A recent study found that there is a fresh wave of class conflict and animosity due to the widest wealth difference of any generation between affluent millennials and the rest of their age group. (Photo : by Helena Lopes / Unsplash)
A recent study found that there is a fresh wave of class conflict and animosity due to the widest wealth difference of any generation between affluent millennials and the rest of their age group.
The millennial elite is outperforming earlier generations despite the fact that the great majority of millennials suffer from college debt, low-wage service employment, costly housing, and minimal savings.
The average millennial, according to the survey, is thirty percent poorer at age 35 than baby boomers were at the same age. However, compared to the wealthiest baby boomers at the same age, the top 10% of millennials are 20% wealthier.
According to the report, millennials, who are now classified as people between the ages of 28 and 43, have frequently encountered financial difficulties. They came of age during the financial crisis, hence they had lower rates of dual-income family formation, higher debt to asset ratios, lower levels of homeownership, and low-wage, precarious occupations.
The top 10% of millennials, according to the authors, have profited from higher compensation for skilled work at the same period. The returns to high-status employment trajectories have grown, whereas the returns to low-status trajectories have decreased or remained unchanged, as they said.
According to the survey, millennials who "started families relatively late, found graduate-level jobs, and went to college" ultimately accumulated "higher levels of wealth than Baby Boomers with similar life trajectories."
It's possible that inheritances are another element contributing to millennials' extreme wealth. Over the next 20 years, baby boomers are predicted to transmit between $70 trillion and $90 trillion in wealth, a phenomenon known as "the great wealth transfer." Most of that is anticipated to benefit their millennial offspring. Nearly half of that amount will come from high-net-worth people who have at least $5 million in wealth, according to Cerulli Associates.
According to wealth management companies, a portion of that money has already begun to pass on to the following generation
As more money is transferred in the upcoming years, tensions between the various millennial classes are probably going to get worse. Social media wealth displays by millennial "nepo babies" have the potential to exacerbate the generational class divide within the generation and push less rich millennials to act wealthy or splurge in order to stay up.
According to a Wells Fargo survey, 41% of affluent millennials admit to funding their lifestyles with credit cards or loans, compared to 28% of Gen Xers and 6% of baby boomers. 29% of affluent millennials, defined as having assets of $250,000 to over $1 million of investable assets, admit they "sometimes buy items they cannot afford to impress others."
The conflict between affluent millennials and the rest may also influence how they view money. The great majority of American millionaires and billionaires-mostly business owners-were self-made over the course of more than 40 years. According to a Fidelity Investments research, 88% of millionaires in America are self-made.
However, inherited money could spread more widely. According to a UBS analysis, heirs who inherited their riches were wealthier than self-made billionaires among newly minted billionaires last year for the first time in at least nine years. For the first time in fifteen years, every billionaire under thirty on the most recent Forbes billionaires list inherited their fortune.
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