Four reasons you're a lucky generation of investors

[Jon Chevreau]

Based on the ages of people divulging data in the "Introduce Yourself" thread, it seems most of the people posting on this excellent new discussion forum are in their 20s or 30s. Speaking as a 56-year old baby boomer, I'd like to say I envy you for several things:

1.) The new Tax Free Savings Accounts. Clearly, many of you see this as a centerpiece of your retirement planning 20 or 30 years out. The boomers had nothing like this: just non-registered investments: the gift that keeps on giving (to Government tax coffers) every time you crystalize capital gains or receive dividend or interest income. Yes, we had RRSPs but they're taxable in the end game and the more we have in Defined Benefit pensions, the less we could stash in RRSPs.

2.) The boomers paid inflated prices for stock for the last 20 or so years. You guys get to buy in during an historic bear market, at far more reasonable prices than we ever had.

3.) Internet tools. You have a wealth of web-based free resources, from social networking sites to online news feeds to online discount brokerages to forums like this one.

4.) Exchange-traded funds (ETFs). Another investment product that didn't exist when the boomers started out. You can build tax-efficient (if non-registered) portfolios with very low costs.

That's my short list: i'm sure there are others.

www.wealthyboomer.ca

[ShowMeTheMoney]

Yes, and in my day I had to walk 30 miles, over huge snow banks to deposit my one dollar saved that whole year . Yes, these young'ones have it soooo easy!!!

[Rickson9]

Originally Posted by Jon Chevreau

Based on the ages of people divulging data in the "Introduce Yourself" thread, it seems most of the people posting on this excellent new discussion forum are in their 20s or 30s. Speaking as a 56-year old baby boomer, I'd like to say I envy you for several things:

1.) The new Tax Free Savings Accounts. Clearly, many of you see this as a centerpiece of your retirement planning 20 or 30 years out. The boomers had nothing like this: just non-registered investments: the gift that keeps on giving (to Government tax coffers) every time you crystalize capital gains or receive dividend or interest income. Yes, we had RRSPs but they're taxable in the end game and the more we have in Defined Benefit pensions, the less we could stash in RRSPs.

I agree. Big benefit.

Originally Posted by Jon Chevreau

2.) The boomers paid inflated prices for stock for the last 20 or so years. You guys get to buy in during an historic bear market, at far more reasonable prices than we ever had.

I strongly agree. Huge benefit.

The only similar time I can think of would be to be in your 30s during the 1974/75 bear market. That was an amazing time!

Originally Posted by Jon Chevreau

3.) Internet tools. You have a wealth of web-based free resources, from social networking sites to online news feeds to online discount brokerages to forums like this one.

I agree. Big benefit.

Originally Posted by Jon Chevreau

4.) Exchange-traded funds (ETFs). Another investment product that didn't exist when the boomers started out. You can build tax-efficient (if non-registered) portfolios with very low costs.

I disagree. No benefit (to us).

[takingprofits]

Originally Posted by Rickson9

The only similar time I can think of would be to be in your 30s during the 1974/75 bear market. That was an amazing time!

Unfortunately, we boomers were not in our 30's during that time. The majority of us were just out of our teens and had just finished school and were attempting to find jobs or begin careers in that bear market. We did not have any money to invest yet.

[The_Number]

Yes I also noticed that many of us who introduced ourselves tend to cluster around the late 20s and early 30s, and I partly agree (but partly disagree) with Jon about whether or not our generation (What are we? The tail end of Gen. X or the front end of the Millenials?) is "lucky."

It is true that we are blessed with all the tools that Jon mentioned, and there is no doubt we are benefiting from greater general awareness of financial knowledge (compared to 20-30 years ago).

But at the same time, I am highly aware of the societal shift in treating retirement from societal responsibility to personal responsibility. You can see this shift more dramatically in the U.S., but Canada is seeing some of the same trend (e.g. replacing defined benefit plan with defined contribution plan). So, in one sense, many of those wonderful tools Jon speaks of are there as a result of the arguably not-so-wonderful change. The news coverage of this recession (again more so in the U.S. than in Canada) is making us see some of the results of the eroding social protection, and it's not a pretty sight (If you don't swim, you really sink.)

[Sampson]

More on societal shifts.

Our generation is also much more subject to rampant consumerism, the lowest savings rates in history, lower real take home earnings, fewer pension plans, and we are about to inherit some BIG BAD debt.

Obviously this does not apply to many of us on this forum, but I sure have a lot of peers with not a cent to their name, and no plans to get there.

[DAvid]

I wonder if the Boomer's parents are the best off. A relative & accountant of that generation once described his generation as "stepping on the bottom step of the golden escalator." They grew up post WWI, benefited from the huge increases in the economy generated by WWII, and kept going! The ride was pretty much non-stop. That generation will (and has) transferred a HUGE wealth to the next generation, because they were workers, savers, and investors. They were borne in an age when telegraph was the means to move information around the world, and now interact with their grandchildren on the other side of the globe using live video in the comfort of their den.

[takingprofits]

As a boomer I can agree with that one.

Boomers' parents keep reminding us what financial geniuses they were to be blessed with 6% 25 year mortgages and high interest on their safe bank savings (10% was considered low). They could save a lot because they paid a pittance for their homes and mortgages and their savings multiplied quickly because of the high interest rates.

Boomers on the other hand couldn't save because we were paying 18 and 20% mortgage rates. We had no money left for consumerism

[Canadian Finance]

I couldn't agree more. I'm 31 and plan to take advantage of all these points.

I would add a 5th one... mortgage rates. Getting a good rate now for the next 5 years will allow me to pay off my principle quicker, which in turn leads to more savings and investments.

[beyondfunds]

I would say we will also benefit from the lesson that six sigma events like the internet and credit bubbles are possible, and that diversification does not just mean buying stocks from different countries, or a bunch of equity mutual funds.