Boomer Financial Advice to Ditch

It's easy to dish out what you might think is great financial advice if you're from the boomer generation — the most recent generation to accumulate copious amounts of wealth compared to others.

But does the financial advice of this aging generation still hold up today?


Older generation financial advisors such as Suze Orman and Dave Ramsay have been dishing out financial advice for a long time - but their words of wisdom are unrealistic in today's world.

Many believe the American dream is dead, and in many ways this is true. So it may be time to take part in the adolescent practice of "ignoring our parents" and ditch the financial advice of boomers — especially if that advice sounds something like this:

"Pay your mortgage off as soon as possible"

Baby Boomer GIF by MOST EXPENSIVEST Giphy

For most boomers, paying off their mortgage as soon as feasible was sound advice at some point, but that's probably not the case today. Mortgage rates in the '80s and '90s were well over 10%, but the average rate in the past decade hasn't even gone above 5%.

It makes much more sense in today's world for homeowners with low-interest rates to consider investing that extra money or paying on higher interest debt.

"Don't discuss your finances with others"

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Americans have always been discreet about money, and it has long been taboo to discuss finances with others, especially in the workplace.

"How much do you make" is often interpreted as "how much is your worth," and the correlation of pay and a person's value makes it awkward for many to discuss their finances. However, the norm of keeping one's salary secret has only led to an increased wage gap in America.

There is no reason that sharing salary information with coworkers shouldn't happen. After all, it may just land you a higher salary. And if you're ever told by an employer not to discuss salary with co-workers, you can refer them to the National Labor Relations Act of 1935, which makes it unlawful for private sector employers to prohibit employees from discussing their pay.

"Get a college degree if you want to make good money"

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College isn't always a good investment anymore. With the college wealth premium — that is, the additional income earned by a family whose head of household has a college degree compared to that of a similar family head of household who does not have a degree — has been on a steady decline over recent decades, proving that college degrees don't necessarily ensure higher pay anymore.

The average cost of college has risen 3009% since the 1960's.

College was a completely different ball game when the majority of baby boomers attended. In 1970, the average college tuition came to what would now be $1,653. Today, that number is closer to $25,000.

To further debunk the myth that a degree amounts to more wealth, the skyrocketing price to attend college alone can often make a degree a bad investment. Many boomers were able to pay for entire degrees with the money made at part time jobs. With the average modern college student accumulating upwards of $40,000 in debt, the days of being able to pay for college with your own income are long gone for most individuals.

"Stay loyal to your job, and you will be rewarded"

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According to a Linkedin study, boomers report being significantly more satisfied and loyal to their employers than Gen X and Millennials; but a look at the change in the workplace might unveil the reasons why younger generations are more likely to switch jobs.

Pension plans, or retirement plans in which an employer makes contributions set aside for employees to collect after they retire are almost entirely a thing of the past. With this type of plan, often referred to as defined benefit plans, the employer is the sole contributor to the retirement accounts, unlike the common retirement plans today such as 401ks, in which the employee themselves must make contributions. Today, only about 4% of private-sector employers offer pensions to their employees.

Along with diminishing retirement incentives, the lack of benefits and rising costs of employer-sponsored healthcare also play a factor into job loyalty. Since 1998, the percent of workers offered employer-sponsored coverage has been on the decline.

"Homeownership is the path to wealth"

Boomers GIF by MOODMAN Giphy


Any boomer will tell you that the first thing to invest in is homeownership. In fact, the baby boomer generation believed in this advice so much that they now own more than 80% of housing wealth in the US.

A recent study found that from 1983 to 2013, housing wealth increased almost entirely within the baby boomer and older generations. Urban boomers have highly influenced the increase of homeownership pricing due in large part to restricting housing supplies. For example, most neighborhood councils and homeowners associations are made up of boomers, who impose strict building requirements that raise the prices of homes and make affordable housing scarce.

Younger generations are left with few options, either having to often take out mortgages they truly can't afford, or continue to rent. And if the 2008 crash taught us anything, homeownership can be a very risky investment.

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When you are newly hitched and learning how to combine your essential legal and financial information as well as your accounts, it can be confusing.

Many people live together before getting married and have begun the process of combining accounts and sharing responsibilities. However, some people wait to do this only after marriage, and others wait until they're married to live together. Whichever path you've chosen, it's still crucial to know a few tips to manage money together as newlyweds to determine where you should begin and how you can remain on the same page.

Discussing Money Motivations

As we begin to share money with our significant other, we soon find out what one person may rank as a priority regarding money and the other may not. As such, sitting down and discussing money motivations is important. Two people who cannot agree on how to handle money may cause serious issues. This should include:

  • How to deal with money following payday. Is a percentage put into savings? Is that the day to splurge on dinner, drinks, and more?
  • The frequency and size of payments made to debts. Some people like to pay minimums, whereas others pay in full or make double payments.
  • What do you each consider money well spent? Is it a new 70" 4K television? Is it an investment? Is it paying as much debt off as possible?
  • How do you go about consulting each other before making purchases over a certain amount?

Establishing Financial Goals

After you evaluate the motivations behind your money and how it should be spent, you'll need to spend time together hashing out financial goals. As newlyweds, there are certain things on your list that you're going to want to save for. How do you go about that? How much of each paycheck will you dedicate to a particular fund?

Some things in the future worth making a financial plan for include savings and paying down debts. This is the time to be honest about your current financial standing. If you're looking to buy a home, you'll want to assemble a first-time homeowner financial checklist to begin to develop topics of conversation. Some of the things to consider setting goals for are:

  • Student loans
  • Car loans
  • Future children
  • A house
  • Medical bills
  • Delinquencies on credit reports
  • Vacation and rainy-day funds
  • Emergency funds

Budgeting Together

The more honest and open you can be with each other about the money you have and now the debts you share, the better. Implementing plans for the best ways to have the things that you both desire while still taking care of existing demands is important. These can be uncomfortable things to talk about; however, these conversations are necessary.

Following these tips to manage money together as newlyweds will allow you to have a starting point for conversations that can be tough to start. The sooner you and your partner get on the same page with finances and the responsibilities that come with them, the easier the transition will be and the sooner you'll find success.

It's the dream: money you can count on to keep rolling in, even while you sleep.

Passive income isn't entirely passive, of course. You'll put in work up-front to get the profits rolling, so don't relax in your recliner just yet. But with so many potential sources of passive income available to you, picking one or several will mean that the day you can finally kick back will draw steadily closer.

Rental Properties

Real estate is a tried-and-true wealth builder for a simple reason: people will always need somewhere to live. Research the market in a growing community until you know a good deal when you see it. You can maximize rent by fixing up a deteriorating property or upgrading a mediocre one. The key is to hire a property manager to do all the day-to-day landlord duties for you—and you'll need a good one. Smart investors put their profits in another property and repeat the process until they have a diverse portfolio.

A YouTube Channel

You can start a blog if you're more comfortable hiding behind a computer, but consumers are more likely to prefer video content. Post a series of “how-to" videos to answer questions about whatever you're an expert in.

You can put up any content you want, but if you don't want to commit to regularly updating it, focus on “evergreen" topics that will draw clicks for eternity. Ads will create your income, especially if your channel grows in popularity. Better yet, sign up for affiliate marketing. If you recommend a product and provide a link to buy it, you'll get a small percentage of those transactions.

Auto Advertising

If you don't mind vinyl-wrapping your car with an ad for a company, you can get cash just driving around and running your errands. Make sure you contact a reputable company that doesn't ask for any money from you; if they're the real deal, they'll evaluate your car, your driving habits, your area, and more. Bonus: the brighter the ad, the easier it'll be to find your vehicle in the parking lot.

Digital Products

What's something that people will pay for but doesn't require shipping on your part? Finding that item is what can supplement your income indefinitely. Write an e-book, charge for your cross-stitching patterns, design prints that people can digitally download, invent an app, record a “masterclass," or whatever else you want. Every time someone new discovers it, the cash register rings. With a little more effort, this is a potential source of passive income for you that can continue to grow. Once you build up a customer base, they might want more products. The good part is that it's up to you whether you wish to give it to them.

Airbnb is a great option while traveling, but you should protect yourself from damage charges from unscrupulous hosts.

Airbnb offers an affordable option for people looking to be more comfortable as they travel.

However, there are downsides to staying in a host's home rather than a hotel. Whereas hotels are designed for constant streams of visitors and often have furniture built to last, at an Airbnb, you may be staying on old or cheap furniture that a host is using in order to maximize their profits.

And while most reputable hotels will have regular room inspections from staff to check for any wear and tear, Airbnb damage disputes are oftentimes he said, she said situations. If you are in an Airbnb and something breaks, there are a few steps you should take in order to ensure that you are not on the hook for damages out of your control.

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