A Generational Wealth Transfer Is Coming, But It's Not Going to Help The Poor & Working Class.
Many millennials are currently grasping in frustration at long-held American Dreams like homeownership, a steady job and an affordable cost of living. However, over the next twenty years, Millennials are poised to inherit some $90 trillion of assets and become the richest generation in history – but only the ones who already come from affluent families, potentially deepening wealth inequality further.
Between now and 2044 in the US, the Silent Generation and Baby Boomers are expected to hand over the reins of their significant wealth to Millennials, according to The Wealth Report, a periodic report from global property consultant Knight Frank.
But whether you’re a Millennial on the receiving end of that wealth transfer is largely a lottery of birth.
Ultimately, this wealth shift is a result of inheritance from prior generations, largely involving property but also other assets. It will bring “seismic” changes to how wealth is put to use, said Liam Bailey, global head of research at Knight Frank, in a statement.
The research also showed that affluent young people are less likely to see property or real estate as a way to build wealth in the future.
“The low interest rate environment and impressive growth in house prices over the past 15 years is unlikely to be repeated in the next 15,” Mike Pickett, director of Cazenove Capital, said in the report. There’s evidence, he said, that the following generation, Gen Z, may be more comfortable renting a home, leasing a vehicle and living a subscription lifestyle than prior generations.
He added that not only will wealth be transferred to these younger people, but there are a variety of new ways to build wealth.
“It goes beyond a simple shift of existing wealth,” Pickett said. “I think the diversity of opportunity to create wealth has also grown — for example, there are YouTubers worth tens of millions. First-generation wealth creation is on the rise, as is the array of entrepreneurial routes to create it.”
So not only is the wealth basically being transferred from Granddad to Grandkid, but the Grandkids' peers have to rely on things like making constant YouTube content to achieve a semblance of that lifestyle (and sorry, but Mr. Beast and the Hilton Family's children may both have money, but the later will never have to grind).
Also, the Millennials' lack of interest in real estate may come from how hard it is for them to even buy a house.
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