The last seven years have been financially difficult for most of the country. Job insecurity, stagnant wages, declines in real asset prices and an overall feeling of uncertainty about the future have taken its toll across multiple generations. Looking at the economic data reveals that this misery hasn’t been shared equally. Older generations (people over the age of 40) have been managing to improve their financial condition or were sufficiently insulated to avoid the worst of the shock. Generation Y (people currently in their 20s) are young enough to enjoy an eventual rebound later on in their careers and, for the most part, had limited susceptible assets to begin with. That leaves Generation X.
Gen X (people mostly in their 30s) are in a difficult financial position. As Jordan Weissmann writes, the housing market bubble burst just as Gen X was buying real estate. The net result is that they invested their capital into an asset that may decline in price, in many cases to the point where the value of the house will be less than the mortgage debt. Crawling out from this type of financial predicament, especially during a time of weak economic recovery, can take a decade. At the point when they are about to start accumulating wealth, they will find major life expenses fighting for a share of their wallet. These pressures and circumstances make it very likely that Gen X will be worse off financially than their parents.
Business owners need to respond to this trend. Developing products and services that reflect the more modest financial condition of Gen X will allow you to tap into that market. Developing alternatives methods to evaluate customer credit-worthiness will also be essential as traditional metrics may not reflect the new reality for Gen X.
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