Monday, September 04, 2006

Personal Finance Blogs Are Getting Their Due: What it Might Mean

Not long ago, I read this article about personal finance bloggers.

One item that I have been noticing lately is that there are more and more financial bloggers. The fact that there was this article is an indication that I was not imagining this phenomena. I think that this is quite exciting because it indicates that there has actually become a very useful function of the internet and blogging. That is, to provide information about money in a person-to-person manner so that people can become more educated and handle some of these more complicated financial issues themselves.

This got me thinking though. What does all of this mean though? What are some of the ideas that might come out as a result?

Here's what I think could happen

I think that we will begin, probably by Generation Z, to start seeing most kids graduate from high school and college with a thorough understanding of their own finances. This implies that they will understand how to save money, why they should, how to plan for retirement and other long-term goals, all at a very young age.

I think that investing will change as a result and that returns will actually grow significantly. The returns on this money will actually be phenomenal and I think that the stock market (for this period) will actually have higher-than-average returns by a few percent.

I will admit, I have no scientific backing for this - it is simply a prediction, an idea if you will, of where this trend might lead us.

The downside that I can see though is that there will be people who either cannot or do not save and invest and manage their money properly. This might spell disaster. Similar to the mcmansion race that many in the baby boom and generation X are currently having with ever larger homes, I can foresee an arms race of investments and 401ks as we get older and the current generation passes into the major segment of retirees and Generation Y and Z are actually providing a majority of Social Security funds.

It seems a little early to get too worked up about it yet; there's tons of time between now and then. But if I said that I wasn't concerned about the potential impact on society when these generations start retiring (if nothing is changed before then), I'd be lying.

1 comment:

Tiredbuthappy said...

I hope you're right that the next generation will "get it" and focus on saving. But I don't know. My generation (late Gen X, early Gen Y) looks to be overspending on their kids. How can those kids, even with sound financial education which schools are starting to provide, going to break the early patterns they learn of always wanting more stuff, stuff, stuff?