Friday, July 29, 2011

June Generation Y Total Assets Update


Males Females All
Average $5,404 $2,323 $3,598
Median $0.00 $0.00 $0.00
Standard Deviation $22,639 $14,809 $20,403


Median asset value for male Echo Boomers remained unchanged, while the average slightly increased. Median asset value for female Echo Boomers also remained unchanged, while the average slightly increased. For all Echo Boomers, the average value of assets (such as savings and retirement) decreased 5.64% from June. Given that the average debt increased 1.75% from June, and the average value of assets dropped, the average wealth obviously decreased. Of course, when we look at the median, we see no changes.

The main negative of this update is that over half of Echo Boomers have no liquid financial assets.

Thursday, July 28, 2011

July Generation Y Total Debt Update


Males Females All
Average $10,012 $10,608 $10,819
Median $1,000 $3,000 $2,690
Standard Deviation $21,527 $20,620 $21,821


Median debt for male Echo Boomers remained the same, while the average slightly increased. Median debt for female Echo Boomers remained the same, while the average debt decreased. For all Echo Boomers, the median and mean debt increased.

As you can see, more than half of Echo Boomers have debt. But the debt fails to be large or worrisome. While Echo Boomers may face economic challenges in unemployment, the dismal financial condition of Echo Boomers (concerning debt) is overstated in the media. Sure, a few Echo Boomers have a lot of debt, but the median of $2,690 is much lower than how media tend to portray.

Wednesday, July 27, 2011

July Generation Y Employment Update

The following post contains one image; if you cannot see the images (Benzinga readers on occasion), click on The Echo Boom Bomb to view them directly on the blog.



The employment rate for Echo Boomers failed to change from June. The data came back exactly the same from last month, even though I expect more Echo Boomers would be unemployed. If you have questions about the category definitions, you can read details on Millennial employment figures to understand what constitutes each category.

Tuesday, July 26, 2011

July Generation Y Retirement Update

The following post contains three images; if you cannot see the images (Benzinga readers on occasion), click on The Echo Boom Bomb to view them directly on the blog.





Retirement accounts for male and female Millennials decreased 2%. As I wrote last month, since some Echo Boomers are enrolled in college, I would expect fewer than half of Echo Boomers to have retirement accounts. However, only 22% of Echo Boomers saving for retirement seems indicative of a generation that lacks the habit of saving. This, of course, compliments the other financial data: namely that Echo Boomers don't save or have much money saved.

Monday, July 25, 2011

July Generation Y Housing Update

The following post contains three images; if you cannot see the images (Benzinga readers on occasion), click on The Echo Boom Bomb to view them directly on the blog.





Millennial male home ownership decreased 2%, with male renters taking the increase. There was no increase in Millennial males living with relatives. Among Millennial females, living with relatives increased 2%, the loss coming from Millennial females renting.

Among all Echo Boomers, no changes in housing happened.

Friday, July 22, 2011

"How Do I Complete A Rollover?"

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance for 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 have some retirement assets with former employers and wondered what is the best way to rollover my retirement accounts?

Excellent question: there are 4 steps to completing a rollover while ensuring that you receive what you desire.

1. Locate the appropriate firm. Whether you choose a firm based on fees, investment selection or current convenience, find a firm that you want to rollover your retirement assets. Firms like T. Rowe Price, Fidelity or WellsTrade are examples of firms that have retirement accounts.

2. Contact the firm. Call or visit the firm and let them know that you want to complete the rollover. In most cases, they'll suggest that you call your former HR department or retirement department to have checks mailed to the firm (don't worry, they'll give you an address to mail to). In a few cases, however, they may be able to complete a transfer directly from your retirement account to theirs (in this case, however, they may need some special information from you). Note that the second case is quite rare.

3. Contact your former company(ies). Call your former company(ies) and let them know that you want to rollover your retirement accounts to the new firm. They will guide you through the process usually by asking what address and if you have the new account numbers for the retirement rollovers. In some cases, they may mail you the check(s), which you will forward to the firm you selected.

Note that this step may be skipped if the new firm can complete the transfer for you

4. When the money is received, choose your investment selections. The easiest step of them all! Sadly, your new firm may not have the same investment selections as your retirement account(s) at your job. However, you can find other investment selections that you prefer, or choose similar selections.

Thursday, July 21, 2011

Do Republicans See the Importance of Generation Y?

With election season coming in a year, the media may highlight the importance of Echo Boomers (see Generation Y and the 2012 Election). In fact, one Republican strategist, Margaret Hoover, gets it. The Millennial may be experiencing buyer's remorse with Obama as some of them have not seen increased economic prospects (according to the article).

What Hoover understands about the Millennial generation highlights the importance of the generation for any political party:

  • There are 80 million Echo Boomers (close to 25% of the total population).
  • Echo Boomers have the highest unemployment rate of any American generation.
  • 66% of Echo Boomers voted for Obama in the last election.
  • 55% of Echo Boomers still favor Obama.
  • 24% of the total electorate are expected to be Echo Boomers.
  • Echo Boomers still favor large government.
Probably a major point that Hoover makes: Republicans, in order to win Echo Boomers, must ease up on social issues. Echo Boomers, at least for now, are a socially liberal generation (see Generation Y and Sex and 5 Moral Views of Generation Y for more details). To be fair, young people of all generations tend to hold socially liberal views.

Wednesday, July 20, 2011

Will Generation Y Bring Back Entrepreneurship?

Like the Greatest Generation, Echo Boomers face a dismal job market even though many of these young people hold college degrees. A recent article highlights some of the hurdles and even success stories of the Millennial generation. One of the many positive developments is that some Echo Boomers are opting out of corporate America and going it alone.

Starting your own business at one point was the American dream in the United States (think early 1900s). For whatever reason, over the last 30 years, corporate America seems to have grown larger and larger with the old American dream being supplanted by "owning your own home" as the new American dream. Apparently, many Americans lowered their expectations of themselves. Echo Boomers, who typically are stereotyped as having high self-esteem, may be adjusting to reality and trying things on their own ( seeHow Do Echo Boomers View Their Professional Lives?).

Some other highlights of the article are Echo Boomers finding work that's related to the profession they want. For instance, if you want to teach but there are no teaching jobs, tutor. Finding closely related fields to your ideal field will help you build experience so that you can land on the path you want.

Monday, July 18, 2011

Generation Y Opts For Free Rent

The following data covering the Millennial choice for housing might seem to imply that Echo Boomers are an irresponsible generation when it comes to finances (see Generation Y Housing Update for more details).



However, a recent article from the Vancouver Sun seems to argue the opposite: Generation Y stays at home to save more money so that they have more financial opportunities in the future. The strategy of staying with parents to save money has good merit from a financial outlook. There is no reason to pack up unnecessary bills if you can avoid them, and building wealth while in your twenties is the key for a successful future.

However, the article seems to imply that Echo Boomers live with their parents to save money. If you revieve the Millennial financial statistics, the amount of money that most Echo Boomers have saved is very little. As far as Echo Boomers being opportunistics, that seems to be a general human trait and opportunities differ from generation to generation.

Friday, July 15, 2011

Products and Services for Single Male Echo Boomers

5 Areas To Consider

Single male Echo Boomers have performed quite well (see What are the characteristics of wealthy Echo Boomers?). They tend to have wealth, and they tend to have specific interests, meaning that marketers can target this demographic with cross-selling (challenging to do when a demographic's interests are fluid). The following five areas should be the focus.

1. Video Games

A growing industry, which performs well among single Echo Boomers in the low income bracket. These Echo Boomers lack the financial power of the other male Echo Boomers, and thus use cheaper forms of entertainment.

2. Sports & the Outdoors

Whether you are looking at fitness or outdoor activities, like hiking, single males tend to seek out these areas. For outdoor activities I would focus financial effort on things like hunting, while for fitness, things like Crossfit, Strongman, et cetera tend to perform quite well for men.

Keep in mind, the cross-selling potential here is massive: single males, who work out, tend to also spend money on nutrition and supplements. These other "necessities" make these hobbies profitable.

3. Survival Gear

Some single male Echo Boomers are "out of city" types (ones who move out of the city to be alone), and some are just interested in survival itself. Think about selling products that maximize a person's sustainability without others. For instance, power generators will sell to this group, or livestock.

This is a growing demographic among male Echo Boomers; as I discussed financial goals with males, I noticed the trend of young men wanting to exit modern civilization.

4. Financial Products

Single male Echo Boomers possess more wealth than their female counterparts. They are more likely to have retirement accounts, own homes and have brokerages. Obtaining business from these single males will be important if the financial industry is where you hope to make money.

5. Topical Blogs

This references advertising and marketing, as topical blogs do not always make good businesses. But how do you reach single male Echo Boomers with your products and services? Advertising and market your product on blogs. As an example, you can review the demoprahics on one of favorite blogs, Calculated Risk. Notice the percentage of males/females; males tend to read topical blogs, while females tend to read personal or self-help blogs. Obviously there are exceptions, but if you are spending money on advertising, you want to play in favor of the statistics.

Always review demographics if you have questions.

Thursday, July 14, 2011

Products and Services for Single Female Echo Boomers

Six Services That Are Selling And Will Continue To Sell

Among single female Echo Boomers, businesses that specialize in the following six areas will see the most growth. Outside the medical and school systems, which will always be profitable institutions, these areas will help capture the single female Millennial demographic.

1. Home Security

Safety and security are a primary concern of single females, especially Echo Boomers. In sales, the phrase "safety and security" works seven times better for single females than it does for single males. I've spoken with several individuals in the home security industry, and their dominant demographic: single females (one of them told me that married males will buy home security, but her customers were seldom single males). Female Echo Boomers are no exception here; they'll want home security for a place they rent (if allowed) or own.

2. Real Estate

One third of female Echo Boomers express interest in owning a home someday. I would expect that as more single female Echo Boomers become homeowners, more single Echo Boomers will want homes (in other words, we'll see a rising effect as more homeowners influence other potential homeowners). If you look at the current data (below), you'll see that the growth potential here is quite high. Recall, that Generation Y is the second largest generation in American history.

3. Fashion

One of the common jokes about living in West Texas (ie: Midland) was that you never knew who were the wealthy men of the area. You could be talking to a man in worn-out jeans, a dirt-covered jean jacket, and old boots, but the man had 9-digit wealth. Not with women. You knew which women had money because of one word: fashion.

Females of all generations tend to spend large amounts on fashion. And since the fashion world constantly changes, any fashion business you build will have a never-ending crop of customers who constantly need something "new." Could you ask for a better business?

4. Photography

After spending several years speaking with business owners, I learned from photographic studio owners that their major customer were females. Although a low marriage rate might imply that there will be a lack of interest in photography (no family photos, wedding photos, et cetera), single female Echo Boomers will still buy photography for their children (remember single mothers are a profitable group), or various life events, like special parties with friends.

5. Religious material

Religious organizations offer the opportunity to cross sell products, such as DVDs, books, et cetera. Material published for single females may have more success among Echo Boomers than Xers or other generations. Of the Echo Boomers I speak to, when reviewing accounts, females are more likely than males to purchase items at religious stores or donate to religious organizations.

6. Travel

Single female Echo Boomers express interest in travel more than single male Echo Boomers.

Wednesday, July 13, 2011

Economic Demand From Single Echo Boomers

Preview and Background: Who Will Win, Who Will Lose?

Since Generation Y will have lower marriage rates than former American generations (see Another Thing Generation Y Doesn't Like: Marriage for more information), economic demand for products and services may begin to change. I've covered this in other posts, yet for someone in the business world, what will be the products to sell to single Echo Boomers?

Male and female Echo Boomers spending behavior is quite different. In the five plus years I've worked in the financial industry, and reviewed spending on credit cards and debit cards, male and female behavior tends to operate in spending patterns, but seldom overlaps. These spending patterns offer marketers, advertisers and PR consultants a key insight to what products to sell and how to sell them.

By contrast, other studies - outside of my own - rely on consumers reporting what they consume with their money. Ironically, these studies are seldom accurate, as anyone in the financial industry can tell you - consumers seldom recognize that their actions contradict what they say! I've shown an example of this on my blog a few times: females report wanting to own homes more than males (approximately 33% of female Echo Boomers stated "buying a home" as a financial goal, whereas only 20% of male Echo Boomers state "buying a home" as a financial goal), yet male Echo Boomers are more likely to own homes (currently). The actual behavior is different than what consumers report.

This, by the way, is why you've seen marketers state, "People buy with their dollars, not their words." In other words, a financial consultant has more insight to what products sell than a researcher who uses online polls, focus groups or street surveys.

Thursday, the Echo Boom Bomb will cover what products that single female Echo Boomers want and Friday it will cover what products and services single male Echo Boomers want. There will be no Millennial Q and A for Friday.

Other Important Notes

Dallas/Irving again. Thursday and Friday I will be unable to answer email as I will be in the Dallas/Irving area (school-pertinent). I will try to respond to emails as quickly as possible when I return Saturday.

Most important post. After reviewing the statistics on this blog, the manage money post has received a lot of attention. The problem? That's the short version. Be sure to read the extended version on how Echo Boomers manage money if you have questions as to where the data originate. Any data not specified in other studies, like Pew, Brookings, et cetera has been conducted through my study. I will alert readers if it is from a different study outside this blog.

Tuesday, July 12, 2011

Generation Y and the 2012 Election

The 3 Big Political Issues for Echo Boomers

Last week I covered some moral views of the Millennial generation and how these moral views would affect Echo Boomers' voting in the 2012 election (see Generation Y and Sex and 5 Moral Views of Generation Y). However, if we listed the major issues facing the 2012 election, who would have the advantage with Echo Boomers?

A fascinating article highlights some of the political views of Echo Boomers, but in general, you can see the winners and losers in the big issues among the Millennial generation.

Moral issues: Democrats are winning as you can read in Generation Y and Sex and 5 Moral Views of Generation Y.
Economic issues: No one is winning. Keep in mind, voters tend to view economic issues by how things are presently going. This means that voting can change quickly concerning economic factors.
Global issues: No one is winning. Many Echo Boomers favor isolationist policies which neither Republicans nor Democrats support (see How Do Echo Boomers Think?).

Of the big three, Democrats only possess a slight edge. In order for Republicans to win, they will need to focus on the economic issues, as that will be on voter's minds in 2012. Democrats, on the other hand, will be seen as responsible for the current economy, possibly hurting or helping Obama relative to how the economy looks in 2012.

As far as moral issues are concerned, Republicans will never win with Echo Boomers unless the party opens its stance or Echo Boomers change theirs (both possessing a low probability). Of course, moral issues only become a focus if the economy is doing well. Most people don't care about issues like abortion, homosexuality and sex education if they can't find jobs and build financial security (ie: "People vote with their dollars"). In other words, caring about moral issues is a luxury of people with economic and financial security.

Global issues may be the only way a third party can capture votes from Echo Boomers, as Democrats and Republicans would never favor such policies (update: Nick points out that Ron Paul is non-interventionist candidate; I was under a wrong impression that he would be on the Libertarian ticket, so he is a Republican that some Echo Boomers might support in the area of global issues). That being written, the unpopularity of isolationism among other generations will exclude any candidate with such views.

Monday, July 11, 2011

What Cars Will Generation Y Buy?

If you read about Echo Boomers and their behavior, you might have noticed that they don't tend to buy cars or like their own transportation compared to other American generations (No Vehicles Please. We're Echo Boomers.). Some of this may be related to the environment, the lack of financial resources, or the rise of oil prices making transportation more expensive. But if they do buy cars, what cars do they like?

According to a study, the top 5 brand winners of Generation Y are as follows: (1) Scion, (2) Mitsubishi, (3) Mazda, (4) Nissan and (5) Volkswagen. The bottom five losers of Generation Y? Infiniti, BMW, Chevrolet, Acura and Suzuki.

The Millennial generation is considering price in its purchase, so we shouldn't expect car makers, like Audi, to win over a large portion of the Millennial generation. However, if gas prices continue to remain high or climb higher, Echo Boomers may start factoring in gas mileage over price. That being said, you won't be able to price a car higher just off the basis of gas mileage.

Still, some Echo Boomers will opt out of transportation altogether. After all, they'll save money and won't have to worry about higher gas prices in the future. Car companies have failed with some of Generation Y mainly because they lack the sagacity to produce quality vehicles at a decent price, and have helped contribute to the American dependence on oil.

Popular car brands in order:

Scion (21.2%)
Mitsubishi (20.3%)
Mazda (10.7%)
Nissan (9.8%)
Volkswagen (9.6%)
Kia (9.1%)
Hyundai (8.6%)
Honda (8.0%)
Toyota (7.6%)
Subaru (7.3%)

Wednesday, July 6, 2011

5 Moral Views of Generation Y

And What This Means for the Political World

Yesteray, I wrote Generation Y and Sex highlighting some views of the Millennial generation on things like abortion, gay marriage and sex education. However, Pew Research has a more comprehensive study covering some similar material. I'm a huge fan of Pew Research, so I'll highlight some of their findings, but if you have time, be sure to check it out. When it comes to politics and morality, these views will have profound effects on the way our country looks in the future.

    Highlights:
  1. 52% of Echo Boomers think that abortion should be legal in all or most cases.
  2. 63% of Echo Boomers think that homosexuality should be accepted by society.
  3. 67% of Echo Boomers prefer a bigger government that offers more services.
  4. 55% of Echo Boomers think that religious organizations should express political and moral viewpoints.
  5. 79% of Echo Boomers do not think that pornography should be illegal for everyone.
The main take away here: Obama will remain popular among Echo Boomers from a moral standpoint. However, the 2012 election may be centered on the economy, which means that Obama must convince Echo Boomers his plan will work if he is to win with them again. I agree with Abrams that misunderstanding the Millennial vote and their power in politics will hurt anyone's chance of winning come 2012. This is another reason why Echo Boomers are so important: they have a strong political voice.

Tuesday, July 5, 2011

Generation Y and Sex

How Generation Y's View on Sex Will Influence Politics and Religion

A summary of a study looks at how Echo Boomers view various moral1 issues such as abortion, gay marriage and sex. These views will shape how Echo Boomers vote, how tolerant they are toward religious communities, and whether or not they'll see marriage as necessary. A quick summary:

  • 60% of Echo Boomers support abortion.
  • 82% of Echo Boomers support sex education and access to contraception for females who can't afford it.
  • 57% of Echo Boomers view same sex relationships as moral.
  • 70% of Echo Boomers view sexual relationships between single males and females as moral.
So how does this affect this affect the religious, political and marriage climate? I would expect the following if the Millennial generation continues to hold these views:

1. Religions that encourage marriage and denigrate same sex relationships or discourage sex outside of marriage will lose Millennial members (also see Do Echo Boomers Lack Religion?).
2. The majority of Echo Boomers will vote Democrat, as Democrats tend to be more open toward gay marriage, abortion and sex education.
3. Marriage rates among Echo Boomers will be lower than other American generations (Another Thing Generation Y Doesn't Like: Marriage).

In some ways, the above trends will have compounding effects in the future. If fewer Echo Boomers attend religious services, for instance, that will discourage the importance of religion for future generations. The same is true for politics and marriage.

1I am using their term, not mine. I fail to see how some of these issues can be classified as moral.

Monday, July 4, 2011

Is Generation Y Buying Stocks?

According to Vanguard, Echo Boomers have adjusted their investment allocation. When you read about Echo Boomers and their past preference, they preferred to keep a large amount in cash. However, Vanguard shows that recently the Millennial generation has increased its holdings in stocks.

In 2003, Echo Boomers held approximately 41% of their investment portfolio in stocks, but in 2010 that's risen to 85%. Of course, this study covers the retirement allocation of the Millennial generation, which only 22% of all Echo Boomers have. In other words, the Echo Boomer, who have retirement accounts, are showing a strong preference for stocks.

Friday, July 1, 2011

June Generation Y Total Assets Update

50% of Echo Boomers posses no financial assets - this is no surprise. Recall that Echo Boomers are currently 18-31, so many of them haven't had time to build wealth.


Males Females All
Average $5,349 $2,318 $3,813
Median $0.00 $0.00 $0.00
Standard Deviation $22,324 $14,602 $18,856


As you can see, the standard deviation for male Echo Boomers is quite high (exceeding female Echo Boomers), and this reflects the wealthy Echo Boomers' effect on the male population as a whole (see What are the characteristics of wealthy Echo Boomers?). For those unfamiliar with statistics, the standard deviation tends to explode in value when you have extremes. Of course, in the case of assets, the lowest value can only be $0.00, meaning the large values have made the standard deviation large among male Echo Boomers.