Thursday, September 29, 2011

Millennial Males and Real Estate

In the past, I've argued that female Echo Boomers will be more likely to buy a home than male Echo Boomers. And if you review the Millennial housing data, you'll notice that 17% of male Echo Boomers own homes. However, the age range of my study is from 18-31, so what trends are currently happening for the 25-31 age group?

23% of male Echo Boomers are currently homeowners. While that's a minority, it does indicate one of two things: as males age, some of them consider buying a home or the married male Echo Boomers have caved and purchased homes. Recall, that 21% of the Millennial generation is married.

Notice that among male Echo Boomers aged 18-24, only 5% are homeowners.

If you're selling real estate or your job relies on the housing market, I would suggest 3 takeaways from these data:
1. A large portion of married male Echo Boomers will be consumers of housing.
2. As male Echo Boomers age, a few of them may change their mind and buy homes.
3. The middle-class male Echo Boomers were more likely to be homeowners; the wealthy male Echo Boomers were more likely to rent, remain single and report an interest in only renting.

Wednesday, September 28, 2011

Generation Y and the Hook Up Culture

I had a conversation with an individual recently, who asked why I didn't write about hooking up. He pointed out that I had written that Generation Y dislikes marriage, Generation Y likes divorce, and even Generation Y prefers serial monogamy. Yet, I've failed to mention anything about the hook up culture that's prevalent.

For those who don't know:

Hooking Up:

A no-strings attached physical encounter (ie: from making out to having sex) with a member of the same/opposite sex.
Update: I interviewed Susan Walsh regarding hooking up.

Tuesday, September 27, 2011

Generation Y: We Have Dumber Advice For You

"Buy Stocks Because You Have Plenty of Time"

I'm never surprised that the media continue to hire ignorant writers. And if you loved Duh Generation Y, Buy Stocks, you'll also love this ignorance:

But people in their 20s who act like 50- or 60-year-olds with money could be making a grave mistake.
And your defense, Gail?
But in your 20s, you are likely to enjoy plenty of good years in the stock market if you keep adding a little money from each paycheck to your 401(k) or an IRA.
Exactly, for instance, look at the chart below:
Look at all those lucky investors, who bought the Nikkei at 40,000, 30,000 and 20,000! With the Nikkei being close to 9,000, can't you tell how lucky they all feel with their money going nowhere in the last few decades? Of course, Gail, like other "experts," will claim that as long as you are in your 20s, you have plenty of time. I wonder when Gail thinks that the Nikkei will return to 40,000?

I will keep hammering away on this point against the media: the idea that you have "plenty of time" is a flat out logical fallacy in the investing world. You invest money because a good deal exists; no other reason exists to invest. Investing because time is on your side is a non-sequitur. Investing because stocks always beat everything else is a non-sequitur. Investing because financial goofballs ("experts") tell you so is a non-sequitur and appeal to authority.

Investing, by definition, is a business transaction where you seek a return on a deal. Do you buy product X at $1.00 and sell it for $.50? Of course not because you'd be losing money (try it sometime and let me know how long you're in business). But you also don't create businesses because time is on your side, businesses "always" beat everything else, and experts tell you to do so. You create a business when you see value that can be produced for profit in some manner.

Guess what? Investing is exactly the same. You approach investing like you'd approach starting a business. If you do that, you won't experience the "lost decades" and "market panic" that everyone else does.

Never trust anyone who tries to over-simplify the process of investing. Investing, like starting a business, takes work, but it is well worth the work you put into the process. The Chicago Tribune, like Fidelity, Kiplingers and other media love to hire ignorant writers because they all assume you don't have a brain.

That, or their writers don't have brains.

See how easy that was?

Ironic Addition

Fidelity promoted a similar article (my above statement now reads like foreshadowing)!
Starting young also means having more time for your investments to be in the market and potentially grow. That puts the power of compounding on your side, which can be powerful.
While the article contains good advice on money management, time is not why you should invest.

Monday, September 26, 2011

The Internet Beats Dating, Partying, Status Symbols

After a few serious weeks covering Echo Boomers, it's time for a funny article about the Millennial generation.

For Generation Y, the internet ranks as most important, according to an article, over things like partying, dating, going out with friends or even status symbols (like cars). Get this: over half of respondents - college students and young professionals - stated that they could not live without the internet.

And remember that Facebook will assimilate you:

More than one in four (27 per cent) college students will rather update their Facebook account than to hang out with friends.

Note that nine of 10 of these students have a Facebook account — of those, 81 per cent check it daily and 33 per cent at least five times a day.

Mark Zuckerberg must absolutely love this generation.

The funny thing about this is that I still recall the time when the internet was only for nerds. In high school, surfing the internet was "not cool," in the same way that having a website, knowing what "www" meant, or having an email account was "not cool." Yet now, 90% of students have Facebook accounts, and I'm sure that trend will continue to rise across the Millennial generation.

Wednesday, September 21, 2011

"Generation Y, Sell ALL Your Stocks"

Articles like this may unintentionally send the wrong message. Though the author points out:

Some also speculate this headwind could create valuable investing opportunities for younger generations.
I'd argue that it won't look like that and some Echo Boomers might miss the buy opportunity, if you think it would be one (recall, Duh Generation Y, Buy Stocks!). The author is right on one thing, if Baby Boomers begin to sell their stocks in large numbers, expect the VIX to go nuts.

On the flip side, Echo Boomers seem to be reluctant to enter the market, and followed Mish's advice by selling first in the last slide, so Echo Boomers might get a better deal by waiting in cash before buying again. Either way, what's missing in many of these investing articles is the implication that the market is the only place to invest; many Echo Boomers could keep their cash and start their own business.

Tuesday, September 20, 2011

Are We Seeing the Rise of Relationship Quickies?

The Expanding Age of Serial Monogamy

During my junior year at Texas Tech University, I listened to a social psychology professor discuss a new trend that was beginning to emerge called serial monogamy. He pointed out that in the past people married for life, but that as time went on, this lifetime view of marriage had become impractical. What someone needs in their life in their twenties might be very different than what they need in their forties, for instance, and thus we shouldn't expect to see the long term relationships of our grandparents.

And along came Echo Boomers.

So Long Marriage?

Look at the Pew Research Data:

And from my own short study:

Notice that in the Pew Research Data when the age range of each Generation was 18-29, 29% of Generation Xers were married, 42% of Baby Boomers were married, and 54% of the Silent Generation were married. As they aged, 64% of Generation Xers married, 67% of Baby Boomers married, and 57% of the Silent Generation married (notice the large number of widowed individuals in this generation due to its age). Yet 21% of Echo Boomers are married and their current age range is between 16-31. The numbers seem to indicate that the Millennial generation won't marry like its parents and grandparents.

The Millennial generation dislikes marriage, and even if they marry, Echo Boomers see divorce as convenient exit. While traditionalists may bemoan these trends, we are seeing exactly what my professor mentioned: the view of relationships is no longer a lifetime commitment, but a periodic partnership.
Pertinent Side Note:

I've noted 3 major reasons why Generation Y won't marry like other generations:
1. Even if marriage rates tripled, Echo Boomers would still have the highest non-married rate of any generation.
2. Echo Boomers have seen more divorce than other generations and will be more reluctant to marry.
3. Single parents pose a problem for those seeking to marry; how many non-parents will be open to marrying a parent?
Still, lightening could strike. And Echo Boomers may surprise us all by marrying like crazy over the next twenty years.

"Let's [Date/See Each Other/Hook-Up/Move-In/Marry]" ... For Now

Many relationships seem to be based on emotional circumstances today, though emotions often ebb and flow unbeknownst to the one experiencing the emotion. If people base their relationship off feelings solely, and not on logical factors, we should find short-lived relationships no surprise.

"Yeah, I'm married, at least for now. I'm not sure if I'll continue this marriage five years from now," one customer, an Echo Boomer, said when we discussed future financial goals. "To be honest, I needed it at the time because one of my parents died, and opening up to someone made a lot of sense, but not so much anymore." In other words, this Echo Boomer sees relationships as a way to meet emotional needs during certain seasons of life, but as those seasons change, the relationship no longer makes sense.

Some in the Millennial generation are more casual than that, though. "Ehh, I'd just prefer to hook-up for a few months and then be done with it," another Echo Boomer said as we discussed what our hobbies were. "My parents were too unhappy when I grew up and I don't want that." Make no mistake, this Echo Boomer, like others, still sees emotional value in having fun for a while, but exiting when it becomes stable and patterned.

These stories have not been unusual since I started studying the Millennial generation in a financial manner. Relationships come up (in rapport-building questions), and the responses toward major relationships are always casual. Even in a face-to-face manner, Echo Boomers often deny interest in long-term relationships, though this can sometimes be an attempt to play off their desires (a lesson in statistics that many won't teach you in a statistics class is that people are often unaware of what they want and what they do; for instance, people report spending their money in one way, while their bank account shows the opposite of what they reported).

Of course, a few Echo Boomers still report wanting to be married for life. "That's my major goal," one said, "I'm just beginning to doubt that it will ever happen." And for those who actually want a lifetime commitment, they must realize that their peers may not.

What Socioeconomic Trends Do You See In the Future?

Of course, any prediction can fail to come true. Echo Boomers might end up with a higher marriage rate than any other American generation. Or, they may end up with the highest divorce rate. Or they may end up with neither. However, based on the current data, trends and anecdotes, I predict 4 major social trends that will occur:

1. 33-40% of Echo Boomers will never marry (this only pertains to straight marriages; I do not know, if legal, how many gay marriages would occur due to insufficient data).

2. Of the Echo Boomers who marry (60-67%), they will have a higher divorce rate than previous generations. Remember, that subsequent marriages are included in this: if an Echo Boomer marries once, then divorces, marries twice, then divorces, marries a third time, and remains married, that would count as three marriages and two divorces (a divorce rate of 67% for applied mathematicians; 66.66666666% for theoretical mathematicians).

3. Since fewer Echo Boomers will marry, I'd expect that marital problems, like infidelity, psychological abuse and relational conflicts will increase because a large portion of Generation Y will be single. Do single individuals respect institutions like marriage if they are not a part of it (some might, some might not)? Add to that fact that single individuals often engage in different activities than married individuals, but married individuals may still have a mix of married and single friends.

4. Male Echo Boomers will be more likely to move away from cities than former generations of males. To be fair, I've already noted this trend (it also has happened in Japan). At this present time, however, I'd expect most male Echo Boomers to stay in the cities for educational purposes, but post-education, some of them will exit and join rural communities. Now consider that in order to lower marriage rates (among heterosexuals), all you need is fewer members of one gender in a social community.

Any Business Opportunities or Perils For the Future?

Any business that requires marriages to exist, such as marital law, family counseling or engagement jewelry, should be avoided. While those industries may do well with the Echo Boomers who marry, the amount of businesses that will do well will decrease. The industries will become increasingly competitive. In the meantime, businesses that sell products to single female Echo Boomers and single male Echo Boomers will see the most growth.

Monday, September 19, 2011

Is Real Estate For Girls?

In the past, I reported that female Echo Boomers report homeownership as a financial goal more than male Echo Boomers (see Generation Y and Housing for more details). Apparently, some real estate agents are starting to catch on according to an article:

Debra White of Exit Realty Partners says single women are an important segment of the market.

No longer are women, particularly those with college degrees, simply renting apartments and waiting for "Mr. Right" to come along, she said.

Single women, including unmarried mothers, young unmarried, widows, divorcees and seniors are buying homes for themselves and investing in rental properties.
What this means for real estate agents is that profiling customers and business-placing can create better leads, so that your overall workload is less.

3 Tips For Marketing Your Services

1. Think about what single female Echo Boomers buy. If you're a real estate agent, for instance, how do you cross-sell your services in those existing industries? How can you effectively advertise in those existing industries? Do not waste time or money trying to market services in a predominantly male Echo Boomer industry.

2. Emphasize stability, security and comfort. Avoid using numeric terms in the beginning; when selling real estate to females, do not approach it in the same way you sell to males. When I cross-sold mortgages, using "low interest rates" or "rent vs. buy comparisons" were ineffective compared to "your home is your castle" or "a home provides you with stability."

3. Pay close attention to the characteristics of real estate that sells well versus real estate that doesn't sell well. You cannot assume this strategy with males, as they fall on extremes. Females, however, tend to have specific trends they pursue (often, relative to culture). For an example, if you note that hardwood floor homes sell better, find and emphasize those homes to your female customers. Or, you can save time and ask your female customers, "Visually describe the home you're looking for," and record the trends.

Pertinent Side Note:

Married male Echo Boomers often reported that they were saving for a home, but only to appease their spouse. If you're a real estate agent, don't underestimate the influence a spouse will have on a married male Echo Boomer; he's as likely to be a customer of yours as much as a single female Echo Boomer.

Thursday, September 15, 2011

Counterpoint: Generation Y Won't Vote Democrat

For the current political outlook, I've proposed that Echo Boomers will continue voting Democrat for this upcoming election (see Do Republicans See the Importance of Generation Y and Generation Y Supports Gay Marriage for more details). However, a fellow Echo Boomer argues the opposite and he brings up some valid points:

  • The economy, as it currently stands, will be the major issue in all voter's minds, especially Echo Boomers since they have a high unemployment rate.
  • The Democrats have proposed increased spending, which will hurt the economy both now and in the future. Echo Boomers, who've put a large amount of money into a system (like social security), won't receive the benefits from their sacrifice (see Generation Y, You Won't Receive Social Security).
  • The economic outlook for the United States, according to the CBO, is dismal at best. The claim here is that the Democrats are the ones to blame, thus Echo Boomers will see "change" with Republicans.
While he brings up valid economic arguments, the election is still a year from now. Some things may or may not change, but I would be careful before assuming that Echo Boomers will think Republicans are responsible in an economic manner. Remember, that Bush and the Republicans contributed to this mess in a similar fashion that Obama has continued the mess.

We could ask, why don't Echo Boomers find a third party candidate to vote for (notice how the writer only assumes two parties exist)?

Wednesday, September 14, 2011

Will Generation Y Want Existing Homes?

One writer argues that demand for new housing may be on the decline, but I'd argue that in the long run, we may see the opposite from Echo Boomers. There are two major problems with existing housing for Echo Boomers:

1. Many existing homes are too large; they require large energy consumption and many of the rooms are unnecessary. What we see with Echo Boomers currently is that they work to live, and large homes will force longer hours at the office, encumbering their "living" time. Perhaps, as Echo Boomers age, they may want the larger homes, but for now, expect smaller homes to win.

2. Large homes often sell at higher prices than small homes. A higher price indicates more work, and if Echo Boomers choose to value their free time over work time, they'll opt out of the large homes on the basis of price. From a builder's perspective, is it worth building a large home if you cannot make a decent profit margin from it?

As Echo Boomers prepare to purchase homes, we may see a rise of new housing demand in the form of smaller, efficient houses. The new business model will be built around selling homes that cost less, consume less energy and allow Echo Boomers to enjoy their life, as these are the current values of the Millennial generation.

Tuesday, September 13, 2011

Are Echo Boomers Overspending On Food?

The Millennial generation doesn't manage money all that well, or even make that much money, when you look at income characteristics of Echo Boomers, but a new study shows that Echo Boomers love to spend large amounts of money on food and beverages:

Millennials made more than 13 billion visits to restaurants in 2010 and spent more than $73 billion on food and beverages, according to a new market report from The NPD Group, which reveals the diverse generation has varied values, tastes and preferences, and foodservice operators need to offer greater menu variety to attract customers.
According to the “Reaching the Millennial Generation" report, the 52 million Millennials, ages 18 to 29, spend a higher percent of their total foodservice dollars than other generations.
In other words, approximately 65% of Echo Boomers spend more money on food service than other American generations.

Business and Economic Opportunity

If you are considering businesses to start for the Millennial generation, a restaurant is not a bad idea. But pay attention to your demographic, for instance single Echo Boomers, male Echo Boomers and female Echo Boomers. Find out who you want to target and try to create an environment that attracts your target.

A Sign of Poor Financial Skill?

I question the financial sagacity of anyone who spends large amounts of money in restaurants. Even if we assume that only the wealthy Echo Boomers are spending this money (untrue as 65% of Echo Boomers are doing so), I'd still question if going out all the time was a wise choice. Nonetheless, the financial data show 90% of Echo Boomers have less than $2,000 in wealth; more Echo Boomers would have more wealth if they learned to cook their own meals.

If Echo Boomers need other ways to save money, they should read what some other Echo Boomers are doing to save.

Monday, September 12, 2011

An American-Australian Millennial Gap?

A columnist recently complained about Echo Boomers, who choose to remain at home, and noted a trend in Australia:

In Australia, one-quarter of people aged 20 to 34 continue to live in the home of their mostly baby boomer parents, a social researcher with McCrindle Research, Mark McCrindle, says. More boys stay at home than girls.
In the United States, when you evaluate the financial data of Echo Boomers, you see it's the opposite:

In the United States, males are less likely to live with relatives than girls. Keep these thoughts in mind when marketing products or services to Echo Boomers: they differ by country.

Thursday, September 8, 2011

Generation Y Dislikes Marriages, But Likes Divorce

Even though Generation Y dislikes marriage, it has a higher divorce rate than Generation X, a columnist argues:

Whether the description of this generation is warranted or not, statistics reveal that Gen Y'ers are more likely to have shorter marriages that [I'm assuming this word is supposed to be "than"] Gen X'ers and are more likely get divorced than the previous generation.
It's hard to imagine that a generation with a lower marriage rate has a higher divorce rate, but it is statistically possible.

The columnist lists multiple reasons why Echo Boomers hold these views, for instance:
This generation doesn't view divorce as a sign of failure, but simply a choice to be made when a marriage is no longer what they want it to be.
It seems that Echo Boomers also see marriage in a similar way: something that makes sense in a season of life until it no longer makes sense.

I predict that the Millennial generation will approach marriage in a serial monogamist way - a marriage for a period of time, then a divorce, then a new marriage for another period of time. Repeat until death. Of course, one may ask, why not cohabit?

Wednesday, September 7, 2011

Echo Boomers To Credit Cards: Bye-Bye

A recent article points out that credit card usage, among Echo Boomers, has significantly decreased:

In contrast, Millennials, born in the 80s and 90s, changed rapidly over the same 4-year period. In 2007, 44% of the youngest cardholders said they frequently carried a balance, dropping to 34% in 2009 and 26% in 2011.

Many things come to mind when reading this, and the most glaring fact is that attitudes toward credit are changing. We see this mostly with the young generation of Echo Boomers, but this reminds me of an article Mish wrote concerning the changing consumer attitude toward credit:

A year ago only fools saved money. Saving money is becoming more socially acceptable with each passing day. Eventually it will be embraced. Attitudes towards risky lending practices by banks are changing too. I talked about risk aversion by both banks and consumers in Banks Attempt To Freeze Balance Sheets. Changes in social attitudes about debt, risk, and spending, are about to make Bernanke's life miserable. Changing attitudes are exactly why Things That "Can't" Happen will happen.

Tuesday, September 6, 2011

The Echo Boom Bomb Appears In Other Media

I have failed to mention a few media mentions of this blog. The Echo Boom Bomb has been featured in an article from Builder Magazine titled Debt-Ridden Nation Takes a More Skeptical Look at Its Investment in Promoting Homeownership by John Caulfield. The article is excellent for those in the real estate industry, developers, investors and landlords. I also wrote an article a while back for a Focus on the Family publication that members of the Judeo-Christian religious tradition might enjoy, titled Making A Financial Plan.

Generation Y Supports Gay Marriage

What This Means for Politics, Economics and Religion

A new poll found that Echo Boomers see gay marriage as compatible with religion. In fact, the numbers indicate a strong change, especially among evangelicals:

Of the white evangelical millennial Christians, 44 percent supported the legalization of same-sex marriage – compared to the 12 percent of evangelical senior citizens and 19 percent of evangelicals overall.
In other words, even among the religious of the Millennial generation, over 2 out of 5 think that same-sex marriage should be legal. The article delves into a few other differences between Echo Boomers and other American generations, and these views will have profound effects on upcoming elections, the socioeconomic structure and religion.


In 5 Moral Views of Generation Y I argued that five common views among Echo Boomers would effect the political spectrum. One of these views is the acceptance of homosexuality, which, in the past, some have fought. However, assuming economic factors don't matters whatsoever (a debatable statement), Echo Boomers will prefer a political candidate who is open to same-sex marriage over another candidate, who is closed. If a candidate is not open toward same-sex marriage, they will need to attract Echo Boomers through other issues.

That being written, in the current political climate, economics will play the largest factor unless something changes.


In Another Thing Generation Y Doesn't Like: Marriage, I write that a large portion of Echo Boomers will never marry (approximately 33-40%). However, with Echo Boomers being open toward same-sex marriage, I will be quick to point out that my prediction only refers to the opposite-sex marriages. I do not know how many same-sex partners will marry or would even if it was completely legal.

While same-sex marriage will alter the legal structure to an extent, in terms of housing demand, employment or city structure, things will remain similar. A gay couple, for instance, will be as likely or unlikely to buy a home as a straight couple.


In Do Echo Boomers Lack Religion, research seems to indicate that some religions, in general, will experience trouble with Echo Boomers, as they aren't as religious as other American generations. To a certain degree, religions market in a similar way that businesses do: they must appeal to the tastes of their target demographics. If religions want to target Echo Boomers, they will either need to leave moral issues on the side, or be more open toward non-traditional moral views.

Monday, September 5, 2011

Did Echo Boomers Change Their Mind?

According to a new study, Echo Boomers might not be that interested in starting their own business (see How Do Echo Boomers View Their Professional Lives?). For instance, in the new study:

•Just 38 percent of U.S. millennials say their career ambition is to run their own business, versus 69 percent of millennials in China and an average of 68 percent worldwide.
Versus the other findings in the Chicago Tribune:
83% of Echo Boomers thought that entrepreneurship would be an important part of their career.
Add to that argument the findings of Echo Boomers and entrepreneurship from Buzz Marketing Group:
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

For those, who are curious if we are about to witness and entrepreneur explosion in the United States or not, a few points to make regarding these studies and articles:

1. Echo Boomers may view "starting their own business" as very different than entrepreneurship. With the legal hassles of starting a business, some Echo Boomers may see entrepreneurship as something they do alone without the legal worry of hiring employees.

2. As the economy changes and times grow harder, some Echo Boomers may give up on their dreams of starting their own business or "going at it on their own." Unfortunately, I can't interview everyone, but circumstances in people's lives change, so this is not an abnormal event.

3. While working for the financial institution, many Echo Boomers reported a desire to become entrepreneurs, and other studies - like the one from Buzz Marketing Group - seems to confirm this, though with a higher percent.

4. I am not surprised that foreign Echo Boomers possess more ambition than U.S. Echo Boomers (as the first study argued). When you look at the financial numbers of the Millennial generation, the foreign Echo Boomers win. They manage money better, but they have more financial desire.

Thursday, September 1, 2011

Does Generation Y Want More? Or Less?

Tuesday, I posed the question, will Generation Y abandon ownership, but an Op-Ed from the Huffington post argues the opposite: Echo Boomers want more of EVERYTHING!

The author argues that Echo Boomers want to "feel good" about what they're doing, and they desire more control over what they're doing. Neither of these behaviors should surprise anyone, as Echo Boomers have access to technology which provides more control to its users. Likewise, the Millennial generation experienced constant praise in school for even average accomplishments (does anyone remember 8th grade graduation? REALLY?).

From a business perspective, control and praise should be the primary focus. Creating products, which earn praise (think social networks), will offer solid profit and success. But on top of that, creating products, which give users more control, will also trump limited products that restrict users.

Of course, these views can overlap to a certain extent. For instance, praise and control don't necessarily come from the big ticket items. Echo Boomers may not want the large house that former American generations wanted, but they want a smaller house that comes with more opportunities (for instance, a smaller home that consumes less electricity, but can still perform many of the same functions of a larger home).