Baby Boomers were born between 1946 and 1964. There are approximately 75 million of them in America alone.

Population has always increased over the years, but the Baby Boomer generation is unique. Due to the World Wars, there were significantly fewer births just before 1946 — and the birth rate slowed down significantly after 1964, due to the popularization of birth control. This makes one large lump of people in society, all in the same general age group, all progressing through the stages of life at approximately the same time.

Here’s what makes this relevant today.

The first of the Baby Boomer generation started to retire in 2008.

They will continue to retire until around 2026.

These Baby Boomers have been working hard for the last 40-something years of their life. Working hard, earning money, buying stuff, investing in the stock market, saving for retirement.

Now it’s time for them to stop working, tap into their savings and investments, and enjoy their final years.

Except…

We’re in major trouble.

Never before in history has the stock market been used as the single largest and primary investment vehicle for retirement. These hard-working Boomers are going to want to “cash in” on all their years of planning and saving. They’ve built up their 401(k)s and continually invested in their mutual funds.

Which means, about 75 million people are going to start selling their shares and mutual funds, to access that much-needed money for retirement.

75 million people taking money out of the stock market.

At the same time.

If, on average, they only took out about $1,000 a month to live on — that means, on average, 75 billion dollars would disappear from the market every month.

$75,000,000,000 cashed out this month.

$75,000,000,000 cashed out next month.

Another $75,000,000,000 taken out the month after that.

And so on.

Where’s all this money going to come from?

Do the following generations have it? Are they buying $75 billion into the market every month?

Nope.

When adjusted for inflation, the later generations have less money than their Boomer parents did. Partly because our standard of living has increased, and we now live in larger houses and drive nicer cars, for example. We may have a better quality of life, but at the end of the month, we have less money to put towards savings and investments.

So what happens to a stock when more people are selling than buying?

That’s right. It goes down.

And down.

And down.

Is it any wonder we’re entering a recession right now?

Add to that the housing foreclosure mess, thanks to near-sighted and greedy mortgage companies and banks several years ago.

Less money circulating in the economy means less jobs, lower-paying jobs, fewer benefits, etc.

In fact, my own job right now — because of the “slow economy,” we have ZERO benefits. No sick days, no paid time off, no health insurance or anything like that.

I don’t need to remind you about the skyrocketing gas prices either. Yesterday I had to fill up my tank at $4.01 per gallon, regular unleaded.

And all week business has been unusually slow for us — and normally, the end of the month is our busy time.

I’ll be fine. I’ll figure something out. I’m young and will get through this economic hardship. The bad news is, things are going to get worse before they get better. The good news is, things will get better.

Nature has its four seasons: Spring, Summer, Fall, Winter.

We as people, and our nation and economy at large, go through similar seasons.

Experts say that “for the past 40 years, the stock market has always gone up.” Yes. Overall, it has. But that’s not the complete picture. What those experts don’t tell you is that the stock market also declines for 40 years too. Everything has a cycle. Everything has its own rhythm and heartbeat. Everything has its seasons.

It’s like looking back to the first day of spring and saying, “for the last two seasons, it’s been warm and crops are abundant.” Yes, that’s true. But just before than, and right after it, are the fall and winter seasons. When it’s not so warm and crops aren’t so abundant.

It’s important to see the whole picture.

This may not sound like the most positive or hopeful message, but blind positivism is dangerous. If you’re planting spring seeds now, expecting a harvest in a few months — but you’re doing it at the end of fall, just before the cold and snowy winter months — your labor is in vain.

Know the seasons, know where we’re at in life and our place in history, to plan and prepare accurately.

Winter isn’t something to be feared. It’s a natural part of the life cycle. But it is something to be prepared for.

Like I said, I’ll be fine. Times may be tough ahead, but we’ll get through this — together.

I’m more worried about my dad.

He was born in the mid 50’s. He’s due to retire in about 10 more years.

That’s 10 more years of the Baby Boomers before him cashing out that 70-something billion dollars a month from the stock market.

I haven’t asked him about his 401(k) or plans for retirement. He likes to keep his finances private. But I’ve been hearing from one pre-retiree after another about how their stock portfolio has shrank by as much as 2/3rds in just the last couple years.

I worry my dad may not have nearly as much to retire on as he had projected or was expecting.

It’s funny. Just last month, he generously gave me some money when my paycheck wasn’t enough to cover rent. He’s always been a loving and generous man when it came to money. Now I imagine, in ten years or so, I may have to be helping him make his ends meet.

Fortunately, he’s also pretty smart and has been making extra payments on his mortgage. He will own his house free and clear by the time he retires. That’s huge. Things will be so much easier on him. He was smart to plan that.

My friends, winter is coming.

The economy is going to get slower. Gas prices are going to get higher. Jobs will be fewer and lower-paying.

For a while.

Just like the other three seasons, winter will naturally come to an end in due time too. Spring is up next. But just like the seasons of nature, you can’t skip one and go to another. Fall always comes after Summer. Winter always comes after Fall. And then Spring always comes after Winter. :)

That’s the good news. Spring is coming.

But first we’ve got to get through the winter months.

Which, in economic terms, will probably last a decade or two.

Winter isn’t something to be feared. But it is something we should be prepared for.

Here’s some tips to make it through the cold months ahead:

1. Make more friends than enemies.

This is a time when we need to come together, stick together, work together. Independence is good, but it’s by supporting each other that we’ll get through this.

2. Have faith.

This isn’t the first time the human race has gone through a winter period. We’ve made it through before, we’ll make it through again. Sometimes it may feel or look like the end of the world — winter sometimes looks like that — but we’ve made it through before, and we’ll do it again.

3. Know what’s really important.

During the winter months, it’s important to conserve your time, energy, and resources for what really matters. Building and maintaining quality relationships is one of them.

4. Be flexible.

Learn how to adapt, make changes, and move when necessary. Maybe one area might get too cold and barren. Don’t just stand there, resisting the biting winds, telling yourself it’s gonna be warm any time now. Don’t get frostbite hanging onto old ideas or old patterns of doing things. Be flexible, try new things, move to an area where you’re sheltered from the wind or can gather around nice warm fire with others. :)

5. Rest.

Winter is a season of rest, hibernation, and waiting. It’s the part of the life cycle that does two key things: 1) makes room for new life, and 2) gives you time to rest up and get ready to be active and flourish in the springtime.

Use this period to discover new life and opportunities within yourself. And/or use this time to rest up and prepare for all the activity and planting you’ll be doing once spring comes.

6. Remember, it’s not winter everywhere.

Earth is a funny place. While one hemisphere is freezing cold, the other is enjoying summertime. Maybe it’s time to leave the familiar and venture into new territory — an area that’s thriving instead of quieting down.

In other words, not all of the economy is suffering. Even in wintertime, some businesses and some parts of the economy will do really well — they are often businesses that deal with wintertime needs. Like ski resorts. :)

Also, not all economies in the world are in our same cycle. Nations like China are just emerging and ready to boom. If the local economy has hit you too hard, maybe you can consider relocating to another country where you might flourish too. It’s just an idea.

Nowhere is it written you “have” to live in the same place you were born. It’s an option, but maybe you’d rather stay here and go skiing with your friends, instead. :) It’s your choice.

And that’s the message I want to leave you with today. We have choices. We have each other. Times may look tough — and they are, and they’re gonna get worse — but we will get through this, just as generations before us have.

Don’t be afraid. It only looks like the world is coming to an end. That’s natural. That happens every time the winter season begins.

Bundle up, stick together, and play in the snow.

Winter may be cold and gray, but it can also be a lot of fun, if you understand what it is and how to enjoy it.

Don’t stress. The economy’s not supposed to be like it was during the summer months. Our economy will again be rich and abundant like that, when the next summer hits. For now, things are a little slower, a little more expensive, a little harder to get through — but it’s winter.

Build a snowman — whatever that means to you. lol. Throw a snowball at that girl you secretly like. Curl up in front of the fireplace with her once you finally get up the nerve to ask her out. ;)

Sing Christmas carols.

Share with one another.

And before you know it, the snow will melt away, the sun will get brighter, and new life will start springing up everywhere! :)

Namaste, my friends.

I love you.

Sincerely,
David Michaels

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