don't miss this.

2. The biggest factor in male income is marriage. Even education plays far less than you would expect. An ever married man (married, divorced, widowed) makes significantly more money than everyone else. This holds even truer if he has children. I'm not going to engage in a social debate as to why, but marriage and family significantly affect male behavior, especially economic productive output.

3. Related to the second point, the married men of the ever married men category seldom make the daily financial decisions of the family. This has been noted by other sociologists and psychologists. Usually the wife makes the day-to-day purchase decisions. Likewise most of these men don't consider it "their" money even if they were the sole earner. I've seen this countless times in my research. The point here is that even with this group, you're not marketing to men solely but the family unit.

Thursday, August 23, 2012

Julie Zeilinger: Challenges Facing Millennial Women

The responses to the interview questions may not represent the views of The Echo Boom Bomb's author. These interviews are provided to inform readers of information from experts and provide these experts with a medium where they can answer questions without any content changes. All linked material to products in interviews such as books or videos are affiliated with the supported platforms, such as Amazon or others. To see the full list of interviews related to Echo Boomers, iGenZ or Automons, see the ending acknowledgements on this post.

Feminism, Millennial Women and the Other Side

A few months ago, I interviewed Suzanne Venker on feminism's effects on Millennial women. Suzanne presented a challenge to some feminist notions, and I wanted to interview someone with a different perspective. After reading a Forbes article by Julie Zeilinger, I contacted her to discuss challenges that Millennial women face and how feminism can address these modern concerns.

Who Is Julie Zeilinger?

Brief Bio (taken from About Julie):

Julie founded the blog fbomb, a site for young feminists, and wrote the book A Little F’d Up: Why Feminism is Not a Dirty Word, which was released this year in May. She is currently an undergraduate student at Barnard College and has been named as one of the most influential bloggers under the age of 21 by Women's Day magazine.

You can find her on Twitter.

So, Just Had To Ask ... (Interview)

1. In your article on Forbes, you state that Millennial women face a different form of discrimination than women in the past. What are these new forms of discrimination that Millennial women primarily face?

I believe that generally the type of discrimination Millennial women face tends to be more subtle than in years past. While our foremothers were raised in a culture that generally accepted women’s inferiority to men as fact, the feminist movement has made incredible progress. Today women do have access to education and are largely able to enter the same careers as men (although men still dominate many fields and do still earn more than us on average). I believe that while the feminist movement largely accomplished legal equality, we have yet to achieve cultural equality. Women are still seen as imperfect and are largely objectified in a way that men simply are not. One really pervasive example is street/sexual harassment – so many young women face street harassment on a regular basis. And yet as we are blatantly objectified and disrespected by men, we are told that we have achieved gender equality.

Of course, there’s a huge caveat to this in terms of the fact that there are of course still women who face serious and even life-threatening forms of discrimination in the U.S. as well as abroad. Women’s experiences with discrimination are largely impacted by socioeconomic factors like race, class, sexual orientation (etc) and it’s really impossible to generalize the experience of all women in this day and age because it truly does vary vastly. My thoughts above and those that I wrote about in Forbes are based on my experience and observations as an admittedly privileged young woman.

2. How do you think that these issues can be addressed? And who/what should address these?


SlutWalk protesters in Canada.

I believe that the feminist movement is still working hard in this day and age to address these issues. I think that we’ve made great strides through online-based campaigns – petitions on Change.org and other similar sites, Twitter campaigns targeting sexist figures, etc as well as on-the-streets style activism (like SlutWalk). But I really believe that these issues need to be addressed via education. Young women (and young men, for that matter) are barely taught about the feminist movement or about the social issues the feminist movement addresses in school. I think schools across the country need to incorporate these issues into their curriculum. I think it’s just as important for students to be educated about pervasive issues that exist today as it is to be educated about U.S. history and algebra.

3. One criticism that could be made against your argument is that Millennial women are performing better than Millennial men - in terms of career and education, and thus will do better in leadership over the course of their lives. How would you respond to critics that state this?

I think we need to separate statistics like those that show women are the majority of undergrads in this country from the concept of women and leadership – they are not one in the same. I can’t speak from my own experience because, after all, I am still an undergrad but from what I understand once women do enter the workforce they face roadblocks based on their gender that simply don’t exist in the same way for men. For example, women aren’t able to progress in their careers once they start families in the same way men are (hence the recent “having it all” debate). The U.S. is seriously lagging behind in policies that would help women ascend to leadership and have a family – for example, the U.S. is one of three countries that doesn’t have legally enforced paid maternity leave (the other two countries are Papau New Guinea and Swaziland, for the record) and most companies don’t offer family friendly policies like flex hours. Despite our increased presence in the work place, women still are burdened with most unpaid domestic duties. So, while women may be able to enter the workplace we deal with a number of other duties and responsibilities that hold us back from ascending to leadership positions. Basically we have to separate our legal abilities and even our presence in certain careers and educational institutions from leadership. Also, I think that, again, the argument that millennial women are performing “better” than millennial men varies depending on certain socio-economic factors.

Friday, August 17, 2012

Jed Kolko: Millennials and the Real Estate Market

The responses to the interview questions may not represent the views of The Echo Boom Bomb's author. These interviews are provided to inform readers of information from experts and provide these experts with a medium where they can answer questions without any content changes. All linked material to products in interviews such as books or videos are affiliated with the supported platforms, such as Amazon or others. To see the full list of interviews related to Echo Boomers, iGenZ or Automons, see the ending acknowledgements on this post.

About that Housing Market ...

This blog has featured several articles about Millennials and housing (as well as the below video). With Echo Boomers being one of the largest generations in American history, when they are ready to buy homes, they should create a major demand.

When it comes to Millennials and housing, especially for the future with regards to the political climate, what can we expect? Jed Kolko, a Chief Economist at Trulia, offered excellent observations to these questions.

Who Is Jed Kolko?

Brief Bio (found at About Jed Kolko):

Jed Kolko, Chief Economist and Head of Analytics, oversees Trulia's research programs. Applying a background in economic development and research methods, he transforms real estate data, economic trends, and public policy debate into digestible insights for home buyers, sellers and renters. In Jed's prior role as Associate Director and Research Fellow at the Public Policy Institute of California, he led research projects and advised policymakers and business leaders on economic, housing and technology policies. Before his work at PPIC, Jed directed Forrester Research's consumer-technology market research, advising corporate executives on technology adoption and demand. Jed has also held positions at the Office of Federal Housing Enterprise Oversight (now FHFA), the World Bank and the Progressive Policy Institute.

Jed earned his A.B. in social studies and his Ph.D. in economics at Harvard University.

You can find him on Twitter.

Millennial financial data obtained from 2010 to 2011 for this blog.

So, Just Had To Ask ... (Interview)

1. The Millennial generation (approximately born from 1980 to 1995) will be America's next great generation as far as housing is concerned, whether they rent or own. Based on your research, what have you observed about Millennial homeowners at this point in time, or is there any indication that they're interested in home-ownership?

The Millennial generation suffered a worse recession than older adults. The unemployment rate of 25-to-34-year-olds rose higher than the unemployment rate overall and only recently fallen back in line. Many Millennials doubled up or stayed at home with parents rather than entering the housing market on their own as renters or buyers. But they won’t live with their parents forever. As the economy recovers, they’ll enter the housing market: nearly two-third still say that homeownership is part of their American Dream. Buying, though, will be a challenge for many of them: for Millennials, the downpayment remains the biggest obstacle to homeownership, and with rents rising rapidly and student debt hanging over their heads, saving for a downpayment is a challenge.

Editor’s Note:

While not Millennials, the New York Times recently featured an article about 4 men with a unique living situation. Some Millennials are doing something similar, like Jessica in 4 strange ways to save money. Similar to Jed's point, these may be temporary strategies to handle the current economic climate. This doesn't mean they won't ever demand homes of their own.

2. According to Case-Shiller (as of April this year), housing prices are on the rise again. Can we expect them to continue to rise, level out, or fall - and what's been helping this increase in prices?

The Trulia Price Monitor – which tracks asking prices – shows that prices have been rising for six months and have been rising in most major housing markets. Job growth, along with declining vacancies and inventories, are pushing prices higher. Job growth means more people are interested and able to buy, and the decline in vacancies and inventories means that buyers are chasing fewer available homes and therefore bidding prices up. A big reason for lower inventories is fewer foreclosed homes on the market. Since foreclosed homes are often at the lower end of the market, first-time buyers will find fewer bargains listed for sale then they would have a year ago. We’ve seen asking prices continue to rise in July, which means sales prices should keep rising at least through the fall.

3. This is for the Millennials out there who question the value of home-ownership - are there any economic arguments in favor of renting as opposed to owning (I know, an unpopular question here in the United States)?

There are good arguments in favor of renting, depending on your situation. Buying a home involves upfront costs, as well as time and effort – which may not be worth it unless you plan to stay in your home at least 5-7 years. Also, renting may make more sense if you are new to a city and aren’t sure which neighborhood is a good fit for you. Finally, in some markets buying is not really cheaper than renting – such as Honolulu and San Francisco, as well as Manhattan – especially if your tax bracket is low and you therefore benefit less from the mortgage interest deduction. Still, with the huge price declines in the past five years, and rising rents, buying is quite affordable relative to renting in most markets, especially in the Midwest and the South.

4. A side question here - but one that will gain increasing amount of attention in the future: is the mortgage tax deduction a good idea from an economic standpoint? Why or why not?

The mortgage interest deduction is politically popular, but one of the few areas of possible bipartisan agreement on tax reform might be to reduce tax deductions – of which the mortgage interest deduction is a major one. On one hand, the housing market is still fragile, and rising prices have real benefits for the economy, so reducing the incentive to buy a home right now could hurt the economic and housing recovery. On the other hand, because of the way the mortgage interest deduction works, it gives a much bigger tax break to richer taxpayers, particularly in geographic areas with higher home prices. Only 30% of taxpayers even itemize their deductions in the first place, so the benefits of the mortgage interest deduction goes to some homeowners and not others. The mortgage interest deduction is – and will remain -- in the crosshairs of two big policy debates: how much should government spend to encourage homeownership, and what’s the fairest and most efficient way to spread those benefits?

Monday, July 30, 2012

Med School Blows Past the Education Bubble

I expect the partisans to argue about this article as far as the health care law is concerned:

Health experts, including many who support the law, say there is little that the government or the medical profession will be able to do to close the gap by 2014, when the law begins extending coverage to about 30 million Americans. It typically takes a decade to train a doctor.

However, pertinent to the education bubble, we need doctors - and medical school is not in a bubble compared to other degrees. Of course, in how economics says education is a waste, we find that supply and demand ultimately matter, something many are missing when they try to argue in favor of education. While our marketplace holds too many degrees, unfortunately, we are seeing a major gap in some professions - the main one being medical school. In fact, law school is in a huge bubble, while these same students won't consider pursuing a medical degree (an M.D. is much harder to obtain). One related point I speak about that goes missing in this analysis is that while lawyers want all systems to become more bureaucratic, doctors want the system to produce superior results. The United States almost graduates more lawyers than doctors - what do you think the long term effect of this will be?

The Supply and Demand Problem

Unlike other degrees, we have a major supply problem with medical school. We have a massive generation aging (the Baby Boomers) and we've expanded medical coverage under the health care law (increasing competition for goods and services). We don't have the equivalent increase in students attending medical school and we continue to see a rise in lawyers - these lawyers will only complicate the future healthcare system. In other words, health care costs will continue to rise for the foreseeable future due to a lack of doctors (this factor alone will cause problems). As this causes pain in the medical field, it could create more shortages because a shortage of labor can lead to overwork of that labor (ie: with a doctor shortage, existing doctors have to "offset" the labor shortage, thus some may choose to retire early). This could also cause pain in related medical professions, such as nursing.

Another factor, contributing to this problem, is the hostility toward young men on college campuses. In a private discussion I had with executives titled "Too Many Young Men In STEM Fields", I highlighted government policies trying to attract more young women, while punishing young men with interest in science (normally, a precursor to medical school). To put it bluntly: we need doctors regardless of their gender (note the the policy to decrease help to young men in STEM fields while trying to promote young women is a move to strengthen Obama's popularity among young single women - most of whom support his candidacy). While I understand the political move by Democrats, as young women are predominantly their voters, the problem is that we have a labor shortage in medicine. When you're faced with a labor shortage, you don't exacerbate the problem with policies that increase the shortage. Don't miss that male doctors are much more likely to work longer hours than female doctors. This means that you would need as much as twice as many female doctors as male doctors.

Note: The unintended consequences of serving only your group of people is that you end up undermining your group of people. We live in a society with a specialized division of labor. In this society, we rely on others and their skills (specialty). If we have a shortage of any specialty, we all pay a higher cost. Any political policy that favors one group over another in a way that would discourage one group from obtaining a specialty (especially when that specialty is in a shortage), will result is huge consequences for everyone including the favored group.

Ideology Over Pragmatism

A college professor once told me that all problems fundamentally begin when people place an ideology over pragmatism and we see that here. We have a shortage of doctors, an aging population, and plans to expand healthcare (all on top of a growing national debt that will eventually bankrupt the country). Yet we don't have the fundamentals in place for these things to exist in reality. In addition, we're adding legal complexity to the healthcare system (thank you lawyers!) and we're discouraging young men from going to college, ironically lowering the supply of future doctors that we'll need. In a way, the future looks bright for those in medical school, but sadly looks dim for the rest of the country.