A windfall is set to fall into the laps of millennials over the course of the coming decades, a new report suggests, shifting the power dynamic in the economy away from boomers.
That’s according to property broker Knight Frank’s 2024 Wealth Report released this week, which reveals that over the next 20 years, $90 trillion in assets will be transferred between generations in the U.S. alone. By Knight Frank’s estimation, this shift will make affluent millennials “the richest generation in history.”
Previous reports show this figure at a lower $84 trillion, but nonetheless confirm a shake-up in the foundations of spending power across the globe.
Indeed, millennials are expected to be five times richer in 2030 than they were approaching the beginning of the decade, courtesy of the Great Wealth Transfer—but it hasn’t been an easy road for them thus far.
Millennials are among those who have been hardest hit by an increasingly inaccessible housing market—with Redfin finding that empty nesters own twice as many large homes as millennials with kids—as well as a jobs market irreversibly altered by a global pandemic.
Moreover, they’re dealing with crippling student debt, are facing down becoming a “sandwich generation” paying for both adult children and aging parents, and have long been told how lazy they are.
It’s perhaps no surprise, then, that a 2022 report from Alliant Credit Union found that 53% of millennials are waiting on an inheritance of at least $350,000 from their parents—though their boomer parents say they intend to leave $250,000 or less.
“There is evidence that the youth of today blame the generations before them for the challenges that they and the planet face today,” said Mike Pickett, director of London-based Cazenove Capital, in the report.
Housing focus
The property broker added that housing will continue to be a focus of spending for the next generation, as those born between 1981 and 1996 may have struggled to get on the housing ladder thus far. Even at the highest end of the income ladder, growing a property portfolio is a key concern among those born between 1981 and 1996.
The study shows 23% of female ultra-high-net-worth individuals (UHNWI, valued at $30 million or above) are considering buying a home in 2024, with 21% of male UHNWI expecting to make a similar purchase this year. Wealthy Gen Zers feel the same, with 20% of those born from the mid-1990s to the early 2000s planning an acquisition.
But unlike those before them, younger buyers don’t see housing as a way to make money. “I don’t think younger generations see residential property as a route to wealth creation in the same way as boomers or Gen X,” said Mike Pickett, director of London-based Cazenove Capital.
He added: “In particular, the low interest rate environment and impressive growth in house prices of the past 15 years is unlikely to be repeated in the next 15. I also think there is some evidence that Gen Z may be happier to rent property or lease assets such as cars, and to adopt subscription-led lifestyles.”
Reaching the 1%
And if you’re hoping to reach the lofty heights of the richest 1% in the U.S. you need $700,000 more than last year.
The report found that breaking into the world’s top-one-percent club is getting more difficult every year. In the U.S. in 2023, individuals needed a net worth of $5.1 million to be considered in the richest echelons of society. By 2024 this figure rose to more than $5.8 million, an increase of approximately 14%.
But Americans determined to make the cut won’t need as much wealth as they would in other countries. Monaco, for example, requires a net worth of $12.88 million to “join the club,” an increase from $12.4 million last year.
However, making it into the 1% club doesn’t guarantee a spot in the VIP section: ultra-high net worth (UHNW). UHNW individuals need to have $30 million to their name in order to be considered in the pack—a figure well above the 1% for most nations.
Those in this illustrious group have also seen their net worth climb higher in the past year, with the AI boom helping the world’s richest add $150 billion to their portfolios.