The wealth gap among millennials is widening, with the top 10% of the generation accumulating more wealth than their predecessors. While the majority of millennials face challenges such as student debt, low-wage jobs, and unaffordable housing, a small elite group is thriving. According to a recent study, the average millennial has 30% less wealth at the age of 35 than baby boomers did at the same age. This disparity is creating a new wave of class tension and resentment among millennials.
Millennials, typically aged between 28 and 43, have faced numerous financial challenges. Coming of age during the financial crisis, they have lower rates of homeownership, higher debt levels, and unstable low-paying jobs. The top 10% of millennials, however, have benefitted from increased rewards for skilled work. This has led to a division in wealth accumulation within the generation, with some millennials far outpacing others.
One factor contributing to the wealth gap among millennials is the anticipated “great wealth transfer” from baby boomers to their children. Baby boomers are expected to pass down trillions of dollars in wealth to their millennial offspring. This transfer of wealth, combined with inheritances, is expected to further widen the gap between affluent millennials and the rest of their generation.
The increasing wealth disparity among millennials could lead to tensions and differences in attitudes towards wealth. Affluent millennials are more likely to overspend to maintain a certain lifestyle and impress others. A study found that a significant portion of affluent millennials fund their lifestyles through credit cards or loans, indicating a potential problem with financial management among this group.
Traditionally, millionaires and billionaires in America have been self-made individuals, primarily entrepreneurs. However, there is a growing trend of inherited wealth among the younger generation. The latest Forbes billionaires list shows that all billionaires under 30 inherited their wealth, a shift from the past. This rise in inherited wealth is changing the landscape of the wealthy elite and creating new opportunities for wealth-management firms and luxury industries.
The surge in inherited wealth among millennials is creating a lucrative market for luxury industries such as real estate. Wealthy millennials with inherited fortunes are driving demand for high-end properties and luxury goods. Real estate brokers like Clayton Orrigo are tapping into this market by catering to young buyers with family wealth. Orrigo’s success in selling multi-million dollar properties to young individuals highlights the growing influence of inherited wealth in various sectors.
The widening wealth gap among millennial classes is a complex phenomenon fueled by factors such as inheritances, financial challenges, and changing attitudes towards wealth. As the transfer of wealth from older generations accelerates, the disparities among millennials are likely to deepen, leading to potential social and economic implications for the future.