Gen Z and millennials are lost when it comes to investing, Companies are using AI, Consumers now buying store brands over national brands, You May be Entitled to Spousal Social Security & More

Gen Z and millennials are lost when it comes to investing, but it’s not their fault

Gen Z, which ranges from 13- to 28-year-olds and millennials, which are between 29 to 44-years old really are having a hard time accepting traditional investing values. I have to agree that many baby boomers have steered the younger generation down a path of false hope. Such as the idea that you need to go to college and get a degree to get a good job. Currently only 30% of graduates with a four-year degree are finding an entry level job in their field. Another area that is out of their reach is buying a home to help grow their wealth. Today only 32% of 27-year-olds own a home versus 40% of boomers and Gen Xers when they were 27. Thanks to social media and podcasts that encourage risky behavior many "investors" in the younger generations are turning to crazy investing options because they feel the old ways have failed them. The numbers are staggering from surveys with results such as nearly two thirds of Gen Z and millennials think the only way to build wealth today is with alternative methods like gambling and crypto. Other surveys show that nearly 50% of Gen Z owned cryptocurrencies and roughly 31% of 18- to 34-year-olds are online gambling with a sports book. So now they’ve been programmed to feel that a small chance for a large return is far better than losing money slowly overtime. The younger generations have become very impatient, and they would rather do something with crypto, prediction markets, and online betting that can get immediate results and maybe even huge gains quickly. I think part of this comes from social media where everybody shows how much they have and how wealthy they are, even though I’m confident they’re probably not doing that well and have tons of debt. I believe this is creating a false sense of hope for the younger generation that they can get a piece of the wealth pie as well. Unfortunately, this will probably not correct itself and younger people 10 to 15 years from now will be in worse shape than they are now because they did not buy a home, did not invest in a 401(k) or any real company that grows its earnings overtime.

Companies are using AI setting prices that may cost you more

AI has many benefits to both businesses and consumers, but sometimes the business that is paying for the AI will use it to benefit their bottom line and push costs higher for the consumers. Companies are now purchasing AI programs that can set the prices for their products on anything from grocery items to airline tickets. Remember all those data centers that are being built? Well, those data centers are holding all kinds of information about you and your shopping habits, which businesses can use to learn more and more about you. And because there is so much data out there, they can use that data to not just see what you like to buy but also how much you’re willing to pay for that product or service. AI programs now have the ability to see if you’re less price sensitive when shopping online, and the program can also show you higher priced goods first. On the other side if you are more priced sensitive, it may show you the lower priced goods first. This is giving some states and some people in Congress concerns that there is price discrimination that could be illegal. New York just passed a law in November that says companies must disclose to the consumer if they are using algorithmic pricing. There is so much information out there on pretty much everything consumers do. It is rather scary and it’s only going to get worse. By the year 2030 it's estimated they’ll be nearly 100 zettabytes of consumer data which is double what it is today. A zettabyte is equal to a trillion gigabytes, a billion terabytes, or 1,000 exabytes. It is also equal to 10^21 bytes, which is a 1 followed by 21 zeros. Needless to say, that's a lot of data! Maybe the better deals will be in person at the physical store since they will have no way of tracking your data when you show up in person and take something off the shelf to purchase.

Are you one of the consumers now buying store brands over national brands?

If you are, you are part of a growing trend in the United States. Data shows in the first half of 2025 sales of US private labeled brands in dollars was up 4.4% from a year ago, outpacing national brand growth of only 1.1%. From the most recent data, it now appears that store brands account for 21% of grocery purchases with affordability continuing to be the major draw. The biggest growth in private label brands has been in salty snacks and candy. You may be wondering where these private label products come from and you may be surprised to learn that they do come from your big national brand companies. For instance, Walmart’s Great Value brand is produced by Conagra and Sara Lee. The grocery chain Kroger relies on General Mills and Kellogg to make many of their store brands, and even Costco uses national brands to create Kirkland products. So why do they have lower prices? National brands can use lower grade ingredients or different formulas to save on cost. They are also dealing directly with the retail chains so they can receive big purchase orders that can save on manufacturing costs and there is no advertising cost as well. Your major national brand producers will not go out of business because they’re still producing many of the products even if you don’t realize it. Also, with 21% of grocery purchases going to store brands that still means 79% is going to the national brands because many times they just do have a better product. So, how much of your grocery basket is filled with store brand items?

Financial Planning: You May be Entitled to Spousal Social Security

If this situation applies to you, it is extremely important to take action now. With the repeal of the Government Pension Offset (GPO) earlier this year, many married retirees are eligible for Social Security spousal benefits now. This is different than a widow benefit that only becomes available after the death of a spouse, and applies even if the spouse never worked a job where they paid into Social Security. If one spouse is already receiving Social Security and the other spouse is age 62 or older but has never received a spousal benefit because they have a pension that prevented it, that spouse is now eligible to collect a Social Security spousal benefit. This can be collected as early as age 62 with benefits increasing for delaying up to age 67, so delaying beyond 67 means leaving money on the table. In cases where both spouses are already retired, the Social Security Administration is not aware that the pension earning spouse is now eligible for a spousal benefit, so they need to apply. Because Social Security generally pays benefits only from the date of application (with limited retroactivity), eligible spouses should apply as soon as possible to avoid permanently losing months of benefits they cannot later recover.

Will prediction markets make the stock market obsolete?

I saw this question in a major financial magazine, and I’m sure right now it looks like that could happen, but there is no doubt in my mind that the stock market will remain. The prediction markets are growing like gangbusters with companies like Robinhood generating $100 million in annualized revenue with 11 billion contracts trading hands over the past year. Global prediction markets reached $13 billion in November compared to just $100 million in April 2024. The options are established from a company called Kalshi who is one of the companies responsible for setting up these prediction markets. Bets on sports is very popular and on Sunday, December 7th, Kalshi saw $329 million traded on its platform with 97% coming from the sportsbook or bets on football games. If people think this is not gambling, just ask DraftKings and Flutter, who are big gambling sites that are losing business and have seen their stocks nearly cut in half from high to low this year. The solution they came up with was to set up prediction markets as well. The reason this is working so well is that they are regulated by the CFTC, which is the Commodity Futures Trading Commission. This is a federal entity, and what is interesting to me is it seems like a loophole since the states individually regulate gambling. This means gambling with prediction markets is open to anyone in the country but closed on other platforms. The way prediction markets work is based on a contract price, which can be anywhere from a penny to $0.99 and generally the brokerage firm takes between a penny or two per contract. It is based on the odds, so say there is a 70% chance that the Chargers will win on Sunday. This would be the yes side of the contract, and it would cost you $0.70 per contract. If you think the Chargers will lose, that will cost you $0.30 because the Chargers were favored to win. When the contract closes, whoever was right receives the full contract value of one dollar. This is big now because it’s exciting and the brokerage houses are making a lot of money off of these option contracts, but when people realize the amount of money they are losing, most of them will likely avoid prediction markets the same as they do trading futures on commodities and naked options. Unfortunately, the ones that will keep playing this game are those who are addicted to gambling and have a gambling problem. Prediction markets are not a wealth building investment because you can lose all your money. This is different than investing in stocks, where you own a small piece of a large company that has earnings, cash flow, and assets. I do believe this area will continue to grow in the near-term because it’s exciting for young people who have not yet experienced any type of financial downturn like the 2008 Great Recession. When there is financial calamity, these high risk gambling tactics come to an abrupt halt.

Is there too much debt in the US economy?

Using debt and leverage can be a great tool for investors and businesses and even the US government, but when it gets excessive, that can be a problem. In 2025 big ticket mergers and acquisitions of $10 billion or more set a record. While shareholders would do well with higher share prices, all this debt is putting risk on bonds and private debt. Also, bad mergers and acquisitions could hurt the stock price of the acquiring company. The bidding war for Warner Brothers between Netflix and Paramount is looking like there could be added debt somewhere between $50-$60 billion. This is the big one, but there are other debt deals that people and bond holders are absorbing through either private debt offerings or high-yielding bonds. The debt market in general is getting crazy in my view; there was $136 billion of consumer debt that was purchased by private credit companies. The number may not sound that high until you realize that’s a 1400% increase over 2024. This is more proof that the private markets and private debt is taking on more risk. Also, this year $1.7 trillion of investment grade corporate bonds have been issued, which is just under the record set in 2020 of $1.8 trillion. Even the Federal Reserve is jumping on the debt bandwagon purchasing $40 billion of treasury bills a month. Fed chair Jerome Powell said this was needed to provide short-term liquidity ahead of the April 15th tax payments. If the overall debt load gets too heavy, there will be problems such as private debt funds will start to see defaults, and as the demand for more debt increases the only way to feed that higher debt is to offer investors higher yields for the higher risk. This would then cause the 10-year treasury yield to rise and mortgage rates would not decline but could get closer to the 7% range and cause stagnation for another year the housing market. Investors need to understand where they're investing their money in 2026.

New revenue numbers from US tariffs

It appears based on the revenue numbers for November that about $30 billion a month will be coming to United States government from tariffs. Through November 2025 about $236 billion has been collected from tariffs. In the first few months of the year, the tariffs were only about 1/3 of the $30 billion now being collected monthly. It took a few months for the tariffs to ramp up to $30 billion a month and it looks like it didn't hit that level until August. Back in the spring, there were economists saying this is going to cause a recession and rising unemployment which has not happened. In January, the Supreme Court will release its ruling on whether the President of the United States has the authority to impose tariffs. This will be done based on the laws and the constitution that govern the President's authority. There are three possibilities that will come out in January. One is the President has the authority to impose tariffs, and nothing will change. Number two is the President does not have the authority to impose tariffs. They would then need to stop charging tariffs and refund the money, which would be a nightmare. The third potential outcome, which I believe is the most likely outcome is they will either have to get approval from Congress or do other things that allows the President to impose tariffs. If the Supreme Court rules that these tariffs are illegal, the stock market will probably rally in the short term, but long-term I believe this will be a problem for our country. If they approve the tariffs, even with certain requirements, the market will probably continue on its current path. I personally hope we continue with the tariffs and that the roughly $360 billion per year is used to pay down our current debt of $38.3 trillion. With the interest rate around 4.2% that would save over $150 million a year in interest payments.