What generation is the most wealthy?

Baby boomers are the most wealthy generation, as the Federal Reserve has data showing that the average baby boomer now has a median net worth of $206,700 and the average net worth of boomers to be nearer $1.2 million.

Who will inherit boomer wealth?

Though who inherits wealth will largely be on a case-by-case basis. It's estimated that Gen X (those born between 1965 and 1980), millennials (those born between 1981 and 1996) and Gen Z (those born between 1997 and 2012), are expected to inherit $72 trillion of baby boomers' wealth, which is being dubbed the great wealth transfer.

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These Are 8 Key Habits of Boomer Millionaires

February 25, 2024

7 min Read

Written by Caitlyn Moorhead

Edited by Melanie Grafil

Susan Chiang / iStock.com

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The retirement age is now coinciding with the age of the baby boomer generation, and it is not an accident that they are the most financially prepared for it. Boomers have had to be adaptable and the ability to adapt to changing circumstances is, indeed, a large part of their financial success.

Boomer millionaires adjust their financial strategies as needed based on changes in their personal circumstances, the economy, and the investment landscape.

Read: 6 Genius Things All Wealthy People Do With Their Money

Quick Take: How Did Boomers Get Rich?

The economic prosperity and growth the U.S. saw after World War II was unprecedented and greatly benefitted the baby boomer generation. America became a superpower in the 20th century. With that, the amount of money that was dispersed to its citizens was bountiful. Here are some key reasons why boomers are so rich:

Real Estate Boom

The housing market then was much different from the one now and boomers were able to buy appreciating property which created substantial equity in their homes. Many were also able to pay off their mortgages before retirement which created a better financial situation where monthly expenses were concerned.

Social Security Benefits

Having this income in retirement allowed boomers to make other financial decisions such as investing their savings or buying property.

Less Expensive Education

Boomers were able to get a higher education, which led to better-paying jobs, without having to accrue a huge amount of student loan debt or high interest rates on loans.

Early Stock Market Investing

Long-term investment strategies and diversified portfolios yielded consistent and high returns for boomers.

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Defined Benefit Pension Plans

These guaranteed and secured pensions provided a reliable source of income and reduced the need to navigate more intricate wealth management, savings or estate planning.

A Saving Money Mentality

One of the best pieces of investment advice from boomers is how they approach saving for retirement or other pieces of their financial future. They live frugally and beneath their means to grow their wealth.

8 Boomer Money Habits Other Generations Should Use

Many boomers, who were born between 1946 and 1964, have gone on to achieve millionaire status. They often have certain habits that have helped grow their wealth substantially over time. Federal Reserve data estimates that the average baby boomer now has a median net worth of $206,700, and the average net worth of boomers to be nearer $1.2 million.

By observing and learning from these individuals you could pick up a few of their tips and tricks to help you with your personal finances. Here are eight money habits financial advisors would say to learn from boomers:

Develop a savings mentality
Live beneath your means
Strategize for long-term investing
Further your financial education
Set financial goals
Stay disciplined
Seek the advice of financial professionals
Diversification is key

1. Develop a Savings Mentality

Boomer millionaires are diligent savers and practice consistent ways to live frugally and save more money. They make it a habit to set aside a portion of their income regularly, whether it’s through employer-sponsored retirement plans like a 401(k) or other individual retirement accounts, or IRAs. The more you put away now, the better your retirement outlook fares.

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2. Live Beneath Your Means

Living below your means applies to a lifestyle that prioritizes saving over excessive consumption and spending. Boomers often opt for modest lifestyles even after achieving millionaire status. For example, they’ll live in a nice but modest home they own in full as opposed to continually making payments on an extravagant mansion.

3. Strategize for Long-Term Investments

Boomer millionaires understand the power of compound interest and long-term investing. They tend to invest in a diversified portfolio of stocks, bonds, real estate and other assets with a focus on long-term growth rather than short-term gains.

4. Further Your Financial Education

Many boomer millionaires continuously educate themselves about personal finance and investment strategies. They read books, attend seminars, and seek advice from financial advisors to make informed decisions about their money. The more you understand the money moves you make the more likely you are to see them succeed.

5. Set Financial Goals

Setting clear financial goals is another common habit among boomer millionaires. Whether it’s retiring early, funding their children’s education, or traveling the world, they set specific, achievable goals and work toward them diligently. Working toward a future goal keeps you more likely to diligently save in the present.

6. Stay Disciplined

Discipline is key to financial success, and boomer millionaires exemplify this trait. They stick to their savings and investment plans even during market downturns and times of economic uncertainty. It’s one thing to say you’ll start saving and another to actually do it, so be sure to keep with any financial plan you’ve mapped out for yourself.

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7. Seek the Advice of Financial Professionals

While they may be knowledgeable about finance, boomer millionaires also recognize the value of seeking advice from financial professionals. They consult with advisors to create personalized financial plans and receive guidance on complex investment decisions. Having this resource will help you multiply your wealth much faster than going it alone.

8. Diversification Is Key

Boomer millionaires understand the importance of diversifying their investment portfolios to manage risk effectively. They spread their investments across different asset classes and industries to minimize the impact of market fluctuations. Having more options for how you grow your wealth not only increases it faster but also helps protect you from a few bad investments.

Final Take To GO

Boomer millionaires have cultivated various habits over the years, thanks to their experience and savvy that has contributed to their financial success. By adopting these habits, Gen Z, millennials, Gen X and generations to follow can improve their financial well-being and work towards achieving their own millionaire status.

Despite their wealth, many boomer millionaires often generously prioritize giving back to their communities and supporting the causes they care about. Whether through charitable donations, volunteer work, or mentorship, they understand the importance of sharing their success with others which elevates the playing field for everyone.

FAQ

What generation is the most wealthy?
- Baby boomers are the most wealthy generation, as the Federal Reserve has data showing that the average baby boomer now has a median net worth of $206,700 and the average net worth of boomers to be nearer $1.2 million.
Why were baby boomers successful?
- Here are some of the main reasons why boomers have been so financially successful:
  - Real estate boom: The housing market then was much different from the one now. Boomers were able to buy appreciating property, which created substantial equity in their homes. Many were also able to pay off their mortgages before retirement, which created a better financial situation where monthly expenses were concerned.
  - Social Security benefits: Having this income in retirement allowed boomers to make other financial decisions such as investing their savings or buying property.
  - Less expensive education: Boomers were able to get a higher education, which led to better-paying jobs, without having to accrue a huge amount of student loan debt or high interest rates on loans.
  - Early stock market investing: Long-term investment strategies and diversified portfolios yielded consistent and high returns for boomers.
  - Defined benefit pension plans: These guaranteed and secured pensions provided a reliable source of income and reduced the need to navigate more intricate wealth management, savings or estate planning.
Who will inherit boomer wealth?
- Though who inherits wealth will largely be on a case-by-case basis. It's estimated that Gen X (those born between 1965 and 1980), millennials (those born between 1981 and 1996) and Gen Z (those born between 1997 and 2012), are expected to inherit $72 trillion of baby boomers' wealth, which is being dubbed the great wealth transfer.

Today's Top Offers

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