00:00Are we going to end up with a lot more older adults who are driving the economy?
00:03Their spending is the engine of this economy?
00:06Not necessarily. I would think of it as with each generation that comes along,
00:10they've got different priorities and they do spend differently.
00:13I think what I would do is focus on more the aging of the population.
00:18And the demographers believe that people are 65 today
00:22and developed countries with good access to health care are going to live into their 90s.
00:30That's not even, you know, children that are born today where they believe
00:33more than 50% of children born today will live to be 100.
00:37We have more clients than I can count that are in their 90s, that are over 100.
00:45And so what we've been focused on is when we are living longer, which is a great thing,
00:51what do we do when people that would normally inherit in their 40s, in their 50s,
00:57and use that to buy a home or pay off their mortgage or put their kids through college?
01:02What do they do when they're inheriting in their 60s and their 70s?
01:06So we have to think about wealth and transferring wealth in a different way.
01:10Because as we live longer, we might have different chapters of ourselves in the labor force.
01:16Right.
01:16We might pass on money beforehand.
01:19We might do a lot more generation skipping.
01:22Planning, financial planning has to change overall.
01:24It's become a lot more complex, hasn't it, to plan for your finances, to plan for a transfer of wealth,
01:31especially since you're saying different stages.
01:33It might happen early on and then it might have to happen again.
01:36Yeah.
01:36And what I've been telling clients that I've been meeting with, because on the wealth side of the business,
01:42it's very personal conversations and they're very hyper-personalized.
01:46And so, you know, as an economist, yes, the equity market is going like gangbusters.
01:54Everybody's seen their financial wealth increase.
01:56But it's still the case that the bulk of wealth creation in the U.S. is generally through home ownership.
02:04And you've got a generation that is just shut out of home ownership.
02:08So we talk about it taking a village to raise a child.
02:11It takes a village to buy a home.
02:12And so just helping the next generation, you're sitting on the wealth.
02:18It's compounding.
02:19A lot of people don't even realize how much it's compounding.
02:22By the time they retire, they think they're retiring with a few million dollars and they find that they're retiring
02:27with $10 million.
02:28And they had no idea that that was coming.
02:29And they had no idea.
02:30And so give it to your children.
02:32Help them buy a home, that first home.
02:34Help them start to create wealth that way.
02:36So the other thing about the people who figure out that they actually have a lot of money,
02:39oftentimes that's women because they tend to outlive men.
02:43What do we know about how women approach saving and spending that's different than men?
02:48It is different than men.
02:49So we have more than $130 trillion in wealth transfer that's coming.
02:54More than $50 trillion of that will go to women first.
02:58Exactly what you said.
02:59It's not our fault.
03:00We live longer.
03:01So and they behave differently.
03:05We find that they are much more apt to invest in philanthropic activities and impact investing.
03:13And they just move through the world differently.
03:15They are more involved in education and health care.
03:19Oftentimes the oldest, and it happens to be female in the family, the oldest child, is the caregiver for the
03:27aging parents.
03:27And so they've got different priorities.
03:30And so we try to do deep dives into understanding how women invest differently so we can prepare our financial
03:36advisors for that coming wealth transfer.
03:40And we're starting to see that already take place, and it's only going to accelerate in the next 20, 30
03:44years.
03:44It is.
03:45And I'll tell you what's really interesting that's coming up in conversations as well is that in 2008 with the
03:50financial crisis,
03:52we were really worried.
03:53We, economists, were really worried about millennials.
03:56millennials, because in social economics, we believe that your entire lifetime earnings is determined by where we are in the
04:04business cycle when you graduate.
04:05Right.
04:06It took them so long to get jobs.
04:08But you look today at new data from the Fed, and if you take the median age of a millennial
04:13today,
04:13they are very much better off than baby boomers were at that age, than Gen X, my generation, was at
04:21that age.
04:22Because of the stock market.
04:22Because of the stock market and the accumulation of wealth.
04:24So they've caught up.
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