Should this be what Boomers are doing?
ANALYSIS
“OK Boomer … you were right all along”.
You won’t hear anyone utter those words, but, credit where it’s due, those all-knowing Boomers might have been onto something.
A study revealed this week that the over 65 generation now possesses wealth of $6 trillion.
The research, by the Bankwest Curtin Economics Centre, looked at the distribution of Australia’s net wealth by age group. The $6 trillion held by Boomers in housing value, superannuation balances and financial assets made up nearly a third of the nation’s overall wealth of $18.4 trillion.
Not bad for 17 per cent of the population.
A staggering $2.8 trillion worth of real estate was the dominant storage of wealth for the over 65s, whose overall wealth has risen by 840 per cent since 2002.
All that time they were scrimping, saving, darning their socks and refusing to eat avocado at cafes (looking at you Bernard Salt), their wealth was building.
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Demographer Bernard Salt once wrote about younger generation’s ‘avocado’ cafe habits. Picture: Alan Barber
While they were scoffing over the top of their instant coffee mugs at all the millennials paying $5 for a latte, their mortgages were approaching completion and, now, finally, they are unencumbered by debt and sitting back getting wealthier as interest rates rise.
They must be meeting over dinners at hatted restaurants and planning exotic holidays or intrepid adventures in far flung corners of the world, right?
They should be. They’ve earned it. They spent decades working hard to pay off modest homes at often exorbitant interest rates.
It’s not their fault home prices have shot up to their least affordable levels in history and young Aussies are giving up on the Australian dream.
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Rather than toasting their wealth, most Boomers are bunkered down looking after grandkids.
Boomers didn’t create a cost of living crisis, or send the price of oil skyrocketing.
Why should they care if the generations that come after are struggling?
Well they do care, and thank goodness for that.
See, Boomers are heavily invested in younger generations. Their kids and, more importantly, their grandkids are currently mired in a struggle that they are worried will only get worse.
The vast majority aren’t frivolously spending their money or sitting around whiling away their afternoons with long lunches.
They have their sleeves rolled up and their backs bent, helping look after their grandchildren because their own children have to work long hours at two jobs just to stay afloat and can’t afford childcare. They are digging into their pockets for school fees, sports registration and music lessons.
They are driving around in awful traffic helping drop the grandkids at school, or weekend sports.
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They are staying put in their family homes because, not only do they need the extra bedrooms to have family visit, but they want to make sure they stay in the market for as long as possible before downsizing and eke every bit of wealth out of their homes to give to their families.
After all this time, they are still careful with their money and it’s a good thing too, because we need them to be.
The bank of mum and dad is one of the nation’s biggest lenders. And it charges zero interest.
It’s the one bank that we should be wishing endless wealth and prosperity on, because many of us are its shareholders.
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