Note that the following four examples have names changed of actual Echo Boomers. These Echo Boomers belonged in the affluent group of Echo Boomers, so from a marketing and financial perspective, these Echo Boomers reflect the values of wealthy Echo Boomers.
Since many Echo Boomers face major financial hurdles and the economy isn't improving, I decided to post some stories of succesful Echo Boomers and how they've managed to save extra cash while still enjoying life in the way they want. Of course, any person of any generation can look at these stories and consider their value for their financial plan. If you know someone is struggling and may be helped by such stories, send it to them.
A Home Fit For ... Ten
Jessica lives in California, where a house can easily rent for over a thousand dollars a month. But Jessica only made five thousand a month after taxes and didn't want to watch 20% of her income evaporate into thin air. She also had other goals than living expensese: she was saving for a master's degree, an eventual wedding, and a home to call her own.
"At first, I was stuck," she told me. "I am from the Midwest where I could rent a place for $300, and that was a nice place. The first place I was shown in California cost $800 and it was about one-third of the size of my Midwest places."
With many goals, an economy with prices rising, and an expensive location, what did Jessica do? She moved in with nine other girls in a five bedroom home.
"People respond exactly like you did - YOU HAVE NINE ROOMMATES?" she laughed. "I should probably win an award or something." And Jessica does: the home's monthly rent, including bills, cost $2000 a month. But divide that by ten people and her total cost is only $200 a month - 4% of her post tax income.
And Jessica, like many other Echo Boomers, loves to experience a strong social environment, but it does come with its downside. "Let's just say," Jessica laughed, "that there are times when a girl needs some privacy and well, with nine other girls, it's hard to find that."
Chill With The Doers
David dislikes spending on stuff. He watches people buy a bunch of junk that they never use only to continue doing it ad infinitum. But David has one weakness: trying new things.
"It's easy to save money when your cost for event A in dollars is low, but high in time," David said to me, as we discussed his savings' goals. "When you think about it, you need a lot of time to spend money, otherwise, it's just money growing." David's secret involves a group of friends who like to enjoy new challenges. The added bonus is that, unlike David, most of his friends were poorer than him, so everything cost little money (while David admits that when it comes to experiences he doesn't mind spending a few extra dollars).
David's life involves doing many different things when he has time away from work, but never enough time to spend his cash. Within a decade, David will opt for early retirement and continue to do crazy things with his friends. As he said toward the end of our conversation, "A $100,000 will last longer than I intend to live if I'm only spending a $1,000 a year." I think that he's wrong though - this guy will easily live to 180.
No Man Is An Island ... Well Except That Man, and That Man, Oh, and That Man, Oh and That Man Over There ...
Jeremy excelled at everything since he was a young kid. But whether he was "too smart for his own good" or was tired of pleasing everyone, he finally had enough and exited civilization.
"I built an underground home on a 1000-acre property," Jeremy told me. Unlike the other Echo Boomers in my study, I actually knew Jeremy from a friend - he had been an engineer for a while, amassed a huge pile of cash and left for his own land (his financial data are not included in my study as that would not be random; his story, however, is interesting). However, Jeremy accomplished a task that I thoroughly interested me: he built an underground home and completely generated his own electricity. "When I first built the home, it consumed about $10 a month in electricity. Now it consumes $0 a month. So much for inflation," Jeremy bragged.
But what made Jeremy exit civilization in the first place? "I realized that as I was around more people, I was less happy. Their fears became my fears, their hopes became my hopes and in order for me to stop it, I had to get away. But getting away a few weeks out of the year wasn't enough; I needed to exit for longer." Jeremy built his house and planned it for self-sufficiency with a property that produces food, water and a few other important commodities.
And Jeremy said something I won't forget for a long time, "I can live without happiness, and hope and even success. But I cannot live without peace. And I have that here on my own."
Saving Money While Spending $500,000
The economy collapsed. Home prices fell. Everything went on sale as merchants were desperate for dollars.
Jared hates frugality. He won't read your frugal blog, your frugal book, or buy your frugal videos. Why? "I came from poverty and there's nothing more 'frugal' than poor." We can agree or disagree with Jared here, but he surprised me in our conversation as he doesn't spend foolishly.
Jared amassed over a half of million in cash (in the study, the top spot is held by an Echo Boomer with $400,000 and you'll see why Jared doesn't hold the top spot). When the economy collasped, Jared saw everything he wanted to buy with seriously discounted prices plus desperate sales people. Jared wanted that silver convertible at a steep discounted price. He got it. Jared wanted a large home with hardwood floors and granite countertops. He got it. Jared wanted nice possessions, like a TV, hot tub and fancy lighting to fill his new house without sparing any desire. He got it.
He also signed up for lifetime memberships at places where most guys wouldn't step a foot in (salons, special fitness clubs, et cetera). "I'd say that I received a $1.5 million dollar value by only spending a half a million," Jared said. "The key was timing." Jared has a point: one might be tempted to call him a materialist, but even if that's true, his desire fell in line with his financial sagacity.
Of course, writing his story without adding that he didn't liquidate any retirement assets might paint a different picture. "Oh yeah, I still have six figures in retirement accounts - I wouldn't empty those." He went on to admit that he's done all the spending he wants (except some travel). He can save the rest of his income without worrying about needing new stuff for a while, or wait until the next recession sets everything on sale again.
"The best way to save money is to spend it," Jeremy said. "You know, when the time is right."