Gen Z vs Millennials: The Race to Become the Richest Generation

Gen Z vs Millennials: The Race to Become the Richest Generation

Gen Z vs Millennials: The Race to Become the Richest Generation, image by canva

Who Will Come Out on Top in the Battle for $90 Trillion in Wealth?

As millennials desperately cling to the fading American dreams of affordable housing, stable careers, and a low cost of living, the stage is being set for an epic financial showdown between them and Gen Z to determine which will become the richest generation of the future.

The Silent Generation and baby boomers stand poised to transfer control of their vast wealth, estimated around $90 trillion, to their millennial children over the next 20 years, according to research from global real estate advisor Knight Frank. However, experts warn this seismic shift may further exacerbate wealth inequality, as those who stand to benefit most already hail from affluent households.

Wealth Transfer Favoring Firstborns

According to financial experts, inheritance consisting largely of property and assets is driving the millennial wealth boom. However, Knight Frank’s research reveals birth order will significantly impact which millennials strike it rich.

“The low-interest rate environment and impressive house price growth over the past 15 years is unlikely to be repeated in the next 15,” said Mike Pickett, director at Cazenove Capital, in Knight Frank’s report.

Gen Z vs Millennials: The Race to Become the Richest Generation
Gen Z vs Millennials: The Race to Become the Richest Generation, image by canva

This suggests while well-off firstborns are poised to inherit the spoils, their later-born, less affluent peers may struggle to replicate such wealth accumulation.

Knight Frank’s research also revealed the number of ultra-high-net-worth individuals, defined as those with over $30 million in net worth, rose by 4.3% globally in 2023. This growth was largely driven by a 7.2% annual increase in North America and a 6.2% rise in the Middle East.

Meanwhile, Latin America was the only region to experience a 3.6% decline in its ultra-wealthy population year-over-year. This trend defies global projections of a worldwide economic downturn, signaling the wealth gap separating rich and poor continues expanding rapidly.

Gen Z Enters the Arena

While many millennials feel increasingly financially pinched, Gen Z youth just now entering their prime earning years have different perspectives on wealth. According to Knight Frank’s report, wealthy Gen Zers are less convinced real estate or property is the road to riches compared to previous generations.

“Gen Z is more focused on social justice issues and experiences rather than accumulation of assets,” explained financial planner Ryan Cole of Citrine Capital. “They’ve also grown up in a world filled with economic chaos, so they’re wary when it comes to traditional wealth planning strategies.”

With Gen Z skeptics poised to challenge conventional wisdom, the outcome in the race to become the richest generation of the future remains wide open. However, with over $90 trillion of wealth transferring between generations over the next 20 years, everyone stands to win or lose big.

Inherited Wealth and the Widening Divide

While the seismic generational wealth transfer holds promise, some experts warn it may further divide have and have-not youth.

“The majority of heirs do not create their wealth, but inherit it,” said wealth advisor Sam Hutchins. “This amplifies the wealth gap, especially when paired with socioeconomic inequalities that make entrepreneurship inaccessible for many.”

Without inheriting affluent parents’ property assets, many youths increasingly feel priced out of home ownership and other pillars of wealth creation. And with younger generations divided about how best to accumulate wealth, the race towards becoming the richest youth currently favors those born into privilege.

Yet with Gen Z questioning old assumptions and bringing fresh perspectives, the outcome remains uncertain. Over the next 20 years, youth mindsets and policy changes may still help make prosperity possible for all.

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