Baby Boomer Investments – the Path of Financial Security Towards Debt

Oh dear. I’ve got myself started on my favourite topic. Baby Boomer investments and the nasty wake up call that happened in 2008 – and let’s face it, is still happening.

So let’s start with the good times. The Baby Boomer generation had opportunities that – as far as I can tell – no other generation of people have ever enjoyed. They started work when money was still under control; their salaries went up by pretty huge percentages every year – and they bought houses when houses cost very little.

Then they sold them and bought bigger ones. Then they decided they could invest in houses, buying to make profit rather than to live. So they banked on their big salaries and bought large properties at the top end of the market. They bought second home to let out.

And then the world (financially speaking) ended. Suddenly job security was a thing of the past. Baby Boomers were unable to sell the properties they’d bought to make their money back – and were living in their investments for too long, bleeding money away on massive mortgages. They started losing work and defaulting on payments. Within three years, those investments were selling off for half of their original price or less. The Baby Boomers were losing money hand over fist, downsizing to live in places with affordable mortgages and losing all of the capital they had tied up in the properties in the process.

So what now for the Baby Boomer? What now, in fact, for the world? We are still mired in financial crisis, which, let’s face it, is only going to get worse before it gets better. There will soon be even more unemployed people, a lot of whom are the Baby Boomer’s children or grandchildren – placing yet more financial strain on a generation that had it all and lost a lot of it very quickly.

There are no rapid answers to such a huge reversal in fortune. There are some good bits of advice though. Number one of which is, don’t invest. Investment is basically a form of betting and the golden rule of betting is, you never bet a sum you can’t afford to lose.

In other words: investments only make sense if you don’t need them. Investing money in order to make money (which is what got us all into this mess in the first place) is not sensible. When it goes wrong, it ruins lives. It can destroy whole countries – as we are seeing right now.

So perhaps the best advice I can give to all the Baby Boomers out there who have lost big time in the economic collapse of the world’s Western countries, is: learn from this. Don’t think that making money from money is a good idea. When it works it is wonderful – but when it doesn’t it is catastrophic. Money is for spending on things you need – food, a home, clothes. It is not for betting with, unless you have the cash to do that in the first place.

It’s a hard lesson but it’s true. The rich say rich and everyone else muddles along. At least that’s the way it should be. What happened to the poor old Baby Boomers was they got told they could get rich too. They saw money signs in the thing that should have provided them the most security of all. Their house. A house is for living in. It’s for keeping you safe and warm. It is not a way of turning a little bit of money into a lot. Try that and you bet your family’s future on a market that – as we have seen – you can’t predict. 

About the Author:

The above article is composed and edited by Shannen D. She is associated with many finance communities including A and E Expert as their freelance writer and adviser. In her free time she writes articles related to pay day loans, financial security, etc.