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Exclusive Interview: Chuck Underwood Explains Why the Generations View Money Differently

Exclusive Interview: Chuck Underwood Explains Why the Generations View Money Differently
October 16
00:03 2018

Chuck Underwood is one of the half-dozen pioneers who created and then popularized the discipline of Generational Study. Having researched generational dynamics for more than a quarter-century and then worked side-by-side with hundreds of clients to execute a long list of generational strategies, he is considered one of the elite consultants in generational strategy.

The former sports broadcaster now trains, consults, and speaks to business, government, educational, and religious organizations on a full list of generational strategies. He is the host of the television series America’s Generations With Chuck Underwood , on PBS. His book, America’s Generations In The Workplace, Marketplace, And Living Room, is the most comprehensive presentation of generational strategies ever published.

FN: Chuck, welcome to We like to begin our Exclusive Interviews with a “what got you here?” types of question. Tell us a little bit about your history. What significant life events helped guide you towards the study of generations?
Underwood: The lightning-bolt moment occurred in a restaurant conversation in the 1980s. I was in television at the time, working as a sports play-by-play announcer and calling college football and basketball games for ESPN, Big Ten Conference, and others. But during an innocent dinner conversation with nine other people I’d recently met at a party, I found myself talking to the guy sitting directly across the table from me and learned he was 15 years older than me. I don’t recall the topic, but at one point in the conversation I said to him, “I’ll bet you and I feel differently about this topic because” – and here comes the moment that would change my life forever – “you and I CAME OF AGE DURING DIFFERENT TIMES IN AMERICA.” Well, he and I began to explore that thought, found ourselves saying “my generation, your generation,” and got so enthused in our conversation that all of the other chats around the table suddenly dried up and EVERYONE joined my discussion with him. When that happened, the conversation suddenly IGNITED. Passion. Conviction. My generation believes this. Well, my generation thinks that’s wrong. On this Tuesday evening, when all of us had to awaken early for work the next morning, we closed the restaurant at midnight with the wait-staff huddled in a corner, patiently waiting for us to leave. As I finally walked alone across the parking lot to my car, I said out loud and only to myself, “What the hell just happened in there?” And what had happened, as I would fully appreciate years later, was Generational Dynamics. I loved sportscasting – how can you not love sitting in a stadium in southern California on New Year’s Day and announcing a Rose Bowl game between USC and Ohio State, as I did when I served as the radio “Voice Of The Buckeyes” on its 60-station network? But this idea of “generation” simply captured me.

FN: Give us a short summary of the field of generational study. When did it first begin? When did it really become popular? Why is it so especially important today (as opposed to 100 years ago) for us to understand and appreciate the differences in the generations?
Underwood: At the time of my lightning-bolt moment in the ‘80s, there was no noteworthy research or literature on the subject. “Generations,” as a field of study, did not exist. As it turns out, about four or five others in this country had ALSO accidentally stumbled upon this same notion, this gut hunch, that generation somehow meant something far more important than anyone knew. (We would learn years later that a couple of people had tinkered with the idea, one in the 1960s and one in the ‘70s). And individually, we scratched and clawed for about fifteen years to see if we were right, having no idea where it might lead us. It was a lonely, terrifying passage: we were pursuing something that did not exist on planet Earth, and we endured little but blank stares when we tried to explain out gut hunch to friends and relatives and businesspeople. But finally, right around the turn of the century, it suddenly took off like a rocket ship. And I’ve been living out of airplanes and hotels ever since, training and consulting and speaking to American and Canadian business, government, education, and religion in a full list of generational strategies. When I spoke to a university advertising class a few weeks ago, the professor chose to introduce me to his students with these words: “It’s not often we get to listen to someone who has actually helped create an entire discipline of study and knowledge. But today is one of those days. Chuck Underwood is one of a half-dozen people on this planet who actually created the field of generational study. Chuck is to generational study what Steven Jobs was to Apple, the Beatles were to modern rock and roll and Jeff Bezos is to online shopping.” Well, except for the money, the fame, and the impact on the world, he got it exactly right!

FN: Before we get too far into the discussion, can you define the age range of the generations? What makes us know when one generation ends and another begins? How fuzzy are these date ranges?
Underwood: Here is the permanent and full definition of a generation, followed by America’s 5 living generations, their birth years, and current ages:

Definition: A generation is an age cohort that shares similar lifelong core values as a result of sharing the same basic times and teachings during their formative years, which are the first 18 to 23 years of life. Whenever the times or teachings, or both, change in a significant and widespread way, it means young kids coming of age in those different times will mold different core values and thus become our next generation. “Minor” changes don’t count. “Fads” don’t count. The classroom years are our “pre-generation” years, when we “try on” lots of core values to see which ones fit and which ones don’t. In other words, we go through the sorting process. So:  there is no such thing as a 16-year-old or 12- or 2-year-old member of any generation. But when we leave the classroom years and enter adulthood, we now possess a set of core values that we’ll largely keep for life, and that is when we become a member of a generation. And yes, we’ll change, we’ll evolve. But those core values will remain largely intact. And they will heavily influence our minute-by-minute consumer choices, career decisions and on-the-job performance, lifestyle preferences, relationships with others, and our own personal behavior for life. And that is why generational training and knowledge and strategies are now imperative to American business.

G.I. Generation          born 1901-1926        age in 2018 is 92+
Silent Generation     born 1927-1945         age in 2018 is 73-91
Baby Boomers            born 1946-1964        age in 2018 is 54-72
Generation X              born 1965-1981         age in 2018 is 37-53
Millennials                  born 1982-2000        age in 2018 is 18-36

The news media and others have jumped the gun on Generation Z. Our next generation MIGHT be arriving, but we need to see a significant change from Millennials in the next generation’s Core Values before accurately announcing their arrival.

If someone is born near the “cusp” where two generations’ birth-year brackets touch, that person might possess a few core values of each generation. It can get a little gray at the edges of each generation.

Regrettably, when generational study became so white-hot in the decade of the 2000s, a million-and-one people jumped into speaking and training. Many are responsible, but here comes the Big Alert: right now, there is some horribly inaccurate generational content and opinion bouncing around “out there.” Old-fashioned “carpetbaggers” seeking a quick buck are creating generations that don’t exist, conducting invalid online “surveys” that they then try to pass off as statistically valid “research,” and committing other abuses of this discipline. Very, very troubling. So: beware the bad content.

FN: What are the general factors that define a generation? Give us a copy of examples each for Baby Boomers, Gen-Xers, and Millennials.
Underwood: Generations are defined solely by the set of basic and major CORE VALUES that are considered virtually permanent for life.

Boomers: The times and teachings of their formative years burned into their generation core values of:  idealism; empowerment; engagement in America, and the willingness to fight for women’s rights, civil rights, the environment, and other social corrections their nation needs to make. And Boomers – whose parents had suffered unimaginably through The Great Depression, World War Two, and the Korean War – have spent their lives trying to live up to the opportunities their parents gave them, and so they became the work-driven “golden generation in the American workplace.” Their formative years in America have been described as A Golden Age For Kids.

Gen X: Came of age just as America was beginning to unravel, and so X’ers formed a set of core values dramatically different from Boomers; the breakdown of the family unit, with skyrocketing divorce and dual-career (thanks to the Women’s Movement), time-starved, absentee parents who gave America its first generation of Latchkey Kids who came home after school to empty houses; X’er kids saw their nation’s leaders and heroes in government, business, and sport lie and cheat and fail to deliver on their promises and often go to prison; they were the kids whose loyal and hard-working parents were laid off while the boss-man received a year-end bonus in part BECAUSE he laid them off (and yes, back then, it was overwhelmingly “he,” women were not yet penetrating the executive suites). So in those unique times, X’ers formed unique core values:  independence; self-reliance; cynicism towards our major institutions; and distrust of older people, in general.  But lots of positives, too: the first Computer Generation; the first generation to see women and minorities ascend in the workplace; the era of the Surging Female; TV shows that celebrated African-American life. But for many white X’er boys, it was a very difficult passage, especially in all of those divorced households in which Mom had custody and divorced Dad was only around every-other-weekend, if that. The experience of American boys that began in the 1970s – the bewilderment, discouragement, disengagement, and rage – would explain, decades later, the election of President Trump.

Millennials: In the 1980s, American parents were getting their first long look back at the way they were raising their GenX kids in a dramatically altered family environment (thanks to the new phenomena of dual-career, time-starved, and permissive parents and skyrocketing divorce). They decided they were doing a couple of things wrong: parents needed to be a bigger physical presence in their children’s lives; and, they needed to give the kids more boundaries and rules. So parenting – in other words, the “teachings” – changed in the early 1980s and ushered in the era of protective, always-present Helicopter Parents with its “soccer moms” and “Nascar dads.” And kids born in this new environment would come of age molding different core values, as a result. Self-esteem, optimism, close relationships with parents and teachers, and a greater trust in adults than X’er kids had felt. And because their parents were overwhelmingly Boomers, they also inherited core values of idealism, social activism, empowerment, and engagement. These kids, who would become The Millennial Generation when they began to graduate from high school at the turn of the Millennium, also would be profoundly different from GenX as a result of the times, especially The Tech Revolution, school shootings, war against terrorism, The Great Recession, epidemic executive corruption, government dysfunction and paralysis, and now today, the surging economy. These times would mold even more unique generational core values. Millennials are as damaged by technology as they are helped by it. They are very cynical, as are most Americans, towards rich powerful corporate executives and government leaders. They’re optimistic about their own long-term future but less certain about the short-term prospects of their nation. They’ve been staggered in early adulthood by The Great Recession. They also grew up fearing for their own physical safety on U.S. soil more than other generations because of the school shootings and acts of domestic terrorism (the Oklahoma City bombing occurred when the oldest Mils were 14; the Columbine school massacre occurred when they were 18; and on and on).

FN: Let’s cut right to the chase. When it comes to money, what is the primary difference in attitude and application between Baby Boomers, Gen-Xers, and Millennials.
Underwood: Our nation’s education system, regrettably, still does not include Personal Finance as a universal, coast-to-coast course for high school seniors or college students. So all generations step into the foreign land of adulthood and are instantly staggered by their own ignorance about money management. We must self-teach about handling money. Trial and error. And far too many of us make far too many mistakes with it.

Boomers: Came of age when America was absolutely unstoppable; thus, Boomers felt that if they worked hard and smart and ethically, the money would always be there. So they’ve always been free-spenders. The Great Recession of the late 2000s frightened them, and their generation lost more net worth from it than any other generation, but the losses have now largely been erased: investments and property values have recovered. But:  Boomers are bailing out their adult Gen X and Millennial children far beyond the historical point when those adult children should NOT be reaching into their parents’ pockets for help. So Boomers now have raided their retirement nest eggs – significantly – to help their kids. Boomers, at this moment, know they must now get very smart about Personal Finance and they seek not just generic “How To Prepare For Retirement 101” but instead BOOMER-CUSTOMIZED workshops by trainers who know how to take into account the unique core values that emerged from their generation’s unique formative years, because those core values STILL guide Boomer decision-making.

Gen X: They’ve generally assumed, because of the adult world’s stunning unreliability during their youth, that “I’m on my own, I’ve gotta take care of me because I can’t rely on my employer or my nation for much help.”  In their youth, they saw the prized American pact of two-way loyalty between employer and employee UNILATERALLY broken by the employer. And so X’ers understandably became the first significant job-hoppers in U.S. history, seeking greater financial security by changing employers and refusing to pledge blind loyalty to disloyal bosses. Self-reliance. Individualism. X’ers have lived with employment and income uncertainty, which has toughened them. They’re sturdy. Today, they are still the primary “parent” generation, so they face mortgages and college expenses. But the oldest of them – and financial services need to know their generation is about to significantly transform these next life stages – are now advancing into empty nest, grandparenthood, and for those in certain (mostly government) occupations, retirement forty years before they’ll die, which thus means another life stage of Career Next.

Millennials: Came of age during much better times for kids; instead of absentee parents, they experienced constantly hovering helicopter parents; instead of national leaders failing regularly, they saw some new faces who DID demonstrate trustworthiness. Optimism; empowerment; engagement; and other Boomer-like values. And then Millennials began to enter adulthood in the early 2000s, and WHAM: The Great Recession. Unemployment. Under-employment. Unprecedented college debt. Unprecedented credit-card debt. Mom and Dad laid off. And yet, because of the unique times and teachings of their formative years, Millennials still possess core values of optimism and enthusiasm about their own futures. Millennials have surpassed X’ers as the most frequent job-hoppers in U.S. history. They are as damaged by The Technology Revolution as they are helped by it (it was beyond their control; they were KIDS!) and they know it and want help in overcoming the damage. They’ve gotten off to the rockiest start in the workplace of any generation. And yet, they’re almost certainly going to become a truly superior career generation. And like Boomers, they want to save the whole damned world, so they probably will. Their generation has had a singular experience with money; day by day, they’re getting smart about personal finance but still need more GENERATIONALLY-CUSTOMIZED education and knowledge that, once again, TAKES INTO ACCOUNT THEIR UNIQUE CORE VALUES THAT EMERGED FROM UNIQUE FORMATIVE YEARS’ TIMES AND TEACHINGS.

FN: You mentioned how economic downturns and dramatic stock market drops may have created a negative impression on investing for both Gen-Xers and Millennials. What other cultural events may have caused them to become more cynical and less trusting than Baby Boomers?
Underwood: Four years ago in Washington, D.C., I gave the keynote speech to 1,300 corporate board directors at the national leadership conference of the National Association Of Corporate Directors. When I finished and asked for questions, a Gen X gentleman stood and said, “I work in the mortgage industry; if we lower our lending rate by a full percentage point, will Millennials finally start buying houses?” My answer: “If I’m a Millennial, I look at the Big Banks and Wall Street and your lending industry and see only the CEOS whose greed and corruption crashed our economy with The Great Recession. I see an industry that triggered the event that cost my parents their jobs and threw them into financial suffering and uncertainty. I see an industry whose executives forced me, just out of school, into unemployment and underemployment. I see an industry whose executives have damaged, almost certainly for decades, my personal finances. I see an industry whose leadership greed and corruption is forcing me to delay marriage, parenthood, the career I actually want. And that same greed has burned into my brain a belief that I cannot financially commit to the long-term loans of car buying and home buying because I don’t know if I’ll have a paycheck next week or next year. So, will a point drop in your lending rate lure Millennials? You tell me.”

Now, with that said, older Millennials are beginning to feel more confident about their own finances. Some Millennials are billionaires, thanks to Tech (Mark Zuckerberg). And as a generation, they’re beginning to buy starter houses because the clock is ticking on child-bearing. But Mils have been burned. And now, even with a surging economy, we see the continuing, unfathomable cesspool of Wells Fargo, which is the new Poster Child for – and a front-page reminder to Millennials of – banking’s greed and corruption. Yes, Millennials’ long-term optimism is still in place. But they are much less certain about their nation and its direction. And so their generation is cautious with its money. And the same is basically true with Gen X, whose members are even more skeptical than hopeful Millennials.

FN: If this lack of trust in the stock market holds, what can convince these younger generations that, long-term, it remains in their best interest to invest in equities?
Underwood: There’s only one answer: Track Record. The younger generations are very savvy consumers. They’ve heard every marketing and advertising hustle. So their message to Wall Street is: Show me. Prove it. Don’t advertise your customary bullshit to me. Don’t show me your ad that promises me that you’re a good, decent, ethical, compassionate firm. I’m not buying your advertising. Prove your trustworthiness with Track Record.

Older generations tend to view the stock market as The Only Game In Town for serious investment. Don’t be surprised if X’ers and Millennials create an alternative investment arena. Wall Street greed and corruption have savaged their lives.

FN: We know the younger generations have a sometimes distracting attention to technology. Does this mean the age of personal service is going away to be replace by “robo” everything? How can today’s financial professionals reframe their unique value proposition to millennials to avoid being replaced by a machine?
Underwood: America and the world are still trying to understand the impact of the Tech Revolution on just about everything and everyone. Banks, just like retailing and grocery and many other sectors, are scrambling to answer that question: is there a place for personal service? In financial services, the opportunity that is not going to go away anytime soon is the need to EDUCATE individuals of all generations on personal finance and to then provide customized, individualized, and long-term guidance. Boomers and Millennials should be especially receptive to in-person, eye-to-eye services; they’re social animals who love human interaction, despite Tech’s relentless diminution of it. X’ers will also like customized service but, more than any other generation, they will probably be content with digital communication, not so much face-to-face. And as always in generational study, we must remember that Everyone Is An Individual and, No We Should Never Use Generational Knowledge To Unfairly Stereotype Anyone. But used properly, generational knowledge WILL serve as a trustworthy lighthouse that will guide us through our dealing with members of all generations as all of them advance through The Tech Convulsion.

FN: Is it possible for baby boomers to offer financial advice to the younger generation, or does each generation prepare to get such advice from their generational peers?
Underwood: The strongest negative bias between the generations is this: Gen X’ers have a pretty big chip on their shoulders against Boomers. X’ers don’t give out trust easily, and so they might prefer to deal with fellow X’ers. Or, if financial services professionals undergo the training to truly UNDERSTAND the entire life passage of all generations, but especially Gen X, then they can connect with them. Millennials, conversely, generally love older people and should embrace financial advice from both Boomers and Silents.

FN: So far, we’ve been talking about the generations as if they represent a single monolith. In reality, other factors can make one cohort within a generation take on the characteristics of another generation. For example, younger Baby Boomers and older Gen-Xers often share some commonalities. What other factors may cause differences within generations? How can we identify them? Give a few examples. And what about siblings born in different generations?
Underwood: Yes, many core values are multi-generational. Boomers and Millennials have a lot in common – idealism, empowerment, engagement, close relationships with parents, a sense of nation – because parts of their respective formative years are similar. The Silents and Gen X’ers, however, tend to be “island generations” in many ways, because their formative years’ times and teachings were so singular, and so their core values are singular.

And yes, some of the important times and teachings bridge multiple generations. The notion of “family” is a strong core value today amongst all generations. Also multigenerational: a weakening alignment with traditional religions and yet, at the same time, a strong belief that some kind of higher-power “God” does exist. Also today, there is a multigenerational cynicism and fear about the performance of corporate and government leaders: in what direction is our country being taken by so many idiots up there at the top?

When siblings are within about 5 or 6 years of each other in age and have a good sibling relationship, the older one CAN and usually DOES influence the core values of the younger one while they grow up together and BEFORE they become members of any generation. So if the older sibling is a future Boomer, and the younger sibling is a future Gen X’er, the Boomers might pull the Gen X’er up to Boomer core values. When siblings are further apart in age, the influence diminishes rapidly.  For example, if the siblings are 8 years apart, the older one graduates from high school and presumably leaves home when the younger one is only in the 4th grade.

There is also the sibling dynamic of “first child and second child”, which has been researched and seems very legitimate, but has little or nothing to do with generational dynamics.

FN: How do perceptions and expectations of retirement differ between the Silent Generation and the Baby Boomers? Between the Baby Boomers and the Gen-Xers? Between the Gen-Xers and the Millennials?
Underwood: Silents:  the system worked for them with career stability, saving wages, and – now – stable retirement. Because of their memories of The Great Depression, they were excellent at responsible money management. So today, they are financially better off than any generation at their current age in U.S. history. However, Silent blacks and Silent women living alone (single or widowed) are not as financially secure as white Silent men and married couples, because Silents are the generation whose minorities and females were heavily discriminated against through many of their career years.

Boomers: I book many speeches and training workshops with clients who want to know about Boomer Retirement. The short answer: Boomers, as they have their entire lives, will completely re-write the book on this next life stage. Modern science and medicine – and importantly, their own powerful core values – will enable and compel them to work until they drop, perhaps in a full-blown Career Next, or part-time or project-work or volunteering (perhaps for the Peace Corps). Boomers view the notion of Complete Retirement as nothing more than a high-speed highway to Death. Full retirement means growing old, losing purpose, being unproductive, no longer making a difference. As they continue to work, they will be important to the workplace. And continuing income will only increase their clout in the marketplace. A 2017 USA TODAY headline says this: “The economy is still all about – who else? – Boomers.”

Gen X and Millennials: Because of what they’ve witnessed, in their formative years and adulthood, most of them understand they will be working to near the end of their lives. The future of Social Security and Medicaid is uncertain. The advancements in science and medicine are about to increase life expectancy to an unpredictable new high, so if you truly no longer know how long you might live, then you don’t know how much of a cushion you’ll need for retirement, and so you can’t retire.

Since 1935, the year Social Security was created, Americans could begin to receive benefits at age 62. Do you know what our average life expectancy was in in 1935? 62. Men died at 60, women at 64, the average was 62.  Social Security was not designed to pay benefits for ten or thirty years. It was meant only to allow Americans to enjoy stability in their final two to three years, when they were too enfeebled to work. And so Americans worked until nearly the end. We’re about to return to that, and Gen X – and even more so, Millennials – will be the leading edge of this New Reality.

FN: What message do you feel is important to leave our readers with and why is it important?
Underwood: The field of Generational Study, despite too many quick-buck carpetbaggers who are hurling some junk information around, is valid. It has proven its importance and bottom-line benefit. Formal generational training, knowledge, and strategies are now imperative to all of American business, government, education, and religion. And in the important and rapidly-changing orbit of financial services, here’s the bottom line:

If we understand thoroughly what happened to each generation during its unique formative years, we can then make sense of the unique and powerful core values that guide that generation’s unique decision-making, including the decisions about their money. And when we are armed with that vital knowledge, we can then CONNECT with each generation in the marketplace, workplace, living room, house of worship, classroom, and down at the local tavern.

FN: Chuck, this is fascinating stuff! Thanks for sharing it with our readers. Generational analytics has been a topic long on the fringe. It’s time to go beyond the superficial coverage of the talking points and get knee-deep into the weeds of what’s really going on. The first one there will be crowned the new king of the hill. We look forward to hearing more from you on this topic!

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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