Looking at Our Economic Future Through Our Past
A reflection by Wayne Wagner Jr., ChFC
Today I have an optimistic take. I want to talk about why I think the next 10-20 years of the American economy and the global economy are going to be absolutely unbelievably positive. Despite the current volatility and fears we're facing, I'm still willing to bet on a bright future.
Right now, we're worried about increasing interest rates, inflation, stock market glitches, and a little bit of choppiness in a stock market. However, there are things going on globally that lead me to believe that the next 10- 20 years are going to be unbelievably positive (economically speaking) both in the US and the world. So let's get started in a few areas.
This is going to be a little bit longer article because I want to talk a 30,000 foot view of our economic future. If you're busy, feel free to press play on the video and do some classic multitasking...
The Long Term Impact of the Baby Boomer Generation
First of all, we are seeing a demographic shift. When I talk about demographics, demographics is a study of large population groups. I want you to think about American history from 1946 to 1964. There were 76 million baby boomers born.
America did everything from creating Gerber baby food and Pampers to feed them and clean them, to building the majority of our elementary schools, middle schools, high schools, and university expansions to educate them. We then sent them off into the workforce.
While they were in their teens and twenties, we got the ‘60s and ’70s and massive social upheaval. We got abortion on demand. We got Roe v. Wade, which dropped population growth in the 1970s. The 1970s, my year, Generation X, was the lowest birth-rate decade of the last hundred years in American history, all driven by that progressive movement of the ‘60s and ’70s in the social upheaval.
The Gen X Wave Sees Economic Growth
But then that group - the 76 million baby boomers came of age in the ‘80s and ‘90s. They had their children, raised their children, built the suburbs - the economy exploded. We won the Cold War, defeated the evil empire of Russia and the Soviet Union.
The stock market hit all-time highs. We had the tech advancement that led to the tech bubble in the late ‘90s, as you all remember.
The Reign of Millennials
Demographically speaking, the millennial generation is now moving from their college and progressive years. They're having kids, buying houses, getting their little piece of land to put a fence around. If current trends continue, they are going to move back towards the center of American politics. With 81 million millennials, they will economically trump the financial moves of the baby boomers.
That’s why in America, I think this is the front-end of a significant surge. I think the nation moves back to center, politically speaking.
The bottom line is that I think the nation moves back center politically and towards fiscal responsibility.
A More Emotionally Intelligent Economy
We've learned a lot of lessons in the last 40, 50, and 60 years about how to do this better - how to have a better business enterprise. We don't need strong unions but we don't need uncontrollable business. The economy is getting more intelligent and technology is just going to continue to keep grinding us forward.
The World Market Is Opportunity-Rich
Economically speaking and demographically speaking, you also have massive populations in China and India that will come on board creating bubbles of economic opportunity. Demographically, Africa is the youngest continent at this stage and the opportunities there are huge.
So I think the next 10 to 20 years are just unbelievably uncontrolled growth to the upside, but it's not to say we're not going to have negative years. It's not to say that we're not going to have fluctuation in the markets.
Planning for the Future
So what do we see when I look towards the national and global economic future? I see good principles continuing to anchor smart planning.
When it comes to your future, we're making sure we're protecting the short term, the near term "3/5/7" years’ worth of cash flow always (maybe a little more than that as you enter into retirement).
Beyond that, we should be investing your long term money for the back nine of your retirement years and then really planning to have that money pass on to your children and grandchildren and improve the lives of multiple generations of your family.
Reasons to be Optimistic
I hope this helps you feel good about where you are and where we are economically and as a nation right now, I think there are tons of reasons to be positive at this stage.
We're always going to have fluctuation. There's always going to be things to be afraid of, but the long-term here is that stocks win in the long run. I think that's just a bad gamble betting against American ingenuity and the ability for technology to advance and improve the lives and lifestyles of people globally.
And so in the long run, we want to own stocks. In the long run, we think stocks win and so we will be allocating resources in capital appropriately.
If you have questions on this or any other topic, as always, give us a call. Here at Vizionary Wealth Management, we're always here with perspective for the decisions ahead. Thank you so much for hanging in for a couple of extra minutes on this video update.