Why is the RV industry booming and will it continue?

RV Industry

Why is the RV industry booming and will it continue?

As an avid RVer myself, I have the privilege of belonging to various RV groups and I have also interviewed various RV insiders in the sales and campground industry. I have found there are several factors driving the growth of the industry. However, I fear the future of RVing will continue but for different reasons.

Currently there is a large baby boomer generation retiring and if they where smart and stayed in their retirement accounts in 2008-2012, today those accounts have grown as much as 400% since the bottom.

 S&P 500 March 2009 $638 – S&P 500 October 2017 $2575

S&P 500 Chart

This is giving retires a sense of affluence and they may seem to have disposable income to invest in recreation. With this new-found wealth they are splurging on luxuries they feared where no longer available to them after taking such a large loss in the market and home values.

One senior couple we spoke with said they where entering retirement in 2010 and feared they wouldn’t have enough to make it, their home mortgage was underwater and their 401k’s where cut by 60% seemly over night. They choose to continue working part-time jobs and now are able to truly retire and full-time RV the country. They sold their home and purchased a luxury Class A motor home.

On the other end a large number of millennials are entering the RV market on the low-end of the spectrum. Finding it more affordable to purchase a small travel trailer and vacation locally than purchasing airfare and hotel accommodations for a family of 4.

A couple we recently spoke with said they where able to take a family camping trip within 8 hours of their home to a family friendly park for 10 days all for under $1200. Airfare to a traditional family vacation location would have exceeded this price alone.

The last piece of the puzzle is the lower income or unemployed class seeking refuge in a camper as a full-time residence since the price of housing has risen sharply, wages stagnated and with the advent of the Affordable Care Act full time jobs have become hard to come by.

So what do I mean by the future of RVing will continue to rise but for different reasons?

I study market trends and am an avid investor, and the as the old saying goes what goes up must come down.

Our stock, bond and real estate markets have been on a skyward rise since 2012 with no end in sight and complete euphoria has taken hold in all markets except for precious metals.

That’s great right?

Yes and no, currently investments, properties, and retirement portfolios are gaining in value on the backs of 0% interest rates for so many years, also QE1-3 (Quantitative easing) has driven the Feds balance sheet in the 4 trillion dollar range and the national debt has doubled in the last 8 years to exceed $20 trillion. Not to mention the hidden liabilities of Social security, federal pensions, and Medicare on top of the national debt brings us somewhere around $150 trillion in the hole.

So what does this have to do with RVing you ask.

Well lets put it like this, lets pretend America is a family living in a nice suburban house, driving two nice cars, kids in private school and country club memberships, you get the picture. But all of this is provided by debt. Now let’s say America came into work in 2008 and the boss said you no longer have a job. Well most people would say ok time to sell the house, the cars, cancel the memberships and the kids are going to public schools till we sort this out, but instead America said we are fine and whipped out the credit cards. It has been paying the mortgage on Visa, the cars on MasterCard, and kid’s school with Discover. Well now the balances are starting to reach their limits and the credit card companies are going to start raising those interest rates…..now what?

When those interest rates on the borrowed money increases it will become very difficult as a country to service that debt, at which point something big will have to happen. Perhaps a default on our debt sending the dollar’s value crashing or a major restructuring of our monetary system, only time will tell. What will be certain is the gravy train of increasing markets will end very abruptly and so will much of the artificial wealth currently keeping everyone on cloud nine.

It seems “America” will be loosing that house and moving into group number 3 we mentioned above and will be living in campers as a necessity not recreationaly.

With 70% of American with less than $1000 in savings most of us are a paycheck away from living in a camper. Retires who are counting on their investments will have to settle for social security if it still exists and hyper inflation will most likely be a factor as well, see Venezuela as an example.

So what is the solution?

It’s hard to say but for starters we as a country and as individuals need to start becoming accountable for our own finances. We need to stop taking on new debt and start aggressively paying down existing debt. We also need to start collecting assets in the form of cash reserves, physical precious metals and free and clear property. We also need to prepare with disaster supplies and evacuation plans should a natural or man-made disaster occur.

We also all need to take a hard look at how we can provide for ourselves without the aid of the government. If you are counting on social security as your sole source of retirement income you need to take a serious look at how you can become more proactive and view social security as a bonus not a sole source of income.  I hope you will take the next steps and start building your own future. Check out some of my other blog posts for ideas on how to become debt free. Good luck.


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