#GreatWealthTransfer #BabyBoomers #wealth #inheritances #EstatePlanning
A few generations back, the parents of Baby Boomers turned, or were about to turn, huge amounts in inheritance to their children or other heirs.
Those parents had built usually modest homes for relatively modest prices, though they didn’t think so at the time. Much of that homebuilding was thanks in large part to the federal GI bill that was passed as veterans came home from World War II to start families and new lives.
Those modest homes increased in value many times over during that generation’s lifetime.
That gave the children of that generation a big chunk of wealth to inherit.
And, many of them did – big time.
Now, the Baby Boom generation has a bunch of wealth to pass on to its children – the GenXers and Millennials.
Wes Moss, who writes a Money Matters column for The Atlanta Journal-Constitution and has a similar weekly program on WSB radio in Atlanta, calls this “The Great Wealth Transfer.”
He discussed it in his column published April 24. 2022.
Moss writes that between $30 trillion and $68 trillion in wealth will be passed down from Baby Boomers.
To put that in perspective, the U.S. GDP (gross domestic product) for 2021 was $22 trillion, Moss writes.
When you take the 136 million people who are GenXers or Millennials, and you use the $30 trillion figure, that would mean each of those folks – statistically speaking — would get $220,000, Moss writes. We know that not everyone will inherit that much individually, and some will inherit much more.
Think you don’t have that kind of money in your family? Moss sites a person with a great aunt who died. The great nephew didn’t realize how much money she had. She was able to give all her great nephews and great nieces a nice chunk of change.
In other words, there could be that kind of money somewhere in your family, and you may not know it until a death occurs.
For Baby Boomers, this lesson brings about the need for proper estate planning. Yes, you may have more than what you think you have. How it gets distributed upon your death, or even before, should not be left to chance – or probate court. It would be worth the investment to draw out an estate plan, such as a will or living trust, to make sure the money goes where, or to whom, you want, when you want.
If you are a GenXer or Millennial, talk to your parents and other family members about how THEY want their estates distributed. Make sure that, if you believe you may have something coming to you, that your interest is protected.
Of course, if there are no heirs or your family members have not shown themselves worthy of inheritance, having an estate plan is even more crucial, so that your money goes where you want.
If you are transferring your wealth, get an adviser you trust to tell you how, when and to whom to give your assets – according to your wishes. Keep in mind that you should do all YOU want to do while alive with your assets. Don’t think about your heirs first. Think of you first.
Remember, too, that how, when and to whom you give will likely have tax consequences. Know those consequences, and what could happen if a mistake is made, well ahead of time.
It’s certainly great to reward loyal, loving family members or other heirs with your wealth. But if you think about you first, and plan carefully, all concerned should be, if not happy, assured that the distribution was done as you wanted it to be done.
Peter
Tag Archives: wealth
RICH COHORT GETS YOUNGER
#rich #young #YoungAndRich #superrich
A survey of U.S. investors with $25 million or more says the average age has dropped by 11 years, to 47 years old.
The ranks of these Americans has doubled since the depths of the Great Recession.
The average age of those with a mere $1 million is 62, a number that hasn’t budged in years.
These figures come from an article by Ben Steverman for Bloomberg. I was also published Jan. 24, 2019, in The Atlanta Journal-Constitution.
About 172,000 U.S. households have a net worth of at least $25 million, The article says. That up from 84,000 in 2008. The study was created by the Spectrum Group, according to the article.
The “vast generational transfer of wealth” is “just beginning,” the article quotes George Walper Jr., president of the Spectrum Group.
The article doesn’t spell out how these folks are getting rich, but here are a few theories.
First, they could have invested well in the stock market, which crashed big time during the Great Recession. A big, universal downturn in the markets creates numerous buying opportunities for those willing to take a chance on them.
Even the casual observer has seen the market go up like crazy over the last decade, so those buying opportunities – at least many of them – have paid off handsomely.
Another theory, as Walper suggests, is that older rich folks are dying, and giving their wealth to their children.
A third theory is a rise in entrepreneurship. Young folks have seen a need, or created a product, that has become very popular. Think Uber, Lyft, scooter rentals in cities etc.
Here’s an area that can make ANYONE rich, who is willing to explore it. You certainly don’t have to create a new product, or meet a need. You just have to be willing to look at ideas that are not necessarily new, but could be new to you.
There are many vehicles out there that can produce wealth for anyone, with any background, education etc. You don’t even need to be a genius. You just need to learn a system and be coachable.To check out one of the best such vehicles, message me.
Amid the doom and gloom you may have witnessed in the last decade, these stats should give you a glimmer of hope. Prosperity is there for those willing to look for it. It is there for those who, rather than wallow in their circumstances, are willing to embrace something new.
And, it doesn’t matter whether you are young or older. You just need to be willing to see something that looks very promising, and go with it, no matter what you might be told is best for you.
Our parents, at least those of us who grew up in more modest households, have told us to look for security, a good job, good benefits and stay there until we retire. That was SAFE.
Yet, such situations today are rare. Few jobs are safe. Few lifestyles are secure. Few futures are certain.
Increasingly, it is up to you to determine your prosperity. Certainly, if you choose certain paths, there are many out there willing to help you. But, you have to DO it.
If you don’t see yourself as young and rich, that’s OK. But think about the life YOU want, and know there are ways out there to get it. You just have to be willing to look for them.
Peter
THINKING ALONE WON’T MAKE YOU RICH
#IWannaBeRich #ThinkingRich #RichMindset #OpenToOpportunities
The duo Calloway sang it best in 1990: “I Wanna Be Rich.”
But, Personal Finance columnist Barry Ritholtz writes that just thinking about getting rich won’t make you rich.
“What’s the main thing that separates the rich from the poor? Ask any of the financially free people, and they will tell you the same: their mindset,” Ritholtz writes in his column, also published in the April 16, 2018, edition of The Atlanta Journal-Constitution.
Ritholtz calls this thinking, “deceptive nonsense … rampant in the marketing materials aimed at gullible and desperate consumers.”
Still, he writes, Napoleon Hill’s 1937 classic “Think and Grow Rich” sold 20 million copies. “In the context of that very difficult time (the Depression era) we can give Hill a pass for reminding Americans of their can-do attitudes and boosting their self-confidence,” he writes.
For the less cynical, people who succeed first have to believe that they can. They have to have a strong “why” that pushes them to do what they need to do.
So the message in Ritholtz’s column should be: put your positive thoughts into action.
As leadership expert John Maxwell has said, the axiom “if you can believe it, you can achieve it” may not be true in all cases. To be a great opera singer, for example, one must not only believe they can be one, but have the natural talent and put in the hard work to hone that talent. Naturally, without the God-given talent – not just the ability to carry a tune — all the belief and hard work you can muster probably will not get you to the Met.
But positive thoughts, and the desire to succeed, are vital to success. Many of us have been engrained to “settle” for security. A good education gets you a good job, which gets you a good life.
But if you indeed want more than that – if you have a dream you believe you can achieve – you have to have your head in the right place.
You also have to be open to opportunities that may be presented to you, and recognize them as such.
There may be folks out there who want more than just security, have a great mindset, but don’t really have the vehicle to get them to where they want to be. If you are among those, there are actually many such vehicles out there. To check out one of the best, message me.
Ritzholtz is correct in saying that there is a whole industry out there that involves get-rich-quick schemes that don’t include hard work.
For some things, no matter how hard you work at them, you’ll never achieve what you want.
But, most of us are smart enough to know the difference between real and phony opportunities.
Some “millionaire mindset” suggestions have value, Ritholtz acknowledges. He cites becoming goal-oriented, living within or below one’s means, using extra money to invest in yourself or the stock market etc.
“You can become rich – but only if you meet or create great demand for a real service or product,” Ritholtz writes.
To shorten his message, think of it this way: “Just thinking or (believing it) does not mean that you will achieve it,” he writes. “Doing, on the other hand, at least gives you a shot at it.”
Peter
THE GREATEST TIME IN HUMAN HISTORY
#dreamers #focus #BrianTracy
We are living in the greatest time in all of human history.
That’s how Brian Tracy, author of “Eat That Frog,” starts his other book, “Bulls-Eye: The Power of Focus.”
The phrase may give one pause, especially in light of fighting in the Middle East, an economy still unkind to many and the many signs of hatred rearing their ugly heads.
Tracy also says, “there is no reason for you not to be earning twice as much as you are today, or even five times as much.” It’s all about clarity, focus and concentration, he adds.
Some may wonder what Tracy has been smoking. After all, the trend in wages is stagnant, or heading downward. Some people had good jobs six or seven years ago, that are now gone. Some are working part time when they want to work full time.
But Tracy says if you are clear about what you want, you focus on your most important goals and activities and concentrate single-mindedly until you have completed your tasks and achieved your goals, there’s no stopping what you can do.
Certainly, as Tracy points out, those who succeed by and large work harder than most, stay committed to what they want to achieve and put most other things aside. But here’s the thing: most of those successful people started out with no special skills or talents. They learned necessary new skills and didn’t give up when others might have.
In short, these folks were no different from anyone else at the beginning.
The next logical step: anyone can be one of those successful people.
Some are dreamers. Your parents may have criticized people they believed were dreamers, equating them with, say, drifters. But really successful people have big dreams, and are confident enough in themselves to do what they need to do to realize those dreams.
Others, as Tracy points out, are merely wishers. They wish they had more money, better looks, more power, but don’t have the wherewithal inside them to go after it.
Wishers give up when the going gets tough. Usually, they follow with blaming someone else, or circumstances, for their lack of success.
Wishers bail on their dreams when others tell them they’ll never accomplish them.
Dreamers keep at their dreams, because those dreams are more powerful than anyone’s opinion of them.
Perhaps you have a powerful dream, the drive to achieve it but might lack a vehicle to get you to your destination. There are many great vehicles out there. For one of the best, visit www.bign.com/pbilodeau. You’ll find some big dreamers like you who’ve done what they needed to do to get where they want to go, from a place similar to yours right now.
It’s been said that there are those who watch things happen, those who make things happen and others who wonder what happened. When things happen, make other things happen that will get you back on track toward your dream.
As Tracy points out, one can start out with nothing. Dreamers will get what they want eventually by learning the skills they need. Wishers will give up along the way, complain of their fate and make fun of the dreamers. Dreamers never quit.
Peter
DEBT: WEALTH VEHICLE AND WEALTH KILLER
There’s good debt and bad debt.
Of course, having no debt at all is ideal, but often, to have what you want in life, you sometimes have to borrow money.
Mortgage debt is among the good kind. As you pay it down, you are paying a part of it to yourself in the form of equity in your home. The more you pay down, the greater the equity. As a bonus, you are living in your house, too, so there’s an absence of rent payments. When your house is completely paid off, you essentially are living there for free.
In this economic milieu, when you sell a house, it’s not an automatic profit. But if you HAVE to sell your house, one of the considerations is that for however long you’d lived in your house, you didn’t pay rent – all of which goes into someone else’s pocket.
College loan debt used to be considered good debt. You were getting money for an education that ultimately was going to lead you to a better job than if you hadn’t gone to college. It made college available to non-wealthy families.
But Carolyn Thompson, reporting for the Associated Press, asserts that student loan debt is widening the gap between rich and poor. Her article ran in the March 30, 2014, edition of The Tennessean newspaper in Nashville.
Thompson’s point: those who came out of college with lots of debt – roughly 37 million people saddled with $1 trillion in debt – will have a hard time catching up with the wealth of their peers who graduated with no debt at all. In short, those from wealthier families, long term, will have a leg up financially on their cohorts that were forced to borrow to go to school.
Looking at the big picture, a college education isn’t what it used to be. Decades ago, a college education gave you a shot at jobs that those who didn’t graduate or finish college wouldn’t get. Companies hired raw brains, and trained them for the jobs they wanted them to do.
Today, some of those degrees we cherished years ago are almost worthless in terms of job opportunities. You may have studied what you loved, or found your passion in, say, the arts, but converting that to economic advancement can be difficult.
Therefore, if you borrowed money to study what you love, or to find your passion, you need to do something to pay back all that debt. Unemployment, or constant job hunting, isn’t going to make that debt go away. Even if you get a good job out of college, as Thompson asserts, you’ll still have a potential six-figure debt out of the gate. Those years it takes to catch up to your debt-free peers may find you not getting a mortgage for the house you want, and having to settle for a lesser lifestyle for a long time. It could keep you from starting young to save for retirement.
In short: if you have to borrow money to go to college, you had better find it all worth it, regardless of what you study. You may come out an expert on Shakespeare’s works, but you could be making a living pouring coffee. Though there’s nothing wrong with having smart coffee pourers, you won’t be paying down your debt quickly, and may have little in savings at age 60.
There are numerous solutions to this problem, besides skipping college altogether. If you are not college material, don’t fret. There are other ways to make money. For one of the best, visit www.bign.com/pbilodeau . You may find a way to earn a substantial income without interfering with your academic loves or passion. If it fits you, and you start before college, you could have a financial leg up on all your peers.
As radio talk show host and financial expert Dave Ramsey might advise: don’t let debt be your financial death.
Peter