• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick The new class war: A wealth gap between millennials
Editor's Pick

The new class war: A wealth gap between millennials

by April 30, 2024
by April 30, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The wealth gap between rich millennials and the rest of their age group is the largest of any generation, creating a new wave of class tension and resentment, according to a recent study.

Even as the vast majority of millennials struggle with student debt, low-wage service-jobs, unaffordable housing and low savings, the millennial elite are surpassing previous generations. According to the study, the average millennial has 30% less wealth at the age of 35 than baby boomers did at the same age. Yet the top 10% of millennials have 20% more wealth than the top baby boomers at the same age.

“Millennials are so different from one another that it is not particularly meaningful to talk about the ‘average’ Millennial experience,” wrote the study’s authors, Rob Gruijters, Zachary Van Winkle and Anette Eva Fasang. “There are some Millennials who are doing extremely well—think Mark Zuckerberg and Sam Altman—while others are struggling.”

The study finds that millennials — typically defined as those between the age of 28 and 43 today — have faced repeated financial headwinds. Coming of age during the financial crisis, they have lower levels of homeownership, larger debts outweighing assets, low-wage and unstable jobs, and lower rates of dual-income family formation.

At the same time, the authors say the top 10% of millennials have benefited from greater rewards for skilled jobs. As they put it, “The returns to high-status work trajectories have increased, while the returns to low-status trajectories have stagnated or declined.”

The millennials who “went to college, found graduate level jobs, and started families relatively late,” ended up with “higher levels of wealth than Baby Boomers with similar life trajectories,” according to the report.

A Versace store on Rodeo Drive in Beverly Hills, Calif. Eric Thayer / Bloomberg via Getty Images

There may be another factor creating so much wealth among millennials: inheritances. In what’s known as “the great wealth transfer,” baby boomers are expected to pass down between $70 trillion and $90 trillion in wealth over the next 20 years. Much of that is expected to go to their millennial children. High-net-worth individuals worth $5 million or more will account for nearly half of that total, according to Cerulli Associates.

Wealth management firms say some of that wealth has already starting trickling down to the next generation.

“The great wealth transfer, which we’ve all been talking about for the last 10 years, is underway,” said John Mathews, head of UBS’ Private Wealth Management division. “The average age of the world’s billionaires is almost 69 right now. So this whole transition or wealth handover will start to accelerate.”

Tensions between millennial classes are likely to escalate as more wealth is transferred in the coming years. Wealth displays on social media by millennial “nepo babies” could add to the intra-generational class war and drive nonwealthy millennials to overspend or create the appearance of lavish lifestyles to keep up.

A survey by Wells Fargo found that 29% of affluent millennials (defined as having assets of $250,000 to over $1 million of investible assets) admit they “sometimes buy items they cannot afford to impress others.” According to the survey, 41% of affluent millennials admit to funding their lifestyles with credit cards or loans, versus 28% of Gen Xers and 6% of baby boomers.

The battle between rich millennials and the rest could also shape their attitudes toward wealth. For over four decades, the vast majority of millionaires and billionaires created in America have been self-made, mostly entrepreneurs. A study by Fidelity Investments found that 88% of American millionaires are self-made.

Yet inherited wealth could become more common. A study by UBS found that among newly minted billionaires last year, heirs who inherited their fortunes racked up more wealth than self-made billionaires for the first time in at least nine years. And, all the billionaires under the age of 30 on the latest Forbes billionaires list inherited their wealth, for the first time in 15 years.

A pedestrian carries a Victoria’s Secret shopping bag while waiting to cross a street in New York.Demetrius Freeman / Bloomberg via Getty Images file

The surge in wealth among millennial heirs is also creating a lucrative new market for wealth-management firms, luxury companies, travel firms and real estate brokers.

Clayton Orrigo, one of the top luxury real estate brokers in Manhattan, has built a thriving business on moneyed millennials. The founder of the Hudson Advisory Team at Compass has sold over $4 billion in real estate and regularly brokers deals over $10 million. He says the “vast majority” of his business lately is from buyers in their 20s and 30s with inherited wealth.

“I just sold a $16 million apartment to someone in their mid-20s, and the buyer accessed the family trust,” he said. “The wealth that is behind these kids is extreme.”

Inherited wealth has become Orrigo’s specialty. He says he works on forging close relationships with family offices, trusts and young money elite mingling at New York membership clubs like Casa Cipriani.

The pattern is familiar: A wealthy family calls wanting a rental for their son or daughter; a few years later, they want a $5 million or $10 million two-bedroom condo to buy in a new, high-security building downtown.

“My gig is working very quietly and very discreetly with the wealthiest families in the world,” Orrigo said.

This post appeared first on NBC NEWS
You Might Also Like
  • Amazon says employees who don’t comply with the return to office mandate may not get promoted
  • Peloton announces Ford exec, founder of Apple Fitness+ Peter Stern as its next CEO
  • IoT connections and revenue will grow at a steady pace despite supply chain disruptions and economic worries
  • Summer vacation is increasingly for the rich
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Biden administration to require advanced safety tech on all new cars and trucks
next post
JPMorgan CEO Jamie Dimon hopes for soft landing for U.S. economy but says stagflation is possible

You may also like

IoT connections and revenue will grow at a steady pace...

February 28, 2023

Quectel Announces New Generation 5G Release 17 Module Series to...

February 27, 2023

How IoT is improving employee welfare and safety in a...

November 30, 2022

Bloomberg plans to integrate GPT-style AI into its terminal

April 15, 2023

CEOs want workers back in offices—this company is giving workers...

February 21, 2025

Bronfman’s Paramount bid could keep Shari Redstone involved at the...

August 26, 2024

Nvidia CEO says he was wrong about timeline for quantum,...

March 21, 2025

Food insecurity worsened after pandemic SNAP aid expired, report finds

June 27, 2023

OpenAI releases Sora, its buzzy AI video-generation tool

December 10, 2024

Fed Chair Jerome Powell says inflation has been higher than...

May 15, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,632 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Semtech Corporation Completes Acquisition of Sierra...

    January 13, 2023

    Don’t freak out about the stock...

    February 16, 2024

    FTC asks to delay Amazon Prime...

    March 12, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here