For those that don't know, allow me to paraphrase wiki: 'A baby boomer is a person who was born during the demographic Post-World War II baby boom between the years 1946 and 1964. Described as a "shockwave", because of the sheer force of its numbers, the boomers were a demographic bulge which remodeled society as it passed through it.
I recently listed our house in Florida and thought, even with the economy going the way it is, I'm living in a micro-climate that might actually be ok, despite the glut and the hidden bank owned glut, and thought this might be be a good place no matter what. Boomers still want to retire and move to Florida. It's still genetically programmed into them:) There is nothing to do here. Thats why they come. (It's an easy bar to meet:)
Yet I haven't really thought it through yet. Is it going to affect any of you? How will it change what's going on?
It's going to affect all of us
http://www.cbo.gov/ftpdocs/88xx/doc8877/Chapter3.6.1.shtml (Social Security projections).
I know, I know - that's obvious and you're probably thinking more in terms of unexpected and less obvious consequences, but for what it's worth....
The number I was really looking for is the ratio of retirees to working people, which is falling precipitously. It's one of the reasons the US must be open to immigration.
It's worse in countries that are not open to the idea that their citizens can come from anywhere - Japan is facing a demographic crisis if they can't redefine what "Japan" is. Europe is somewhere in between.
The US and Canada have some advantage in that our identity is less tied up with race. Yeah, I know, that's a loaded statement - I'm not saying Americans are less racist, but my experience living in Europe is that it's easier for us to see someone as "American" even if they look "Chinese" or "Indian" or whatever. Look at pictures of the British military and the US military from when both were heavily in Iraq. See the difference? Even though Switzerland has a way higher proportion of foreign-born residents than we do, I found them less able to see them as "Swiss".
So that simple demographic fact in the developed nations - rising life expectancy in the face of falling birth rates - means that when the boomers get old, the weight it places on the working population will be tremendous.
Meanwhile, as the boomers move into Alzheimer's age, we're looking at economic catastrophe. We spend $172billion/year (or $150 billion, depending on the source) on Alzheimer's care currently. That will rise to 1 trillion dollars by 2050. Yet less than 1% of spending is on research to do something about it.
- http://alzheimersweekly.com/content/national-alzheimer-s-project-act-wins-congress-approval
- http://alzheimersweekly.com/content/national-alzheimers-strategic-plan
The costs of these trends will impact us all... It's going to affect our taxes, our health care systems, our immigration policy and will pour over, clearly, into politics and into the amount of money we as a society have for strategic work - infrastructure, research, etc.
The problem, of course, is that everyone is going after that elderly market and, short of a the small number who will actually come up with something that stops alzheimer's, most will have limited value add.
Meanwhile, I think the trick is to simply figure out what will work in a society where so few people actually work, where so many workers were born in a foreign country, etc.
Disney should redefine 'retirement' and package that right up into some sort of retirement mega-plex. Totally self contained assisted living, complete with golf courses and shopping and movies:)
Quote from: dogboy on February 06, 2012, 03:04:07 PMIt's still genetically programmed into them:) There is nothing to do here. Thats why they come. (It's an easy bar to meet:)
I think this is the marketing equivalent of a common investor error (one that cost me a lot at the dot com bust). Basically, in the mid-1990s, I thought that while a given internet venture might come and go (Amazon and Webvan), those who built the infrastructure (Cisco) and the tools (Macromedia) would profit no matter what happened to the fly-by-night companies. Granted, I had been dead broke until 1998 and had never invested in anything, so I was completely naive. You all know the rest of the story.
My point here is that I made the biggest, most obvious blunder: I failed to understand that everything that is already publicly available is priced into the market.
So it has been common knowledge for many years that we're looking at a ballooning of the geriatric set as baby boomers age and that, in general, many of them will be looking to move to somewhere warm. This is the observation that, for example, fueled the Mayo Clinic retirement plan to offer medical services in only two places - the Mayo Clinic in Minnesota and at a satellite facility in the south (Arizona, I believe).
The Florida real estate boom was fueled by this same demographic observation and that knowledge about the growing number of boomers is now built into the market. So you're still facing the problem that there's an oversupply of housing in the US. It's not simly about interest rates, economic downturn or any of that. It's about demographics.
Quote from: dogboy on February 06, 2012, 04:41:55 PM
Disney should redefine 'retirement' and package that right up into some sort of retirement mega-plex. Totally self contained assisted living, complete with golf courses and shopping and movies:)
Okay, one other trend that is less talked about -- boomers have been terrible savers and they are being squeezed by 1) children who move back in wth them and 2) parents that they take care of.
I look at my parents' retirement, based on stable pensions, a healthy social security system and a stock market that inflated their 401Ks just as they hit retirement age.
I don't think the massive number of golfing, shopping and dining out seniors is what we're likely to see in the future. Sure, there will always be peopel like that. There always have been. But I look at my mother's parents who, in most ways, were of a higher economic class than my parents, yet their retirement was more modest.
You have to realize that retirement as we've known it for the last 25 years or so is an anomaly. Longer life expectancy, slower stock markets, and lower savings rates all add up to
1. "Retirement" that involves at least part-time work into fairly advanced old age.
2. Old age that involves less expendable income - less golf, fewer restaurant meals.
3. Less mobility? Not sure about this, but given #1 and #2, I expect that #3 will be a consequence. To the extent that they will be mobile, a lot of that will be determined by the need or desire to follow their children.
So I would say the untapped market that I'm not hearing about will be goods and services for working people in their 70s.
>everything that is already publicly available is priced into the market.
I think you are talking about an ideal market with perfect information, not the market I see. The market I see is so screwed up and twisted by manipulation and monetary policy it's increasingly hard to decipher the real meanings of things, let alone extrapolate to very unique situations compounded by 'booms'.
Florida is a very unique state. It is different than most, and even more confusing is that it is also more complicated than most. Forget about Orlando and anything up North. That's not a great area. I'm writing this poolside on another endless summer day, down in South Florida. But don't get Lauderdale confused with Miami either, because there are an insane number of ultra expensive condos down there that have charts that just aren't found in Nature and not forecasted by the market... look at the chart here for this condo: (see attached)
...my point is that for my house looks totally different, but still on a significant upturn. I'm not sure else in the country you are seeing this but my house is UP about 20% since the low... a little less than I paid for it. Maybe that was planned too? If so I'm the ignorant one:)
>retirement mega-plex
I see this whole system much cheaper and infinitely more appealing than other options. The problem with florida housing is that what is available is not senior friendly. They teeter between little townhome communities and hospitals. Imagine a little mini town with a clinic they could go for healthcare, groceries, pharmacies, entertainment, restaurants... they could offer delivery service, managed care, transportation, rental cars, etc. all powered by private businesses.
I see it being a model for business and society:)
Quote from: dogboy on February 06, 2012, 06:22:15 PM
>everything that is already publicly available is priced into the market.
I think you are talking about an ideal market with perfect information, not the market I see.
I suppose that's true, though what I was really talking about was my own bitter experience in my failure to at least account for the fact that most widely available knowledge is priced into the market. I should not have said "everything" and I did not mean to imply that it was *correctly* priced into the market.
I'm just highlighting the problem with seeing a trend that foreshadows great growth and thinking that correlates with a growth in opportunity, because if too many people have already seen that opportunity, it could easily be a saturated, albeit growing market.
Similar phenomenon when I was in college - yep, there was a growing need for computer scientists, but not to the extent they were being produced (during the downturn of the late 1980s).
QuoteThe market I see is so screwed up and twisted by manipulation and monetary policy it's increasingly hard to decipher the real meanings of things, let alone extrapolate to very unique situations compounded by 'booms'.
Certainly true with housing right now. I'm not sure we have any idea what correct valuations are expect, of course, when something actually sells.
QuoteI'm not sure else in the country you are seeing this but my house is UP about 20% since the low...
Not totally clear, but there were two sales on my street in the last month at very high prices. Based on appraisals (meaningless if you don't have a buyer, but at least it's better than pure fantasy) we were getting close to an 80% D/V last year (down from less than 60% D/V a few years before), but I think we're back near 65% once these sales record.
QuoteImagine a little mini town with a clinic they could go for healthcare, groceries, pharmacies, entertainment, restaurants... they could offer delivery service, managed care, transportation, rental cars, etc. all powered by private businesses.
Sun City? Someone from Sun City was talking my ear off last summer about their community model. I think it's close to what you're talking about, but I'm not certain about the ability to segue into more managed care.
I've seen a lot of Boomers working because they want to. They start a little business they never would have before because they had family to support. And I'm seeing a lot of Boomers take the RV out and live around the country.
I think Boomers will work longer, but doing things they like. And, I don't think they will be the "move to Arizona/ Florida" like their parents did...that's what 'old people' do.
I presume that the US is moving the same way as the UK in this, we have a lot of age targeted clients (insurance, finance esp retirement plans, charities targeting legacies etc) and it doesn't look like the people getting older now will follow the same model as their own parents. These are the people who grew up with punk, rock and roll and a very different attitude to any previous generation. They don't wear elasticated clothes and holiday in the same place every year, and they probably don't think some place with nothing to do is a nice place to retire :)
But I think a lot of them will end up looking after grandchildren, selling houses and downsizing so their kids can have cash earlier, part caring for parents etc. That might stop them moving but there has to be new opportunities in there if you can find them.....
>"move to Arizona/ Florida" like their parents did...that's what 'old people' do.
>they probably don't think some place with nothing to do is a nice place to retire
...well, I'm going to beg to differ. First, when I said 'nothing to do' I mean't there is no 'Industry' here.... there is no 'work'. You want to play golf or tennis 365 days a year? Take out your fishing boat on Christmas to just check out what's going on? How about take your grandkids to the beach? We have more coastline than any other other State, so that's not a problem. Go out to eat? Shop like a rock star? Down here we have the stupid rich... and we have the service industry. This place is a 'destination' and that means it's a money funnel. It's also your new gateway to Latin America. Just recently Miami/Lauderdale was rated one of the most expensive places to live, behind LA. so if you think we just have a bunch of empty condos down here, think again. If you want a good deal, they have a bunch of townhouses up in the middle of nowhere surrounded by swamp, you can probably find cheap, but anything South of West Palm and this place is in high demand by people of leisure and wealth.
So I think you might be surprised with how many people may decide they want a second home or condo down here, for those miserable months up North. I didn't even put on a jacket this winter. And to be honest, we don't even need American baby boomers down here, boomers from around the world are coming here as well. My point is, there is a certain percentage of boomers that will move down here, and as they get older and older, they are going to want an easier climate. I think it's family and jobs that keep people where they are, and if you take away the job, depending on the place, you take away the real reason to live there. Plus, as these people age, they don't want to take care of the house, shovel snow, etc. They will look for help. Later as their health fails, they will need care themselves. In the very end, they will end up in a place that looks like a hospital...
That leads me to my megaplex idea... I didn't mean to say that your 65 year old parent is ready to go for a quick bingo game before they wonder off to die in solitude, but those people in 10 years that want more help and assistance, but can't afford totally private care @$15k/mo, the idea of a self contained community may be just the ticket, allowing for cost sharing, better service, and more independence. For example, there are a bunch of retired people with cars down here they barely drive. They need a car once a week and less in a self contained community. Why not share cars? You need a car? Call the concierge and have one dropped off out front and billed to your room. Need a nurse, there are 5 that live in your condo rent-free that are on call to service you.
Yeah, I would probably paint the walls of my house with my brains before I moved into one, but I still see that setup being profitable for the complex while being of great value to its residents... and far cheaper and preferable overall than dumping them off at a foreclosed townhouse in an orlando suburb, with a map, and a gas station with a 7/11 down the street and wishing them luck. Ask anyone that has had to deal with managed care and I think they will tell you its insanely priced and not satisfactory, and they feel bad about putting their parents in them because they are more like insane asylums and jails, than a fitting place to spend the rest of their days.
there are some retirement communities that go some way to that, aren't there? The ones in the UK are probably more trying to recreate the village experience than actually have nurses 'on call', but I think the're becoming more and more popular.
Retirement communities, assisted living, Alzheimer's care these are going to be huge.
The phrase used for Dogboys community here tends to be "assisted living". Huge boom area here. I've done some work in the area (weirdly both before and since being part of this industry)
OK...a "Second home" is different than "moving everything to Florida or Arizona" which is what I was talking about.
The "old people" of the past moved everything to Arizona. And that is what I don't see baby boomers doing.
And I do think it is different for different parts of the country: people in the Central US tend to stay put. There is no question my folks will live in Russell Kansas until the day they die around the age of 101. (And probably work until the day they die as well...but I think that is more 'farmer mentality' than anything else.)