DescentBB

I'm guessing that the big change that will eventually tank Wall Street will occur when most of the middle class Boomers start their required distributions from their 401K's at 65 as required, OR when they eventually die off and all those heirs take their inheritances out of those bank accounts. Nice fat accounts that are currently being used to fuel and run the markets. Most of these kids will either spend the money or use it to survive in the current job market. It isn't going to be sitting unused and growing those nice bank accounts like ripe, juicy grapes for Wall Street financiers to pluck and gamble with anymore. Poof!

Tunnelcat wrote:I'm guessing that the big change that will eventually tank Wall Street will occur when most of the middle class Boomers start their required distributions from their 401K's at 65 as required, OR when they eventually die off and all those heirs take their inheritances out of those bank accounts. Nice fat accounts that are currently being used to fuel and run the markets. Most of these kids will either spend the money or use it to survive in the current job market. It isn't going to be sitting unused and growing those nice bank accounts like ripe, juicy grapes for Wall Street financiers to pluck and gamble with anymore. Poof!

this is so naive as to be almost cute. Any 'Boomer' who isn't WAY past their 401K being significant to the portfolio is headed in the wrong direction. The amount of inheritance money floating through the hands of many(not massive numbers but enough)boomers right now is STAGGERING. No matter what gets drawn down, why on earth wouldn't you assume it is reinvested?? You underestimate, as I've pointed out here to others, how utterly out of whack the distribution of liquid assets in this society really is. What you have to hope is that some of the folks holding the chips either develop a conscience, or a healthy respect for an enraged and desperate public, or both, and address the reality of the wealth imbalance. I see no real reason for any 'market collapse', especially during the biggest profit margin and productivity boost in human history.

I'm only making the observation that these heirs will either fritter it away like drunken sailors or spend it just to survive. For all the opinions that I can find that claim Millennials are saving a lot more money and putting it into the bank, there are yet other opinions that say due to the large college debt these kids have incurred and the lower wages now, that saving anything will be far more difficult. However, what they decide to do with their inheritances is another whole question. Like you say, I may be naive, but when I look at my sister, who is already spending money right and left out of what my dad is already giving away as estate gifting, it's definitely not going back into the bank in her case. By the time some of that gets to her 3 kids, it's going to be almost nothing.

https://money.usnews.com/money/retireme ... retirement

putting money into the bank is fine if you expect an imminent collapse, but barring that, it's idiotic. What, take 0.3% interest, tops, when finding growth stocks that pay 3 or 4% in dividends is easy?

That's all well and good if they have the money to invest in the market in the first place and haven't spent it to live their lives. And when I was referring to "banks" I was referring to the investment banks and brokers where most people without any stock trading knowlege will go to invest in the market. The regular old banks have such a piddly rate of return that it's almost not worth the effort. However, since the repeal of Glass-Steagal, the differences between those types of banks is now moot.

About two months ago I was chatting with a friend of a friend. This guy has made quite a living in manufacturing, enough that he self-funds a good chunk of his other start-ups. The topic of automation came up and he revealed to me that in the past 15 years he's cut his workforce in half, from approximately 130 employees down to just under 70. He frequents manufacturing and automation conferences all the time. He's... optimistic...? about the future because he has faith the economy will "self-correct" when it needs to. He might be right, but I also think it's a good idea to prepare for the worst case scenario.

Speaking of worst-case scenarios, he recommended Vonegut's "Player Piano" which he says is a big influence on his perception of society and the effects of automation. I love Vonegut's work, but haven't read that book (and probably won't until much later this year... too busy). While the book is decades old it might still be relevant. Great authors can really push ideas to the absurd, which is a good quality if you want to explore a complicated subject.

callmeslick wrote:putting money into the bank is fine if you expect an imminent collapse, but barring that, it's idiotic. What, take 0.3% interest, tops, when finding growth stocks that pay 3 or 4% in dividends is easy?

It's what you do if you have absolutely no knowledge of proper investing. I'd like to think I have a good head for math, but for whatever reason the financial application of such actively repulses me, and I have a pretty glaring gap in my education when it comes to personal finance. (Speaking as a teacher, dear lord should that be a required class.) So at least for right now I'm just throwing stuff in the bank and cracking up when I see the whopping 25 cents it generates in monthly interest. I know one of these days I desperately need to talk to someone who knows what they're doing investment-wise, but I'm also aware that I'm just one example out of countless others.

meanwhile, the little guy gets hosed, as usual:http://www.msn.com/en-us/money/retireme ... li=BBnbfcN