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Kelly Ruggles is the author of "The Financial Playbook" for Retirement.
Kelly C. Ruggles, Financial Planner and Educator

Articles by Kelly Ruggles        Back to Article Main Page

April, 2007
The Destiny of (Y)our Echo
How Are You Preparing for the Next Generation?

One generation parents another.  As children mature, a delicate balance becomes the greatest challenge:  shelter children and simultaneously create values and independence.

Presently, two generations demand the majority of America’s attention.  One cannot ignore the dominant influence of the generation known as “Baby Boomers,” generally categorized as people born between 1946 and 1964.  Yet, a larger and considerably different generation steadily matures.  The Baby Boomers have given birth to a generation of “Echo Boomers.”  Other titles such as “Generation Y” and the “Digital Generation” also refer to the children born between 1979 and 1996. 

Some demographers may interpret the Echo Boomers with births ranging from 1977 to the present.  Additionally, some may have been born to “Generation X,” a smaller generational classification with births ranging from the mid 1960’s to the late 1970’s.

Many differences separate the Baby Boomers from the Echo Boomers.  As children, the Baby Boomers appreciated a one hour show on Channel Thirteen.  Echo Boomers may watch more than thirteen channels in any given hour.  Baby Boomers once played records whereas Echo Boomers will break records.  For Baby Boomers, Walt Disney had a place in California; his Florida resort was simply a concept until 1971.  Soccer was a foreign sport for most Baby Boomers while most Echo Boomers play the sport.

The Echo Boomers are expected to influence changes in marketing, advertising, brand loyalty, and product longevity.  Their attitudes and spending habits will be formed by an increasingly diversified society and the cautionary threats of terrorism.  They will face continued issues such as crime, violence, disease, and the role of government.  The generation’s descriptive names suggest variables and repercussions.

Children will generally imitate their parents and spendthrift parents will often raise financially careless children. Direct children toward a path of a diligent investing early in life and saving will be a natural act as an adult.
As this younger generation gains momentum, Baby Boomers and others must address the financial considerations surrounding their families.  Baby Boomers will be forced to make concurrent financial decisions regarding retirement planning, elderly parent care, college expense funding, and their own long-term care needs. 

Regardless of the generational differences, our society cannot ignore the loud echo.  One day, Echo Boomers will receive inheritances from their parents, the Baby Boomers.

Inevitably, Echo Boomers will be influenced by society and develop opinions based on their experiences.  However, parents will still play one of the most important roles in developing personal values and financial responsibility.  Children will generally imitate their parents and spendthrift parents will often raise financially careless children.  Therefore, people living a life of high debt and reckless spending behaviors should not expect their children to act prudently.  Direct children toward a path of a diligent investing early in life and saving will be a natural act as an adult.

Echo Boomers will be technology savvy.  Yet in some cases, reliance on technology may prohibit basic development.  Years ago, a school teacher would use red ink to circle misspelled words.  For Echo Boomers, the computer draws a squiggly red line below a misspelled word.  In some cases, the computer will actually recognize the proposed word and change its spelling automatically. 

Advancements in technology bring new terms.  The Baby Boomer may hear “bite” when the Echo Boomer hears “byte.”  Baby Boomers viewed historical events on a black and white television while Echo Boomers view current events on a high definition flat screen television.  Even with the stunning view, Echo Boomers will interpret such events as “black and white.”       

Regardless of technological advancements, children will still respond to simple teaching methods.

For example, an allowance remains an efficient and productive technique for teaching all children fiscal responsibility.  Children learn that completed work yields financial rewards and fuels their journey down a path of prosperity.  Include a small safe or piggy bank in their room and they will begin to take pride in ownership.  Once the savings outgrow the small safe, a parent may decide to take the next step.  Consider introducing children to investment accounts, charitable giving, and responsible spending. 

Creating financial awareness and maturity is extremely important.  Yet, a child still needs nurturing and adult affirmation.  The impressionable mind of an Echo Boomer craves a parent’s reassurance that the future is cultivated.

Share college funding ideas with your child.  With older children, a parent may consider an explanation of 529 education savings plans.  States differ when it comes to 529 plans, but the goal is the same.  The goal is to save money for the future costs of college.  A person should fully review the choice of prepaid plans versus savings accounts.  Currently, investments in the savings plans grow tax-deferred and distributions do not incur federal taxation.  However, keep an eye on the year 2010 when law makers must decide to continue the tax free benefit.  Be sure to review all aspects of the plans before investing.  Please visit my office and I will be happy to update you on other benefits such as ease of contributing, contribution limits, options available, potential state tax benefits, and restrictions.  You should also review Section 529 of the Internal Revenue Code before opening a 529 education savings plan. 

Baby Boomers once utilized eight track tape players.  Echo Boomers will utilize nothing less than eight-disc CD changers.  A Baby Boomer addressed his friend’s father as “Mr. Smith,” not “John.”  Years ago, cloning occurred in science fiction novels, not in a lab.  Smashing pumpkins was a prank, not a musical band.   Years ago, lemonade stands offered one product, lemonade.  The modern lemonade stand may still offer lemonade, but it also offers other products such as baked goods and an assortment of flavored drinks. 

Remember when your bologna had a first name and it was important to know the commercial jingle.  Now, it is important for your children to carry on your last name in a reputable manner.  Start the year 2006 by educating your children with the topic of finance.  Include them in portions of your financial plan and estate plan so they may learn the advantages of saving for the future.  If you have any questions on the information presented in this article, please give me a call and I will be happy to help.



©2007, Kelly C. Ruggles | Sitemap | Disclosure
Kelly C. Ruggles, President of American Reliance Group, Inc., is a registered investment advisor. Mr. Ruggles is the author of "The Financial Playbook" for Retirement.

Mr Ruggles does not intend to provide personalized investment advice through this publication and does not represent that the strategies or services discussed are suitable for any investor. Investors should consult with their financial advisors prior to making any investment decisions.