Love Golf? Read this before buying a dream home on the golf course

Understand generational shifts in hobbies and leisure time before you retire

21 years ago, I was asked to participate at a golf fundraiser for a faith-based organization in the western suburbs of Chicago. In the weeks leading up to the event, I frequented the driving range so I wouldn’t embarrass myself. The day of the event I didn’t do so well. My frustration affected my behavior, which was so bad I could have made Happy Gilmore blush. After that episode my wife told me never to golf again. I gave away my clubs and have been golf-free ever since!

I am an early member of Generation X (1966-1980). My generation is different from the generations ahead of me, the Baby Boomers (1946-1965) and Traditional (Pre-1945). What I have noticed is that many members of those generations truly enjoy the game of golf.  They will take the time and pay green fees to play round after round. They will plan vacations around it, and when nearing retirement, they will pay a premium to buy in to golf communities in Naples, FL or Scottsdale, AZ.

My generation, and the generation following mine, the Millennials (1980s +), aren’t lining up to pick up the game of golf. From 2011 to 2015, the number of golfers in the U.S. dropped by 1.6 million, from 25.7 to 24.1.1 That may not seem like a lot over five years, but it’s been a consistent downward trend. The National Golf Foundation even launched “Project M” in 2014 to do ongoing research on the Millennial generation’s relationship with golf to try to figure out what needs to be done to attract this generation.2

Golf isn’t the only Boomer pastime that’s starting to lose its luster. Gen Xers and Millennials also aren’t showing much interest in two other big Boomer hobbies: classic cars and Harley Davidson motorcycles. The Hagerty Group estimates the number of collector cars in the U.S. is around 5 million, 58 percent of which are owned by Baby Boomers, and the median age of collector-car owners is 56 years.3 Harley Davidson has been experiencing a loss in market share to companies like Honda, Yamaha, and Suzuki.4

Putting a premium on time, not fees AND EQUIPMENT

If Gen Xers and Millennials aren’t picking up their predecessor’s hobbies, what are they doing?

The members of these younger generations have less time to devote to any one thing, in general. They place a high priority on life balance and on physical fitness. Since they don’t have a lot of time, there’s been an exponential rise in things like CrossFit “boxes” (don’t dare call them gyms!), Orangetheory, SoulCycle, boot camps, and in my case, watching NASCAR while on a treadmill, all of which offer an intense workout in an hour or less. They are also more community-focused and like to support causes, so events like Spartan Races, Mud Runs, Color Runs, and races that promote or raise money for a cause are also on the rise.

The Millennial generation in particular, also doesn’t have the extra money to pay for golf club memberships, extra car insurance, or the accoutrement that accompany these leisurely hobbies. They are paying off over $1.3 trillion in student debt, and putting off what used to be the big milestones of getting married, buying a house, and starting a family, to have more time to save for these things.5 They can afford to pay for a monthly gym fee or a 5k race, or attend free volunteer events that act as both social gathering and community service.

Making a plan so you can play your best game.

As a fee-only wealth advisor, my primary client is an affluent Baby Boomer. The Boomer generation covers a wide spectrum with members of various interests. Here’s how I advise them:

The Early Boomer (1945-1955):

  1. Develop an Exit Plan: For the Boomer in the gated golf community, start thinking about what’s next.
  2. Take out a Home Equity Conversion Mortgage, which is a standby expanding line of credit that guarantees tax-free liquidity, at some point in the future. Check out the following link for more: http://bit.ly/2kSIwYi
  3. Investigate Continuing Care Retirement Communities.
  4. Plan for long-term medical needs.
  5. Have family meetings to inform/counsel adult children.

The Late Boomer (1956-1965):

  1. Before buying a property in a golf community, ask yourself who is going to buy it from you? Will that person/couple be willing to pay a premium for golf amenities?
  2. Before getting into “fun” hobbies like cars or motorcycles, do a financial plan to determine how this might affect your retirement.
  3. Do not anticipate a financial windfall in the form of an inheritance.
  4. Investigate long term care insurance

What’s a boomer to do?

No matter what your hobby is, planning will help you make sure your retirement is full of leisure time.  Learn more about TransformingWealth™ , our proprietary approach, designed to get your arms around the big picture so you can make informed financial decisions. Ask Rob about Coyle’s TransformingWealth Preview Meeting, and schedule a complimentary consultation and start living the Good Life Managed Well™.

 

www.coylefinancial.com
800-480-7913 | coyle@coylefinancial.com 

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1 “2015 Golf Participation in the U.S. – A Slight Dip Tempered by Strong Positive Indicators,” National Golf Foundation, March 2016, accessed March 8, 2017, http://ngfdashboard.clubnewsmaker.org/Newsletter/1ll1udoge19?a=5&p=2389923&t=410871.    

2 “Income and Changing Demographics Key to Understanding Millennial Golf Participation,” National Golf Foundation, June 2014, accessed March 8, 2017,

http://ngfdashboard.clubnewsmaker.org/Newsletter/cftx90p6cwn?a=2&p=2341880&t=41087.

3 “How Baby Boomers Created Today’s Classic-Car Market – And How They Could Crash It,” Rob Sass, Car and Driver, February 2014, accessed March 8, 2017,

http://www.caranddriver.com/features/baby-boomers-created-the-classic-car-marketand-could-crash-it-feature.

4 “The Startling Decline of Harley Davidson,” Yatin Khulbe, The Huffington Post, November 6, 2016, accessed March 8, 2017, http://www.huffingtonpost.com/yatin-khulbe/the-startling-decline-of-_b_12796210.html.

5 Quarterly Report on Household Debt and Credit, Federal Reserve Bank of New York, February 2017, accessed February 28, 2017, https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2016Q4.pdf.