For the past 85 years, the financial services industry - banks, financial planning, insurance and stock brokerages have experienced double digit growth by cajoling frightening individuals by the prospects of poverty and lack during retirement. Everything from radio, televisions commercials and print ads projected the bleak prospects for retirement if individuals did not save and invest. Individuals born between 1912 to 1945, currently ages 60 to 93, responded to this marketing strategy as they experienced the pain of the Great Depression.

The Great Depression caused the largest economic slump in industrialized nations ever. The Great Depression began in 1929 when the stock market collapsed. Stock market values dropped eighty percent. Not only did individual investors lose big, so did the banks. Many banks had a large chunk of stock in their asset portfolios. So much so that 11,000 banks out of 25,000 collapsed in the U.S. alone. Individuals lost on three fronts. They lost money in the stock market, in the bank and their jobs. The burgeoning manufacturing industry saw a 54% drop in output causing 25 to 30% of the workforce, approximately 12-15 million people, to go on layoff.

With so many people out of work, breadlines and soup kitchens became common place. People had no money to feed, clothe or house themselves. Unfortunately, the government did not have the resources to help them either. The impression of the Great Depression has been firmly imprinted on the minds of individuals, ages 60 to 93, born 1912 to 1946. Most have vowed to themselves they would never again suffer the lack they suffered during the Great Depression. Hence, these individuals are frugal; budget conscious savers who disdain credit and speculative investments. They sought the safety of guaranteed investments and the security of insurance companies who weathered the Great Depression. With the evolution of Federal Deposit Insurance Company (FDIC), they spread their money across several banks. Although they have money in banks and stock brokerages, they do not really trust banks or stock brokerages. They trust FDIC and SIPC (Security Investor Protection Corporation).

The financial industry evolved around the financial behaviors of these Depression Era individuals. These individuals amassed the greatest amount of wealth in the history of the United States. Because they were solely afraid of suffering another Great Depression.

The financial behavior of the Depression Era individuals is exactly contrarian to those born 1946 to 1964. These individuals are called Baby Boomers. These individuals never saw lack. Their mothers, once house wives, worked in the manufacturing industry during World War II. When their husbands returned from the war, many women continued to be employed outside of the home. Her employment brought new affluence to the home. It also brought her into the forefront of financial decision making. Women, now, influence 80% of financial decisions. After the World War II, The US government created an economic boom bringing new jobs and more income that the US economy has ever seen. Baby Boomers have always seen good economic times. They have never experienced financial lack, financial lost or suffering.

While Depression Era individuals are motivated by the fear of poverty in retirement and the future, Baby Boomers are not as they have never experienced lack, lost or poverty.

Hence their financial behaviors are opposite from the Depression Era individuals. Baby Boomers live lavishly, spending beyond their means on high limit credit cards. They are drawn to speculative investments with potential high returns as they trust risk. Their risk has paid off big.

Unlike the Depression Era Individuals who were natural planners and budgeters, Baby Boomers are not. Even though they are goal driven, they disdain budgets and plans.

The Great Depression taught delayed gratification as many people waited 10 to 25 years to accomplish goals as simple a purchasing a house. Depression Era individuals were already motivated to save and plan. All they needed was investment product education. The entire financial industry evolved around product differentiation. Depression Era individuals either bought product A or product B.

Baby Boomers are not motivated to save or invest. Neither are they good candidates for delayed gratification. They had success and wealth instantaneously. They earned more than their parents and grandparents. Wealth always seems to be available, so why plan for it. Baby Boomers live the good life without worry that it would be replaced by an economic depression.

Baby Boomers want the good life. They will not sacrifice the good life for retirement or the future. However, they are open to purchasing name brands luxuries at a discount according to Ira Mayer, famed marketing guru.

If Baby Boomers concentrated on Future Spending Plans, they could locate additional dollars to invest. For example, a family can easily spend $50,000 dollars a year on luxury items including travel. With discounts, they could reduce their expenditures to $35,000 a year saving $15,000 on product purchases. Normally, sales tax on the $50,000 dollars of products would be in a range from $3,000 to $7,500 depending upon the state they are living.

The family with the original budget of $50,000 could save up to $22,500 each year. Over 10 years that savings could accumulate to $298,000 or $643,000 assuming. The larger the savings generated from discount purchases, the larger the investment accumulation can grow. This accumulation can be used to live life more lavishly as it brings a certain peace of mind.

All Future Spending Plans should begin with access to luxury products at a discount. The internet has sites such as www.livinginstyleonline.com to perform that task. So Baby Boomers stop planning for future retirement and Live Today In Style.

Footnotes

Canada.com News 2/21/05 Article Investment Attitudes vary by Generation

Cleveland Plain Dealer 10/31/04 Article First Generation

Ira Mayer50+ Generationwww.epmcom.com

Marketing to Women

Encyclopedia Britannica Great Depression History

www.livinginstyleonline.com

Ida B. Byrd-Hill is the President of Uplift Inc.and http://www.livinginstyleonline.com She was the President of The Harvard Group Wealth Management L.L.C. for 10 years. She created investment portfolios, insurance plans and residential/ commercial financing. She has served as guest columnist for the Michigan Front Page for 2 years and a speaker for the Better Investing television show hosted by David Chilton, author of The Wealthy Barber.