Thursday, March 31, 2011

Millennial Advocacy Group

Due to the financial and economic situation of Echo Boomers, Our Time - a Millennial advocacy group - recently formed to help out Echo Boomers. The article starts off with some interesting facts:

One in six are unemployed, more than any other adult age group. They carry an average of $24,000 in student debt. And one in 10 have been forced to move back in with their parents after school.
I've already addressed the misleading figure about average student loans in Tuesday's post. However, what about the other two problems the article cites - one in six are unemployed and one in ten move back with their parents.

One in six Echo Boomers being unemployed seems like a disaster at first, until you realize that one in six is only 16.7% (national average is near 10%, depending on which source you evaluate). Remember, the article makes it clear that it references young people under 30 years old. A lot of Echo Boomers under 30 are still in school, so we shouldn't expect them to be employed. However, we can't be sure they are included or excluded as there's no numerical context to the rate listed. My point here is not that Echo Boomers don't have a high unemployment rate, but that without specifics, we don't know if 16.7% is high or not (have former generations had young people with high unemployment rates?).

The final statistic - one in ten lives with their parents - doesn't seem frightening at all. In fact, based on my own study, that seems very low. At least 1 out of 5 Echo Boomers I speak with state that they live with their parents, and fewer than 11% of them are homeowners. If the "real data" is that only 10% live with their parents - Echo Boomers are doing very well.

Note, however, that the study fails to provide any historical context. For instance, how many young people moved back with their parents during the Great Depression? Perhaps 10% may not seem that high if we compare it to former generations. Without a historical context, we don't know if that's a high amount or a low amount.

The point here is not that the article is blatantly wrong or lying, but that it lacks any context by which we can know whether Echo Boomers are facing a crisis or not.

Wednesday, March 30, 2011

3 Great Books About Echo Boomers

Millennials Rising

If you doubt the importance or significance of the Millennial generation, this book will definitely challenge your views. And here's the best start: we are only witnessing the very beginning of a massive generation that will have a significant impact to the United States.

The Dumbest Generation

For the record, I do not think that Echo Boomers, or any other generation, are the dumbest generation. However, this book presents interesting information on how our digital age affects young people. While the author assumes that this is for the bad, I would argue that many of these changes will be positive. However, they will have major effects on our future economy.

Generation We

As opposed to Generation Me, this book presents a positive image of Echo Boomers and how they will change the world. In my professional experiencing in speaking with Echo Boomers, the fact is that they are closer to this book than Jean's book. However, both are quite good.

Tuesday, March 29, 2011

A Note on "Averages"

In the past I've warned about anecdotes versus data, especially when reporting student loan information. Media portray a dismal picture of Echo Boomers and their college loans, like the example I used of one girl in $100,000 of student loans. Another ubiquitous line I've read in media is "the average college student has $20,000 of student loans." The trouble here is not accuracy in the statement (though the average Echo Boomer only has $6,857 of student loans, the median is $0.00 - not all Echo Boomers are/were college students), but in numbers.

For instance, let's suppose that we had two college students who graduated medical school in $200,000 of student loans each. And let's also suppose that 18 other college students graduated college with no loans whatsoever. In the group above of 20 students, what is the mean student loan amount in dollars per student? The answer is $20,000. However, only two students had student loans - why did the answer come out to be so high?

If you have large numbers in groups, then the mean will appear higher if you calculate the mean (as opposed to the median). Notice that in the above example, if you calculate the median the answer would be $0.00, which is more representative of the above example. Media won't state this when they use "the average college graduate has $20,000 of student loans." As I demonstrated in the other post, they love extreme cases and they love averages without any numerical context. While extreme cases make for fascinating stories, they do not represent scientific samples or reflect an accurate picture of reality.

Monday, March 28, 2011

Are Echo Boomers Greener?

According to an article on the Millennial selling point when apartment shopping:

Sustainability looks to be the wild card when it comes to the Echo Boomers’ apartment wish list. “This generation is more focused on the impact of its carbon footprint,” according to Michael D. Binette, AIA, vice president and principal in charge of construction for the Architectural Team in Chelsea, Mass. “They won’t pay more for it, but if they have the choice of two buildings with the same rent, they’ll pick the more sustainable one.”
Are Echo Boomers adjusting their expectations to ensure they make a lower carbon footprint? While it's possible, a few counterpoints that may paint a different picture.

Data counterpoints (from Millennial financial data):
1. Fewer than 11% of Echo Boomers are homeowners, meaning that even though this is the second largest generation in American history, we don't see an "above the normal rate of homeownership per generation" for Echo Boomers.
2. Along with the above, the average savings for Echo Boomers is $1,736 and the median is $0.00. Echo Boomers lack the financial resources to obtain the nicer apartments with uppper class decorations.
3. A significant amount of Millennial financial resources will be routed toward debt, which over 61% of Echo Boomers have. If more resources are paid to these debts, that will mean fewer dollars for nicer apartments.

Trend counterpoints:
1. In the past, Echo Boomers have consumed expensive clothing apparel, expensive technology, and other items exceeding the basic expenditures required to live. Much of that consumption was under parental financial support, but as Echo Boomers provide for themselves, they'll find that luxury items - especially housing - aren't easy afford.
2. From past trends listed above, there's little - if any - reason to think that Echo Boomers don't have luxury tastes. Affordability is what's in question.
3. Provided that green housing and apartments are cheaper, Echo Boomers will choose the green path. This is due to the fact that housing is listed by many Echo Boomers, who I speak with, to be their most expensive monthly bill.

All of this indicates that, while green concerns may be driving Millennial purchases, financial resources and other trends may point that Echo Boomers lack the resources for more luxury housing.

Saturday, March 26, 2011

Oph Topik: Grad School vs. Entrepreneurship

Each Saturday the Echo Boom Bomb features a post impertinent to Echo Boomers.

One common question I receive from people of all ages is: is grad school worth it? The question is impossible to answer since it lacks something as a comparison. For instance, is grad school better than just working might be a question one could look at by evaluating the benefits to each. That being said, entrepreneurship provides many advantages that grad school does not. So, which of these is the best choice?

Grad School advantages
1. Demarcate yourself with an upper level degree.
2. Network with other educated individuals and future professionals.
3. Increase your social capital.
4. Learn something interesting.

Grad School disadvantages
1. High cost in both time and money.
2. No future guarantee of a job.
3. Loss of several years in income.

Entrepreneurship advantages
1. Learn-by-doing.
2. Network with other professionals and entrepreneurs.
3. Face a significant amount of adversity and uncertainty.
4. Work at your own pace and strengths.

Entrepreneurship disavantages
1. High probability of failure.
2. Possibility of no money from a significant investment of time.
3. Seldom looks good on a resume.

I guarantee that a thousand people can read the above and come to different conclusions about which path offers the best options. However, it should be of note, and some undergraduate profesors may seldom state, that entrepreneurship is its own form of graduate school - if you succeed.

But as a general rule, keep in mind that no path in life is a guaranteed route to success. When you think about the options you have, try to compare them to other options and focus on your strengths.

Friday, March 25, 2011

"Should I Cancel My iPhone?"

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance concerning the Millennial generation. These questions are often asked by Echo Boomers and/or their parents that I survey or can be directed to my email at echoboombomb [at] gmail [dot] com. If you email a question, please be sure to keep it concise and direct.

Question: My iPhone plan exceeds $100 a month, and I'm not even saving 10% of my income. Due to my plan's high cost, should I cancel my iPhone and get a basic plan?

I remember when I first spoke with Echo Boomers about the iPhone and its plan: the costs shocked me. Many Echo Boomers immediately starting asking, "Yeah, do you think it would be wise to cancel it?" and that quickly became a popular question I had to answer. For the record, if the iPhone provides you with some incalculable value that you just can't live without, this post won't mean anything to you.

However, if you're concerned about whether your iPhone investment is paying for itself, here are some questions to ask yourself:

1. What is your return on investment with your iPhone? Do you save or earn money from having it? If you save or make more money than the cost of your plan, keep the iPhone.
2. What do you mainly use your iPhone for? Can this be accomplished with something else that would cost much less? If the answer to the second question is yes, consider switching plans and cell phones.
3. Can you claim your iPhone plan as an expense on taxes and have the cost reduced? Or, how can you turn your iPhone into a business investment so that you can get a cost reduction. Think outside of the box here so that you can find a way to keep your iPhone.

Those questions should guide you in your final decision to let the iPhone go or keep it. Paying for the phone and plan is neither good nor bad, but if you can find a financial function for it, you'll know that you're not paying to own it.

Thursday, March 24, 2011

Will Low Marriage Rates Sap Future Housing Demand?

As an Echo Boomer, I often hear from adults that the lack of interest in marriage among Echo Boomers will suppress housing demand. In fact, a recent study has been used by some adults as evidence that Echo Boomers will have low marriage rates, and thus a low demand for housing.

First, I've written about the housing recovery and will write more in the future with pertinent economic data. Frankly, marriage rates of Echo Boomers are far less of a concern than the Millennial financial data. This is not a generation that looks prepared to own homes.

Second, female Echo Boomers that are unable or disinterested in finding partners tend to express interest in owning a home later in life regardless of their marital status. Male Echo Boomers, by contrast, do seem satisfied with renting. My point here is that even if all Echo Boomers stayed single (already untrue), and most female Echo Boomers bought homes and most male Echo Boomers rented, you'd still end up with similar numbers for housing demand in the future.

Third, marriage doesn't equate to home ownership. Although married Echo Boomers I speak with tend to mention interest in owning homes, a few single Echo Boomers have already achieved home ownership. The assumption that marriage means responsibility may only be true for former generations. Echo Boomers may see marriage as an irresponsible decision due to potential emotional and financial problems pertinent only to marriage.

I am not writing here that marriage is irresponsible, but that the cultural view of marriage, in the past assumed to be responsible by default, may be changing among Echo Boomers.

Fourth, as one who studied and worked for a degree in social science in college, society goes through social changes on a regular basis. Even if housing demand were to drop due to a lack of marriage, other parts of the economy would pick up because single individuals would need other services. In other words, we may see fewer dollars go toward housing and enter newer markets for singles.

Tuesday, March 22, 2011

Echo Boomers and Their Views

A fascinating video covering the influence and opinions of the Millennial generation. Note that, unlike this study, the video covers Echo Boomers born from 1980 to 2005 (a 25 year age range), which helps explain why they are three times larger than Generation X (according to the video).

Some highlights:

  • Echo Boomers favor isolationism more than older generations.
  • Echo Boomers use a significant amount of technology for news and information.
  • Echo Boomers are more pragmatic than former generations.
  • Echo Boomers have been heavily influenced by three major events: 9/11, Iraq War and Hurricane Katrina.

Monday, March 21, 2011

3 Great Money Books for Echo Boomers

I Will Teach You To Be Rich

A financial book designed for Echo Boomers or the Echo Boomer in your life. Whether you are in your twenties and just learning the ropes of managing money, or a parent of an Echo Boomer and are concerned about your child's financial future, this book introduces finances in an easy to understand way. Sethi also writes in a way that Echo Boomers will appreciate and feel connected to.

Do Hard Things

This book is not directly written about money, but it challenges its young readers in ways that our society fails to do. Instead of expecting few things of young people, the authors expect great things from young people. Echo Boomers would greatly benefit from this book as its indicative that the key to any success - including financial - comes from people's expecations of what they can accomplish.

Stop Acting Rich

Echo Boomer grew up when lifestyle marketing and advertising became popular (remember Abercrombie and Fitch?). However, many of these "lifestyle" goods and services are nothing short of a waste of time and money. This book, which Echo Boomers should especially take note of, differentiates between real wealth and a financial facade.

Saturday, March 19, 2011

Oph Topik: 3 Housing Recovery Denials

Each Saturday the Echo Boom Bomb features a post impertinent to Echo Boomers.

In the financial industry, we hear a lot about a possible housing recovery. In fact, the trite sell line for housing is, "It's a buyer's market because, pretty soon, houses are going to cost much more." However, in order for housing prices to rise, there must be a significant demand, and I see three major encumbraces to the housing recovery.

1. The Millennial financial data. Remember, Echo Boomers are the second largest American generation in U.S. history. However, from reviewing the data, does it look like they are ready to buy homes?

2. If oil prices continue to remain high, or climb higher, even current homeowners will feel the financial pinch. And Americans, who don't own homes, won't consider adding another financial obligation. With high energy prices, renting provides the flexibility for a person to move where it's close. If they lose Job A, they can move closer to Job B. A person, who owns a home, cannot move anywhere - they are restricted.

3. Uncertainty is dominating the market. Look at the rise of food prices alongside oil prices. If people feel like they won't be able to afford food or energy in the future, they won't commit to homeownership. When I talk to people who are ready to buy homes, they feel financially stable in their lives. If instability and uncertainty continue, people will continue to avoid any homeownership commitment.

Friday, March 18, 2011

5 Solutions For High Gas Prices

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance concerning the Millennial generation. These questions are often asked by Echo Boomers and/or their parents that I survey or can be directed to my email at echoboombomb [at] gmail [dot] com. If you email a question, please be sure to keep it concise and direct.

Question: Gas prices are killing my wallet. My job cut back salaries, but didn't lay any of us off. With fewer dollars this year and higher gas prices, what can I do?

There are five potential solutions for higher gas prices, depending on your financial situation.

1. The most important solution is to adjust all your goals/plans/dreams for high energy prices. Assume, from now on, that gas prices will be ten dollars a gallon. Why do I write this? Because I think that over the next ten years we will see $5-$10 a gallon gas for good. Knowing that, how would you plan your future?

As a pertinent addition to the above, I know several geologists who state that the world has enough oil, but that it's difficult to obtain this remaining oil. In other words, oil prices must rise because it will cost a significant amount of money to obtain the world's remaining oil. I guarantee that if you expect high energy prices in the future, you will permanently change many of your goals/plans/dreams. And the probability of high future oil prices is large.

2. How can you minimize your travel? For instance, if you commute long distances to work, can you move closer? Can you minimize the amount of time you travel - whether to the store, social events, et cetera. Remember, what you see now is the norm. How will you change your current travel to comply with this norm?

3. Buy an electric or natural gas vehicle. Again, for some Echo Boomers this is not an option - due to a poor saving's habit - but if you can invest in an electric or natural gas vehicle, do it. Oil prices will only continue to rise in the future.

4. Lower other monthly expenses. For instance, if you split rent with a roommate, try to add another roommate to save additional money. Find other areas where you can cut. This may mean thinking far outside the box. As Americans, we tend to think that we "deserve" all the stuff we have, but the truth is that without the appropriate work and energy, we don't.

5. Evaluate your pay and the costs required to arrive at work. Make sure that a closer job, after all your commuting expenses, doesn't pay more. Remember, that a dollar less an hour, if it saves you several hundred dollars, might be worth it in the long run.

Thursday, March 17, 2011

Echo Boomers Cut Back

A recent Harris Poll shows that Echo Boomers are cutting back on many services to save more money. Of course, while this poll may imply that the employment situation will remain dire due to little money being exchanged, I should note a few things it fails to state concerning Echo Boomers:

1. Echo Boomers have the highest unemployment rate of U.S. demographics. Echo Boomers may be eliminating services due to no income or lack of parental support (even before the economic collapse, Echo Boomers didn't have high employment prospects).
2. Some of the Echo Boomers surveyed were in college. Due to higher college tuition and rising energy prices, students will be finding ways to save money.

All of this is to state that there are some other factors which were overlooked in the poll. In general, Echo Boomers are obviously feeling an economic pinch, and we shouldn't expect to see them increase their spending any time soon.

Wednesday, March 16, 2011

Why Study Echo Boomers?

Basic Demographic Information

Echo Boomers are the second largest American generation, depending on when you date them (sources will place them anywhere from the late 1970s all the way up through 2000). This study only studies Echo Boomers born from 1980 to 1993, a significant American demographic.

Economic Reasons

Since Echo Boomers are a large generation, future supply, demand and economic possibilities will come from them. However, much of the future supply, demand and economic possibilities will be predicated on how Echo Boomers manage their financial resources. For an example, if Echo Boomers have little saving, how will a rise in a homeownership occur in this generation? Thus knowing a lot about Echo Boomers will help economists and financial analysts predict the outlook for the United States.

Business Reasons

Echo Boomers don't operate like former Americans, and don't demand the same services. For an example, many Echo Boomers I spoke with would use a spreadsheet to convey their financial information - something that older individuals never did. Seeing trends, like an increased use of technology, helps businesses strategize about how to market to this generation, as well as build products that Echo Boomer like. However, if Echo Boomers lack the financial and economic resources, businesses must take extra caution to ensure that their products and service beat their competitors.

Tuesday, March 15, 2011

Data Now Two Posts

I recently updated the original data post by breaking it down into two separate posts.

Millennial financial data (long)
Millennial financial data (short or data-only)

Some people don't have the time to read through how the data were collected or why the data are important (coming soon), so the short post will cover the basic details. It should also be of note that as I break down the study by age and gender, both versions will contain all the data, but statistical disclosures will only be in the long version.

Monday, March 14, 2011

3 Negative Impacts of High Gas Prices on Echo Boomers

As gasoline prices began to rise, some economists fret about how high gas prices may encumber a strong recovery. However, high gas prices also threaten the financial stability of Echo Boomers in three different ways.

1. The Millennial financial data show that over half of U.S. Echo Boomers have no assets, such as emergency savings. In other words, over half of Echo Boomers live paycheck to paycheck. With higher gas prices, Echo Boomers will seek other ways to adjust their expenses or borrow more money.

2. I speak with Echo Boomers on a regular basis who commute long distances to school. If gas prices continue to stay high, or rise further, this may mean that some Echo Boomers will either need to move closer to school, find another university closer, or stop school altogether. The same reasoning applies to Echo Boomers who commute long distances to work.

3. Expect high gas prices to encumber many Echo Boomers from saving money for retirement or a future home downpayment. If gas prices continue to stay high, Echo Boomers will further delay any consideration to buy a home. Also, the 2% tax deduction from social security will most likely be wasted on higher gas prices, and not saved or spent stimulating the economy in other ways.

Essentially, I don't expect to see the financial and economic outlook for Echo Boomers to improve as long as we see high gasoline prices.

Friday, March 11, 2011

"Help! Too Much Debt"

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance concerning the Millennial generation. These questions are often asked by Echo Boomers and/or their parents that I survey or can be directed to my email at echoboombomb [at] gmail [dot] com. If you email a question, please be sure to keep it concise and direct.

Question: I am currently in school trying to finish my Master's degree, but I feel as if I have too much stuadent loans (~$40,000). On top of that, many of my friends, with the same degree that I am working on, aren't finding jobs. Some professors suggest that we stay in school longer and work on our Ph.D.s. What can I do?

Answer Continuing your education is a good idea if you are a professor and your salary is determined by enrolled students. Otherwise, for your situation, I wouldn't recommend a higher degree if you can't find a job with a Master's degree. Depending on your field, you may be overqualified with a Ph.D., and some jobs may not be hiring because the economy is in bad shape.

The two major concerns for you now are:
1. Your job prospects once you get out of school.
2. Whether your student loans are negatively amortizing your debt, or the interest you currently owe is being added back to the principal (making your payments in the future cost more).

For problem one, I'd suggest meeting people in your field and asking around about employers, who are hiring. Also, ask yourself what other job opportunities might open up with your degree that may not be directly in your degree's field. If neither of those options helps you, ask yourself what other skills you have - outside your degree - that you could use for income purposes. Do you have skills that people might pay for? Remember, something like cleaning houses or moving lawns might bring in an income if your field isn't hiring.

For problem two, if you see that some interest is being added back to the principal on your student loans, I'd suggest automating a payment to cover the owed interest each month. Even if your unable to pay on the principal balance, be sure to cover the interest so that your student loan balance doesn't continue to rise.

Thursday, March 10, 2011

Echo Boomers and Entrepreneurship

Another article unintentionally foreshadowing the coming Education Bubble: Young Jobs in the Balance

A survey of 1,623 Gen Yers, conducted by Buzz Marketing Group, the Young Entrepreneur Council, and presented by LegalZoom, finds that 79 percent of respondents are interested in entrepreneurship; 27 percent are already self-employed; and 21 percent have started a business as a result of being unemployed.
If more Echo Boomers turn to start their own business, what is the purpose of higher education? Some of these businesses don't require college degrees, and as they become more prevalent, it will demand an answer to the question, "Why go to college?" Expect young Echo Boomers to also take note of this when considering whether they should go to college or not, as the costs of a degree could be a significant down payment toward starting a business.

As several Millennial business owners have told me, "You don't learn much in college. You learn plenty in life."

Wednesday, March 9, 2011

Education Bubble and Echo Boomers

We've heard a lot of talk regarding the Japanese bubble, the dot-com bubble and the real estate bubble. Some even think that investors are creating a commodities bubble in things like gold and silver. But what about an education bubble? Even more than real estate, there is a pervasive assumption in the United States that a college degree always pays for itself.

Paul Krugman wrote a while ago about a future that required fewer white collar workers. Sure education seems important and it has easy selling points, but the higher career paths are also the ones that technology can replace the easiest.

Echo Boomers, unlike former generations, believe in education. I speak with very few Echo Boomers who didn't or don't plan to go to college, but many of them aren't asking if a college degree, in terms of time and financial resources, is a wise decision. As I continue writing on this blog, I will cover the education bubble since, based on my data and calculations, I believe than a pernicious education bubble is forming and will have massive consequences when it pops (much worse than the real estate or dot-com bubble). For now, and as a beginning, consider these assumptive parallels to the dot-com and real estate bubbles:

1. Education always pays for itself, no matter the cost.
2. Education is an investment, so borrowing money for a degree will pay off in the long run.
3. Nothing is more important than a college degree.

Tuesday, March 8, 2011

Echo Boomers Take Public Jobs

The NY Times reported that some Echo Boomers have taken public jobs as opposed to private jobs due to the down economy. The author also points out in a blog post:

A federal program also grants forgiveness of student loans for grads who work in public service for at least 10 years (although none of the recent grads I spoke with cited this as a reason for their career choice, perhaps because so few people know about the program).
Of course, if Echo Boomers become more aware of this Federal program, that would change the landscape of student loans in the future, as those with large student loans balances might see them eliminated after 10 years of work.

Would this be a good financial decision for an Echo Boomer? That depends on the financial trade-off of working in the private sector vs. working in the public sector in terms of 10-year income and the student loan amount.

Monday, March 7, 2011

Who Are the Echo Boomers?

Millennial Fast Facts

You can read throughout this blog to read information about Echo Boomers, or you can read some highlights. Each piece of information about Echo Boomers also contains an article for you to read the details.

  1. Echo Boomers are the largest generation in U.S. History since the Baby Boomers (Generation Y Is How BIG?).
  2. There are approximately 80 million Echo Boomers between the birth dates 1982 to 1995 (Generation Y Is How BIG?).
  3. Echo Boomers are also called Millennials and are part of Generation Y (Generation Y Is How BIG?).
  4. Post housing collapse, Echo Boomers hold the highest unemployment rate of any U.S. demographic (Can Echo Boomers Survive the Recession?).
  5. Echo Boomers are more isolationist than former American generations (How Do Echo Boomers Think?).
  6. Echo Boomers use technological forms of news (How Do Echo Boomers Think?).
  7. Echo Boomers favor pragmatic policy over ideological policy (How Do Echo Boomers Think?).
  8. Among all different political views, Echo Boomers are influenced most by their parents (How Do Echo Boomers Think?).
  9. A small percentage of Echo Boomers move back in with their parents, and this act is not stigmatized as irreponsible (Do Echo Boomers Just Own or Rent?).
  10. Echo Boomers think that China will pose the largest problems for the United States in the future (Do Echo Boomers Fear China?).
  11. Echo Boomers observe religion far less than former generations (Do Echo Boomers Lack Religion?)
  12. As of 2009, only 21% of Echo Boomers were married (Will Marriage Become A Minority?).
  13. As of 2009, Millennial median houshold income is $58,620 (How Much Money Do Echo Boomers Make?).
  14. As of 2009, 54% of Echo Boomers lived in the suburbs (Where Do Echo Boomers Live?).
  15. Echo Boomers seem less interested in owning their own vehicles than former generations ("No Vehicles Please. We're Echo Boomers.").
  16. 90% of Echo Boomers over the age of 18 have access to the internet; 75% of Echo Boomers use some form of social networking; 40% of Echo Boomers have no land-line (What Services Does Generation Y Like/Dislike?).
  17. 40% of Echo Boomers have a tatoo (What Services Does Generation Y Like/Dislike?).
  18. Echo Boomers value time over money and value relationships over work (source).
  19. Echo Boomers tend to buy products on the basis of peer suggestions, not advertising or public relations (source).
  20. Echo Boomers tend to buy smaller houses on smaller lots which are closer to work (What Services Does Generation Y Like/Dislike?).
  21. Echo Boomers invest half of their money in cash and bonds as opposed to stocks (What Services Does Generation Y Like/Dislike?).
  22. 82% of Echo Boomers expect to be married for life (What Does Generation Y Say About Marriage?).
  23. Most male Echo Boomers expressed a lack of interest in conversations about marriage while most female Echo Boomers were more receptive in talking about marriage (What Does Generation Y Say About Marriage?).
  24. 75% of Echo Boomers stated that they would prefer to be alone for the rest of their life than marry the wrong person (What Does Generation Y Say About Marriage?).
  25. Median income of individual Echo Boomers is $22,000 as of 2010 (How Much Money Do Echo Boomers Make?).
  26. Echo Boomers favor more government than other American generations (source).
  27. If Echo Boomers could, they would drive less than they do now ("No Vehicles Please. We're Echo Boomers.").
  28. Echo Boomers are more likely to want other transportation options than other American generations ("No Vehicles Please. We're Echo Boomers.").
  29. Echo Boomers see technology as a way to socialize instead of face-to-face methods (source).
  30. Echo Boomers are more likely to drive less for environmental reasons than other American generations ("No Vehicles Please. We're Echo Boomers.").
  31. Echo Boomers use email less than Boomers (source).
  32. Wireless access to the internet is rising among Echo Boomers (source).
  33. 33% of Echo Boomers are not covered by a health insurance plan (source).
  34. Echo Boomers' trust in public institutions is declining (source).
  35. While some view Echo Boomers as more "leftist" in their views, they do not hold the traditional leftist views (source).
  36. 52% of Echo Boomers rank being a good parent as a major priority (source).
  37. Only 20% of Echo Boomers list owning a home as a major priority (source).
  38. While only 21% of Echo Boomers are married, 34% of Echo Boomers already have kids (source).
  39. The average Echo Boomer remains at a job for 1.5 years (source).
  40. 80% of Echo Boomers have used an online service in the past 30 days (source).
  41. 33% of Echo Boomers have used mobile services in the past 30 days (source).
  42. 48% applied for a credit card online (source).
  43. Wealthy Echo Boomers prefer digital online media over Television, radio, and print (source).
  44. More Echo Boomers are going to college than ever before (source).
  45. In 2008, approximately 40% of Echo Boomers aged 18-24 are enrolled in college (source).
  46. The average Echo Boomer spends $30 per mall visit (source).

Fallacies: Data and Anecdotes

Before I delve into the daily grind of publishing data, statistics and stories of Echo Boomers, I wanted to discuss a slightly controversial topic in statistics concerning what constitutes evidence. I enjoy data and statistics as much as the next person, and tend to view anecdotes and stories as "fallacies" that often paint a false picture. But, can there be a defense to someone who uses anecdotes?

To give the reader an example of why I dislike anecdotes, I'll use a popular example of one concerning an Echo Boomer. A while back the NY Times ran a story about a girl with $100,000 in student loans. Of course, one individual buried in $100,000 of student loan debt is not quite the same as the title implied: "Placing the Blame as Students Are Buried in Debt."

After reading the article, a reader might think that American students are overwhelmed by student loans. But look at the Millennial financial data, American Echo Boomers between the ages of 18 to 31 hold an average of $6,857.64 with the median at $0.001. You saw that right - over half of Echo Boomers between the ages of 18 to 31 have no student loans whatsoever. It would be hard to believe that the average student Echo Boomer has six figures of college loans unless we assume two things: the debt is higher for the 18 to 25 age range, and/or a significant portion of students are not within the Millennial age range2.

So why did they write such an extremist article at the NY Times? Because the media love extremes, and their anecdotes often paint those extremes as the norm, even though they are quite far from the norm. We can castigate the media for actions such as the listed article, but readers tend to find these extreme stories interesting. I mean, think about it: a student Echo Boomer who has $10,000 in debt is not near as interesting as someone with $100,000 of debt.

As a blogger and a consultant, my main goal is not to write interesting stories that twist data, but to report the data of my findings, even if it's boring and average. Frankly, most things are. I will, however, use anecdotes from time to time, as they are interesting, but I aim to use anecdotes that are closer to the picture. In other words, I have no problems with writing about the college students who have $10,000 to $20,000 in debt because, in my experience, this resembles the norm.

I may write about the exceptions from time to time, but I will acknowledge who these people are. Sure, I've talked to an Echo Boomer who held over a third of a million in wealth, and it was fascinating. But I knew as I talked to him that he did not portray the norm. Writing about those individuals all the time, while interesting, tends to mislead people into thinking that major extreme are banal in the financial world, when, in fact, they do not.

Remember that the majority of anecdotes should be about people the data points to, with a few exceptions scattered here and there. That's why, as I blog, you should always keep your eye on my data post. That post is more accurate than anything.

1 Notice in this image that only 16 Echo Boomers possess more than $100,000 in debt out of over 1,400 Echo Boomers (presently as of March 2010) in the sample. That is approximately 1.14% of the population of Echo Boomers. So even if we assume that the portion of Echo Boomers, who are students, have much more debt than their peers, the mean and median would be nowhere close to six figures.

Generation Y and Money

Brief How Do Echo Boomers Manage Money (data-only version)

Overview

As I write this introduction, many people are pondering what the future holds for the United States: we have increasing levels of debt, high perpetual unemployment, and a major generation about to retire. The purpose of this blog is not political or even social, but exists to communicate the economic and financial situation of Echo Boomers. What does the future hold for the United States, and how will Echo Boomers affect this future?

I have spent half a decade working for a large financial institution at a call center, beginning in simple customer service and moving upward in the financial consulting industry. The financial institution services over a third of American consumers, and I speak with an average of thirty-five Americans per work day. These American customers call from anywhere in the United States or throughout the world. Although the financial institution services some foreign customers, the bulk of our customers are U.S. citizens (partially due to the Patriot Act and the extra identification required for foreign consumers).

I realized a few years ago the opportunity I had to conduct studies for college classes because I had no control over the calls that came into our center. People could call from anywhere and could be anyone. I also noticed that we speak with quite a few non-customers as well daily, so any study, using callers, would be completely random with the exception of those too young to have any financial accounts.

My first couple of small studies that I conducted tested various sales techniques with callers. For instance, does using the word "feel" as opposed to "think" in a sales' phrase increase sales (answer: yes)? After my small studies, I saw an opportunity for a large study about Echo Boomers. I had focused on communicating with young people at my job and learning what sales' techniques worked with Echo Boomers. As an Echo Boomer, I have always been somewhat fascinated by how other young people, my age, managed their financial resources. Eventually, this curiosity got the best of me, and I began obtaining data from Echo Boomers - their liabilities, assets and goals.

There were multiple advantages to studying the Millennial financial data. Because I work at a large financial institution, on certain calls (loan applications) we have access to credit reports to verify information. Also, since many Echo Boomers call for help, they open up about their financial problems and standing. I am a believer that a sales person cannot help a customer unless we know (1) the customer's goals and (2) where the customer stands in their life.

Echo Boomers demarcate themselves quite easily from their peers as they don't mind answering survey questions, opening up about embarrassing financial situations, or even telling you stories that your grandparents would slap you silly for telling. I enjoy talking with Echo Boomers because they are honest and open about things other generations would never provide (especially financial information). On top of that, it's a blast to build relationships with them and help them succeed in a financial manner.

Why Study Echo Boomers

Echo Boomers are the second largest American generation, depending on when you date them (sources will place them anywhere from the late 1970s all the way up through 2000). This study only studies Echo Boomers born from 1980 to 1993, a significant American demographic.

Since Echo Boomers are a large generation, future supply, demand and economic possibilities will come from them. However, much of the future supply, demand and economic possibilities will be predicated on how Echo Boomers manage their financial resources. For an example, if Echo Boomers have little saving, how will a rise in a homeownership occur in this generation? Thus knowing a lot about Echo Boomers will help economists and financial analysts predict the outlook for the United States.

How Data Were Obtained

Method
One of the many advantages of being in a que-based call center is the lack of control concerning calls. As a financial consultant, I was unable to control the type of customers that I received, and the ages varied. Because my interest rested with Echo Boomers only, I dismissed anyone outside the target range of age. Most of the calls were from existing customers, and their information, such as date of birth, social security number, and accounts, was present in our system. These calls offered no problems because I simply obtained the date of birth on the basis of what the system said. On occasion, however, a few non-customers called and wanted assistance on sundry services, but had no information in our system. As I built rapport with these customers I asked them, "About how old are you?" Without any problems whatsoever, every customer told me. Therefore, the survey was not limited to my financial institution's customers, as many of our callers were from other banks and were considering changing service.

Measures
"Echo Boomer" Definition. When I use the term Echo Boomer(s), I am referring to an individual born between 1980 and 1995. However, due to the age range at the time of this study, I only studied those born between 1980 and 1993. I also want to add that I use Millennial as an adjective (ie: Millennial financial data) and Echo Boomer(s) to refer to the actual demographic (ie: Echo Boomers have ...).
Social Categories. At the present time, the major social categories are U.S. born Echo Boomers and foreign born Echo Boomers. I have also divided the data by birth and gender, but for now, the posted data on this blog only reflect the above two categories.
Financial categories and definitions. The two primary concerns in my study were assets and liabilities. The definition of these terms may vary in financial classes, but are quite simple for my study. Assets included only checking/savings, investments, retirement, and money-based securities . Automobiles, homes, and rental properties were dismissed as assets, but included as part of the question, "Are you currently a homeowner?" Liabilities included loans limited to personal lines and loans, credit cards, student loans and auto loans. Mortgage balances were not included in liabilities. Debts owed to the IRS or collection agencies were also excluded from liabilities. Thus, anent liabilities, this study understates the debt of Echo Boomers.

Criticisms of the Study

  1. Married Echo Boomers presented a few problems since they viewed themselves as one person in a financial matter (ie: "We have ten thousand dollars in retirement"). I treated married Echo Boomers as separate indiviuals by dividing their assets and liabilities in half. As far as I know, the legal system would treat them the same in the situation of divorce. I should also note here that few Echo Boomers were married. I would estimate that fewer than three out of ten Echo Boomers were married, thus this problem was infrequent.
  2. Mortgage debt, collection debt and medical debt were eliminated. Few Echo Boomers were able to provide an estimate of these figures. I eliminated these categories early on, as the only debt Echo Boomers could elucidate on was credit card debt, student loan debt, auto loan debt, and personal and equity loans and lines. This, however, means that the study undercalculates the liabilities of Echo Boomers, though it also be of note that fewer than 11% of Echo Boomers are homeowners.
  3. During this study, credit card laws changed. Since the laws changed for younger Echo Boomers, that made it difficult for them to obtain access to credit cards. This should be of note as I expect to see young people with less debt concerning credit cards.
  4. Echo Boomers, who were not homeowners, didn't necessarily rent. One aspect of this study I realized after I was a few months into it was that close to half of Echo Boomers lived with relatives without paying rent. That information might be a reflection of the lack of financial sagacity and responsibility of many Echo Boomers, or a reflection of how financially arduous it is to live in some states (ie: California). In hindsight adding that category may or may not have helped provide information on Echo Boomers. In the 2011 portion of the data, I added the category "relatives" which translates into living in a place with no cost. If someone lived with relatives, but paid rent, they would be under the category of "rent." Thus, relatives is free-housing.

The Data

Comprehensive Generation Y and Money (long version)

This page now features multiple sets of data, including housing, financial, marital and employment. This post will update from time to time as more data are collected.

Important Note: As of July 2011, I resigned from my company (Wells Fargo). I have completed the Millennial study (approximate time 1.5 years) and compiling the final numbers, which the readers can review. As of now, housing, retirement and employment updates are all complete.

Housing Data (complete)





Financial Data (compiling)

Demographic Make-Up of Survey




Liabilities of Echo Boomers








Assets of Echo Boomers




Financial Data of Echo Boomers




Financial Distribution of Echo Boomers


Marital Data (no updates from this study, but updates from outside sources)



Other Generation Y and Marriage Posts:
Will Low Marriage Rates Sap the Housing Demand?
Will Marriage Become A Minority?
Will Student Loans Lower Marriage Rates?
Another Thing Generation Y Doesn't Like: Marriage
What Does Generation Y Say About Marriage

Employment Data (complete)



Employed: this category means that an Echo Boomer is receiving money for work of some kind. It may be under the table (not taxed) work, it may be part time work, or it may be flat out illegal work (drug dealing, prostitution, et cetera). But if Echo Boomers state that they are receiving pay for any kind of work, they are considered employed.

The government and most research organizations do not share the same definition. This means that my study will always have a lower unemployment rate than those organzations since someone receiving unemployment while working for "under the table" cash would be employed.

Unemployed: Echo Boomers who are not working.

In School: Echo Boomers who are in school only and doing no work on the side. In other words, Echo Boomers who babysit or mow lawns on the side while in school would be In School and Employed category.

In School and Employed: Echo Boomers who are in school and also receiving money for some form of work.

Stay At Home Parent: an Echo Boomer who does not work for money. This does not mean they don't work (as parenting is work), but that their partner financially provides for them and they don't receive any money directly for staying at home with children. Keep in mind that a parent who reports being "stay at home" while babysitting other people's children would be considered Employed.

No Echo Boomer can be a part of two categories; they are limited to one.

How Do Echo Boomers Manage Money?

Comprehensive Generation Y and Money (long version)

This page now features multiple sets of data, including housing, financial, marital and employment. This post will update from time to time as more data are collected.

Important Note: As of July 2011, I changed professions and am no longer collecting these data (though, I am now collecting data through Twitter and other social media sites). I have completed the Millennial study (approximate time 1.5 years) and am compiling the final numbers, which the readers can review. As of now, housing, retirement and employment updates are all complete.

Housing Data





Financial Data

Demographic Make-Up of Survey




Liabilities of Echo Boomers








Assets of Echo Boomers




Financial Data of Echo Boomers




Financial Distribution of Echo Boomers


Marital Data



Other Generation Y and Marriage Posts:
Will Low Marriage Rates Sap the Housing Demand?
Will Marriage Become A Minority?
Will Student Loans Lower Marriage Rates?
Another Thing Generation Y Doesn't Like: Marriage
What Does Generation Y Say About Marriage

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