A Disturbance In The Force

The first of my age cohort, the Baby Boomers, turn 80 this year, 2026.  Born between 1946 and 1964 all 76.4 million of us are kicking-off the new year with our growing dominance of consumer spending.  Why is this important anyway?  The US economy is primarily service-driven; not manufacturing.  Consequently, consumer spending accounts for roughly 68-70% of the U.S. Gross Domestic Product (GDP). This means that consumer spending is the largest component of the U.S. economy, and a major driver of economic growth.  More old people and fewer young ones are reshaping jobs and spending in all kinds of ways.  There's nothing nefarious about any of this; it's pure demographics. For instance, nearly all of January's job growth came from the healthcare and social assistance sectors with healthcare employment as the largest contributor to labor market growth in 2025.  

For any of you reading this who happen to be a dues-paying boomer ask yourself what of any of the following applies to you and your own situation. 

Exhibit 1 - The collective wealth of the baby boomers - estimated at over $78 trillion - is fundamentally reordering the global economy.  Retired and no longer accumulating assets boomers are spending discretionary funds while prioritizing quality of life over material accumulation.  Consider this: While younger generations may be tightening their belts due to inflation; boomers are the principal drivers behind a $544 billion travel market in 2026.  

Exhibit 2 - Boomers are more proactive with regard to medical care and lifestyle choices.  Whether it is preventative medicine, diet, exercise, active recreation and smartwatches boomers are investing in their future.  While some may choose to downsize, many are investing in their current homes and choosing to age in place.  This includes high-end appliances, landscaping, home improvements and upgrades in accessibility and other services to simplify daily life. 

Exhibit 3 - Value-based frugality.  Despite their wealth, it took a lifetime of saving, sacrificing and investing for boomers to get to where they are.  Consequently, they remain incredibly value-conscious.  Boomers demonstrate consistent brand loyalty and are more likely to drive their vehicles for longer periods than most Americans. They'll invest in home improvements if they believe it will add value to a future sale.  They're also less likely to spend on themselves and more likely to spend on their family members. 

To be clear, everyone's personal situation is different.  Moreover, as a cancer survivor I am smart enough to understand that anyone's number can be up at any time. Consequently, one day at a time.  Nevertheless, there's no escaping the fact that boomers are growing as a share of the overall aging population.  This demographic, referred to as the pig moving thru the python, along with their financial muscle is going to influence all sorta new business startups and marketing trends.  It's a good time to be alive.

Sound like anybody you know?

Climate Risk

An article in the Washington Post last week outlined a detailed analysis of risks associated with the places we chose to live.  And consequently the implications associated with this choice.  There are implications related to risks.  The article may be pay walled, nevertheless this is the link if you want to take a look and avail yourself of the interactive risk calculator. 

I also want you to know that 10,000 years ago - where I live on the Door Peninsula - was covered by an ice sheet a mile thick!  Yup, that is a pile of glaciation.  So much so that the earth's crust continues to rebound from the weight of all of that ice.  The truth of the matter is that things have gotten warmer ever since.  

The climate has changed.  

And yes - beginning with the industrial revolution - I'm sure the hand of man has contributed to this change.  But I digress.

In this column the issue of climate risks assesses both the opportunities and threats that this poses for homeowners.  As a recovering financial guy I can appreciate the careful study of risks as they relate to the financial implications. 

Some families live in locations with too little water while others live with flood risk.  Some households chose to live within a spectacular view of the water; consequently there is the risk of sea level rise and dangerous storm surge.  If you've ever visited Asheville, NC you'd likely think:  This would be a terrific place to live.  Asheville, NC is no more because of a never-before flood event.  And while mountain views are also spectacular a wildfire can reduce your home to a smoking pile of ash.  More than once.

Many of these events come as a result of many years of climate change.  And they come with ramifications for the choice we make as to where to live, market impacts on the prices of our dwellings and the costs associated with insuring against losses.  All of which cumulatively impact communities on a larger scale.

The interactive calculator in the article offers AI-powered geospatial predictive analysis from AlphaGeo.   This utilizes granular analytics covering all climate risk hazards including heat stress, drought, hurricanes, flooding and wildfires for a volatile world including risk and resilience data to guide future-proofing your homestead.

As it turns out Door County, WI has very low climate risk.  Here's a breakdown of the individual risks:

Coastal Flooding and Hurricane - Very Low

Heat and Wildfire - Very Low

Inland flooding and Drought  - Low

It's rather safe to live here.  The risk of sea level rise is a non-issue although fluctuating lake levels periodically bedevil businesses and homeowners situated on the coastline.

And for the record - over the last number of decades we've been hanging around here I've taken notice of two anecdotal changes:

No snow for the November gun deer opener in about eighteen years.  The November gun season has become milder.  

You can use the link in the first paragraph to assess these same risks for any county in the United States.

Behavioral Finance

A comprehensive financial plan should incorporate all of the Big Five Personality Traits as they influence the scope and direction of the planning process.

Commonly studied by psychologists and scholars of behavioral finance  these trails include:  Neuroticism, conscientiousness, agreeableness, extraversion and openness.   

According to research appearing in Financial Planning Review it is conscientiousness that is by-far the most vital personality trait when it comes to wealth accumulation.

Conscientiousness is highly correlated with an individual's preference for following rules, working hard, carefully organizing tasks and following-thru to see that tasks are completed in a timely fashion.

Accounting for educational attainment and other cognitive variables this trait is also most consistently associated with work and career success.

According to researchers Fenton-O'Creevy and Furnham this trait is also highly correlated with effective financial planning.

You can learn more about this subject here.