The Largest Wealth Transfer Ever is Happening Right now
& how it will affect every single american.
Good morning everyone
You may have seen this headline popping up everywhere, but the greatest wealth transfer in history is indeed starting to happen, and it will be felt by almost every American.
Did you know that the baby boomer generation has almost a third of the entire wealth of the country?
$68 trillion will be dispersed to almost 50 million households within the next 25 years. The baby boomers own 43% of all the real estate in the U.S. and 54.6% of corporate equities (stocks & bonds). Generation x will give the majority of the assets at around 57%.
Baby boomers make up 1/5 of the population, and millennials make up another 1/5. The key difference here is that when the baby boomers were the age of the millennials, they controlled 21.4% of the population’s wealth. While today the millennials only own about 4.6%.
This is because millennials faced the worst financial crisis in 2008, which created the worst job outlook of all time. Not to mention how the fed printing money caused a real problem in affordable housing. As well as climbing student debt that has increased 1,200% compared to inflation, only rising 236% in the same period.
This is a lot of money that will be transferred between generations. Where each generation sits financially is also very different. I’m not going to bog you down with any more statistics on this topic. But know that the baby boomers own almost more assets than in comparison to every other generation. However, the millennials are leading in one category: consumer debt. ( things like auto loans, student debt, and credit card balances.)
The main reason that the baby boomers own more wealth than the rest of us is that they simply have been around longer. As a result, they’ve had more time to pay off their debt and let compound interest do its magic.
What does this mean for everyone else?
The younger generations will obviously be receiving an influx of cash over the next 25 years. Still, I wanted to use these examples to explain why today’s kids are buying NFTs and cryptocurrencies. It is inherently in their nature to take more risks at an earlier age to try and catch up to the rest of the people who own the majority of the wealth.
By 2030 millennials are set to increase their net worth by up to 5x.
The real inheritors of this wealth will actually still be the rich (go figure)
The least wealthy are set to inherit approximately $6,100 on average
The top 1% will inherit somewhere around $2.7 million on average.
Another shocking statistic is that 70% of families will lose that wealth by the second generation, and 90% will be worse than when they started by the third. This goes to show that most people who are given money are often not better for it. It takes a real understanding of how to actually build wealth yourself in order to keep it.
Most people who will inherit a large sum of money have no fundamental understanding of how they got it. So they use it to buy a new car and pay down their debt, and before you know it, they are out of money. That is why it is crucially important to educate yourself so you don’t wind up down the same rabbit hole.
Thank you for reading today’s post. I hope everyone can see the significance of this wealth transfer as it will most likely affect you in some way, shape, or form. This post is free, so it would be greatly appreciated if you shared it with a friend. Have a great day, and remember to live in the moment.