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We all moved up to larger family homes and cars as our careers blossomed in the nineties, while the smart ones started putting money into pensions and PEPs, the first form of what we now call ISAs. By the turn of the millennium the first boomers were in their mid fifties and starting to turn their mind to semi retirement. A spate of corporate downsizing led many to take redundancy and early retirement packages where they moved into part time consultancy roles.
And now in this decade we see increasing divisions between the haves and the have nots of the boomer generation. The guy who didn’t bother putting anything into a pension is now a check-out operator at Sainsburys. The ones who rode the biggest property and stock market booms in history are sitting pretty, with high value properties and six figure portfolios of stocks and shares.
But what happens next and what does it mean for savvy investors? The answer is this huge population group starts moving from wealth accumulation to liquidation of assets. They want to downsize the family home and move to an apartment or even a bungalow. They start drawing down their pension or ISA investments to meet unexpected bills. Their earnings drop to sixty per cent of the peak they reached when they were fifty. Medical expenses triple between seventy and eighty and those that can afford to will pay to go private so they can jump NHS queues.
For the economy as a whole, the boomers move from being inflationary teenagers in the nineteen sixties and seventies to deflationary pensioners in the twenty first century. But what happens when two thousand people a day for eighteen years decide to downsize the family home? Even if we assume that two boomers share the same home, that’s three hundred and fifty thousand family homes coming onto the market every year at a time when the next generation is smaller than the one before. What will that do to residential property prices?
On the other hand, how can we build enough care homes to look after seven hundred thousand new septuagenarians every year for the next eighteen years? It will literally be impossible to find the space, get the planning permission, fund the building or find the staff to run all these homes. So do you think this commercial property based opportunity is a trend worth investing into? Me too. That’s why you’ll see dementia care homes in the Elite Investor portfolio, offering great returns for up to twenty five years. Taking it a stage further, many of these boomers live in London and, when they finally shuttle off their mortal coil, their families will find an acute shortage of burial space. That’s why you’ll find London burial plots in our portfolio, giving forty per cent returns in two years.
As the boomers age, medical and healthcare services will boom, especially those aimed at the wealthier retirees who can afford private care. Specialist residential facilities with some degree of medical support will boom. Luxury cruises will also boom but traditional family property prices will probably tank as they all downsize, while car sales have likely peaked as well.
This is one of the biggest megatrends of the coming decades. Focus on this alone and you could set yourself and your loved ones up financially for generations to come.