Millennials: How the Great Wealth Transfer Could Make Them the Richest Generation
Written by
Vance Cariaga
Edited by
Daria Uhlig
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The financial world has not exactly overflowed with cheery news for millennials. Many of them came of age during the dot-com bubble of the late 1990s, entered adulthood about a decade later, during the Great Recession, and since have had to navigate the COVID-19 pandemic and skyrocketing inflation. But there is some good news: Millennials could become the richest generation ever, according to a recent report.
The not-so-good news? That wealth transfer will mainly benefit millennials with rich parents and grandparents.
A massive wealth transfer in the coming years will likely make affluent millennials “the richest generation in history,” according to the annual Wealth Report released earlier this year by Knight Frank, a global real estate firm. The report estimated that over the next couple of decades, about $90 trillion worth of assets will move from older generations, mainly baby boomers, to millennials.
But before millennials start shopping for expensive sports cars, they need to pay attention to the fine print — mainly, that “affluent” millennials will inherit much of that wealth. For everyone else, the wealth transfer might help pay a few bills, if that.
As CNBC reported, the Knight Frank study was published during a period when millennials and Gen Z adults are having a difficult time reaching the same financial milestones as those from previous generations. That’s mainly because of headwinds ranging from high rents and heavy student debt to stagnant wages.
These headwinds have prevented many millennials from being able to buy a home, which long has been considered a cornerstone of financial security. A recent report from Clever, a real estate data company, found that half of millennials said high interest rates are a barrier to homeownership.
A separate survey released last year by Northwestern Mutual found that out of all the generations currently earning a living or recently retired, millennials are the most anxious about money. More than half (53%) said financial uncertainty keeps them up at night. That compares to only 19% of boomers.
On a more positive note, millennials and Gen Zers have a lot more potential income streams than previous generations, thanks partly to technologies that didn’t exist as recently as 25 or 30 years ago, according to Mike Pickett, a director at Cazenove Capital.
“Next gen wealth owners share some key characteristics — from their expectations and mindset to their desires and what they are willing to pay for — which vary markedly from those of previous generations,” Pickett wrote in the Knight Frank report. “But it goes beyond a simple shift of existing wealth. I think the diversity of opportunity to create wealth has also grown — for example, there are YouTubers worth tens of millions.”
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