The Baby Boomers Grow Up {2003]
IBecause they are such a large, homogenous group, the Baby Boomers have always had a huge impact on society.
When they needed schooling the government built schools, then polytechnics and universities. When they wanted to drink beer, breweries prospered.
When they wanted to shop, malls appeared.Now they are the wealthiest group in society - at the peak of their earning power and with an accumulation of personal wealth as yet unrivalled by younger generations.
Banks have made fairly good profits from them, but most Baby Boomers don't seem to want to get too sophisticated about the way they use their money.They invest primarily in things they can see while continuing to consume intangibles like time, energy and fun.
Time is highly valued by 35-54 year olds. They are attracted to the idea of making every day count and they enjoy diverse experiences. Though many of them still have dependent children, they travel overseas more than people in other age groups (47% in this age group travelled overseas in the last 12 months, compared with 36% in the age groups on either side).
Baby Boomers have always been a great resource for commercial interests (especially the building industry, since whatever they've done seems always to require new buildings).
As more of them cash out of their urban lives, property values increase in the so-called "lifestyle areas" and trades people from surrounding regions are attracted there to cope with the latest building boom.
That's not the only form of reconstruction going on. It's a good time to be in any profession that helps keep sub-optimal bodies going - doctors, opticians and cosmetic surgeons are obvious ones but dentists, hearing aid specialists, day spas, beauty therapists and personal trainers are also making a dollar or two out of this group.
It's also a good time to be providing leisure opportunities and great experiences - from restaurant food to theme park holidays. Many Baby Boomers are in a position to pay well for offerings of high value to them.
When you share an ideology about making every day count, the greatest value you can get comes from regular brilliant, shared experiences - especially with loved ones.
All this consumption is great for the economy. This generation can do a lot as consumers for the leisure industry and the medical profession, among others.
But what New Zealand really needs is for Baby Boomers to start flexing their investment muscle in positive ways. As creative and passionate investors they are potentially even more important to the future economy than they are as consumers.
If they can be persuaded out of just buying dearer houses and making everything more expensive for the people coming along behind, Baby Boomers may be able to provide a lot more of the "angel" type investment necessary to help new enterprises to flourish.
The more this investment is geared to local strengths, the greater its impact will be.
For example, more rigorous and purposeful investment by Baby Boomers in their children or in private equity investments is a useful "win-win" way to help younger generations, while also building one's own retirement wealth.
At the simplest level, we note the irony of the government charging relatively high interest rates on student loans while their parents and grand-parents struggle to raise a regular 5% after tax on their own investments.
There would be value too in encouraging this generation to become self-consciously passionate promoters of (and investors in) the lifestyle regions they favour, rather than just passive squatters. Northland could certainly do with the help.
As they sit back in their chairs a little further, this generation may become more attracted to making safe but useful investments in the kind of infrastructure (in the broader sense) that will help improve New Zealand's future performance - to get that feeling they love of being a part of the action without having to do anything too far outside the comfort zone.
The key thing is to get them to relinquish enough control to realise that doing things their way is perhaps not the optimal way of generating the best return on investment. It is more useful now if they transform their slightly desperate down-aging into respect for the spirit of the next generation, rather than simply recreating endless classic hits.
As creative and passionate investors they are potentially even more important to the future economy than they are as consumers.."What New Zealand really needs is for Baby Boomers to start flexing their investment muscle in positive ways"
