Over the next two decades, Australia will experience an unprecedented shift of demographics and finances that will likely be felt by every Australian. Baby Boomers, the generation of people born between 1944 and 1964, are expected to transfer $30 trillion in wealth to younger generations over the next many years. This jaw-dropping amount has led many journalists and financial experts to refer to the gradual event as the "great wealth transfer."

Discuss, rimmers!

Are you still aiming for the lamest thread award? You can have it, I don't want it anymore.

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FormulaNova said..
Are you still aiming for the lamest thread award? You can have it, I don't want it anymore.

You should thank me. I'm breathing life into seabreeze with interesting discussions and topics that affect ALL of us.

PEACE

Could've sped things along a little if we'd just let Covid run it's course

It's also worth noting that most of that $30,000,000,000 is owned by 0.016% of the population so unless the apple falls far from the tree the only effect will be the rest of us becoming a little poorer on scale

It's also worth noting that 99% of statistics are made up on the spot to support the argument at the time.

I read it in a recent article but I just cross referenced against people who own six or more investment properties which is three times as many at 0.06%

$30T huh? How many boomers are there? Say 10 million, which is way overstating it, but it makes the arithmetic easy.
Average assets of $3 mill. Which means that you young'uns won't have to pay our pensions because we are way above the assets test limit.

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kk said..
It's also worth noting that 99% of statistics are made up on the spot to support the argument at the time.

90% of the energy captured on the planet since plants existed has been burnt in the last 100 years, some folks have turned it into money and won't leave much else behind

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Rails said..

kk said..
It's also worth noting that 99% of statistics are made up on the spot to support the argument at the time.

90% of the energy captured on the planet since plants existed has been burnt in the last 100 years, some folks have turned it into money and won't leave much else behind

That's sobering.

I guess it doesn't concern me since there are no boomers in my family. My parents were born well before that period and I was born well after it.

Gina does not share.

Lots of assumptions in the wealth transfer crap not the least being they will not all drop dead together but more likely over the next 40 years plus and a lot can
happen. I am a bit older than a baby boomer and the old man is still healthy and very active so in 10/20 years living beyond 100 may be the norm.
BTW BBoomers are from end of WW11 so 1946.

As long as the young buy bitcoin, gold and property, it will all be ok

What am I , I thought I was a baby boomer ? 1967 ?

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Imax1 said..
What am I , I thought I was a baby boomer ? 1967 ?

Generation X starts at 1965 aparantely so it looks like your a Gen Xer

Why aren't generations longer? 18 years is fine for intergenerationally disadvantaged people who have regular teen pregnancies, but nowadays the average age of first births is over 30

A lot of it will go up in smoke in the next cyclic crash (which will be a big one given the debt this particular generation has generated to create this so called wealth). But from the ashes - yeh there will be a big transfer in wealth - hopefully to smarter, faster and more entrepreneurial individuals.

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kk said..
It's also worth noting that 99% of statistics are made up on the spot to support the argument at the time.

I read it was more like 99.9999
but I think you're right in the case of Covid-19

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Bananabender said..
BTW BBoomers are from end of WW11 so 1946.

Oz was already downsizing our military well before the end of WW2 [couldn't afford the payroll and toys + our manufacturing industry and farmers were desperately short of workers], with the result being lots of randy diggers/flyboys/navy types heading home with the intention of boosting our population growth

Those born between 39 and 45 were initially called war babies and later lumped in with the silent generation which could not have been further from fact or is it that they stayed silent and allowed Boomers to take credit for the huge cultural change in the world.
northwestprimetime.com/news/2015/jan/30/war-babies-generation-changed-america/

Just read an article that listed the average superannuation for different age groups and it's not looking great for a lot of the people about to or recently retired. The wealth transfer looks like it's going to be the other direction for a little while, with the workers footing the bill for pensions.

So far as "The Great Wealth Transfer", it's just a head line to sell a paper. Most of it's just tied up in the value of the family home, so it doesn't mean a lot. It's just gets split between the kids and they use it on their mortgages, so whether houses and mortgages are $500K, or $2M, it's still just a pro-rata percentage of a family home.

The real story is what will happen with the single or two child family, compared to the larger families. We're reaching the point where two full time workers won't be able to afford a home without significant assistance from parents. When there's only 1 or 2 kids, the family wealth isn't diluted and they can afford to buy a home similar to the one they grew up in, but if you come from a 4 or 5 child family then the kids these days have Buckley's chance of affording a home, in Sydney at least. It's just going to be further class separation as we continue to follow the USA down that path. Then it comes down to tax policy to appease the masses just enough to prevent a revolution, or at least to stay in office.

I think I may have read this thread wrong.

I thought it was about how myscreenname is going to spend the $30 trillion he made on bitcoin.

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Carantoc said..
I think I may have read this thread wrong.

I thought it was about how myscreenname is going to spend the $30 trillion he made on bitcoin.

i thought something similar. I thought maybe myscreenname was hoping his parents would hand over some cash to make up for his investments. 'here mum and dad, read this, you should give me the money now'.

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Harrow said..
Just read an article that listed the average superannuation for different age groups and it's not looking great for a lot of the people about to or recently retired. The wealth transfer looks like it's going to be the other direction for a little while, with the workers footing the bill for pensions.

So far as "The Great Wealth Transfer", it's just a head line to sell a paper. Most of it's just tied up in the value of the family home, so it doesn't mean a lot. It's just gets split between the kids and they use it on their mortgages, so whether houses and mortgages are $500K, or $2M, it's still just a pro-rata percentage of a family home.

The real story is what will happen with the single or two child family, compared to the larger families. We're reaching the point where two full time workers won't be able to afford a home without significant assistance from parents. When there's only 1 or 2 kids, the family wealth isn't diluted and they can afford to buy a home similar to the one they grew up in, but if you come from a 4 or 5 child family then the kids these days have Buckley's chance of affording a home, in Sydney at least. It's just going to be further class separation as we continue to follow the USA down that path. Then it comes down to tax policy to appease the masses just enough to prevent a revolution, or at least to stay in office.

Nah
The real story is who the government is going to tax to fund the retiring baby boomers who don't have enough super and don't have a family home to sell..!? I've done the research and there's more "have nots " than "haves" when it comes to retirement savings and longer life expectancy.

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Main said..
Nah
The real story is who the government is going to tax to fund the retiring baby boomers who don't have enough super and don't have a family home to sell..!? I've done the research and there's more "have nots " than "haves" when it comes to retirement savings and longer life expectancy.

I'd say it's going to be the younger workers being taxed, who will also be losing pay rises to fund the increasing superannuation guarantee. Which brings us back to the offspring in the 1-2 child families vs 4-5 child families and which of them will be able to afford a place to live given the generally higher tax, lower pay, and lower standard of living they are going to have.

I'd say it's a bit more subtle than income taxing the young. It's more about ensuring big company profits to pay juicy dividends to super funds. Same effect, different frame.
And I'd say a bit more. If super is there to fund retirement instead of pension it should be taxed heavily on death, not passed on to the next generation. Poor people don't get to hand on their aged pension.

You are all assuming super will actually be there for anybody, super that is predominately invested in the markets. I have a suspicion that history will view super as the biggest money making scam of all time. Money for the super funds administrators / owners that is. A lot of it is built on shaky ground man.

and even if the markets don't dissolve a lot of it, what will a heavily indebted government do when the can they have been kicking down the road can't be kicked anymore? They gotta keep the lights on somehow. Where do you think the money will come from?

What I reckon - for what's its worth......!

We will see a wealth gap become more apparent and intolerable to the masses. We will get a much more Left leaning government elected with a mandate to more redistribute the wealth in the country.

This will take the form of:

1. A significant increase in tax on SMSFs over a certain value. say $5,000,000
2. A significant increase in land tax on houses over a certain value say $5,000,000
3. Those with PPR house values over a certain amount will no longer be eligible for any government benefits like pensions and other discounts
4. 50% tax on inheritances

I reckon they will leave big business alone because it has too much power and influence.

Govt cant come close to funding the aged pension commitments coming over the next 20 years.....

The left leaning Turnbull government already restricted SMSFs to $1.6M.

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Main said..
What I reckon - for what's its worth......!

We will see a wealth gap become more apparent and intolerable to the masses. We will get a much more Left leaning government elected with a mandate to more redistribute the wealth in the country.

This will take the form of:

1. A significant increase in tax on SMSFs over a certain value. say $5,000,000
2. A significant increase in land tax on houses over a certain value say $5,000,000
3. Those with PPR house values over a certain amount will no longer be eligible for any government benefits like pensions and other discounts
4. 50% tax on inheritances

I reckon they will leave big business alone because it has too much power and influence.

Govt cant come close to funding the aged pension commitments coming over the next 20 years.....

Really? The last election they (at least the Labor party) got canned for even suggesting removing negative gearing. Based on this you would think that the kids that cannot afford houses don't vote or don't care.