The Consumer in 2004

The Consumer

• Understanding consumer financial habits in 2004 from the Certified Financial Planner (CFP) Board of Standards consumer survey

Data collected from the CFP BOARD’S 2004 GENERAL MARKET CONSUMER SURVEY

[Survey participants said that they saved or invested 10% of their total income (median).

Consumers were asked to allocate their assets across three general risk definitions (as they perceived them). On average, 16% of assets are in perceived “high risk” vehicles, 31% are allocated to “moderate risk” instruments, and 53% are in “low risk” instruments.

An examination of how consumers allocate their assets shows real estate equity is the largest allocation at 32% followed by retirement savings plans (19%). CDs, money market and savings accounts compose 12% of assets while stock mutual funds are 6%. The balance is spread across individual stocks, pensions,
annuities, bond funds, individual bonds and other miscellaneous allocations.]

Data from: Certified Financial Planner Board of Standards’ 2004 General Market Consumer Survey

Analysis of the surveyed information:

• This information is important to understand because it depicts how the consumer assigns a portion of their income. Depending on these factors and other economic aspects that affect the consumers financial spending, we are able to identify the discretionary income that consumers have left that they will use on fashion industry goods.


• This graph above shows how the consumer assigned their invested income in 2004. This information demonstrates that the consumers surveyed assigned most of their invested money in real estate then any other area. This is important to note in 2004 because of how this allocation of fiances is affecting the consumer market economically in 2008 and in the coming years.
  
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Data collected from from the (CFP) BOARD’S 2004 GENERAL MARKET CONSUMER SURVEY


[Three lifestage groups:

• Up and Comin: Ages 20-29 (30% of survey respondents)


• Mid-Life: Ages 49-54 (31% of resondents)


• Retirement Cusp: Ages 59-69 (39% of respondents)]

Data From: Certified Financial Planner Board of Standards’ 2004 General Market Consumer Survey

The Federal Reserve Board’s Survey of Consumer Finances for 2004 dicusses the key changes in 2004 from years past on net worth finaces and real estate:

[Three key shifts in the 2001–04 period underlie the
changes in net worth. First, the strong appreciation of
house values and a rise in the rate of homeownership
produced a substantial gain in the value of holdings
of residential real estate. Second, despite the general
recovery of prices in equity markets since 2001, the
direct and indirect ownership of stocks declined, as
did the typical amount held. Third, the amount of
debt relative to total assets increased markedly, and
the largest part of that increase was attributable to
debt secured by real estate.]

Data Collected from the: The Federal Reserve Board’s Survey of Consumer Finances for 2004

Analysis of the surveyed information:

• This information helps identify the psychographic way a consumer thinks about financial situations in different consumer segments. In understanding how the consumer feels about their financial situation we are able to apply this knowledge in understanding why the consumers make purchases.


• This information collected above show how the consumers surveyed were feeling about their financial situation in 2004. The tables point out that the in 2004 the more financially confident consumers are in the older consumer segments and the less are in the younger consumer segment. This is important to identify because it helps identify different traits between consumer segments that can be applied to understand what their discretionary income is used for.
  

Sources:

Certified Financial Planner Board of Standards’ 2004 General Market Consumer Survey

The Federal Reserve Board’s Survey of Consumer Finances for 2004