Will millennials be the richest generation yet?

Millennials are generally considered to have pulled the financial short straw compared to Boomers.

Will millennials be the richest generation yet?
Source: Pexels/Leah Newhouse

Millennials, people born between 1981 and 1996, are generally considered to have pulled the financial short straw compared to boomers (and even Gen X). Many are facing a mountain of student debt. They've often been labeled a lazy and financially irresponsible generation, even though they're "a sandwich generation" paying for grown children and also aging parents. Plus, we can't forget the impact of the pandemic on the job market, inflation and skyrocketing prices in the property market. All of this has made it difficult for younger generations to hit important milestones, like saving for retirement or owning a home, which previous generations could do at a younger age. 

But, according to a wealth report from global real estate consultancy Knight Frank, millennials will likely become "the richest generation in history" over the next decade. In the US alone, millennials are set to inherit US$90 trillion, with Knight Frank saying there'll be a "seismic" transfer of wealth assets from older generations. 

One obstacle that millennials are currently facing is getting on the property ladder. Economist Ben Ansell analyzed a 2022 England-wide survey on fairness and social mobility and found that less than a third of under-30s felt they had a fair chance at buying a house. Whereas just under two-thirds of over-70s thought they had this chance. 

"The old think they did it on their own (or at least that others should)," Ansell writes. "The young think success is outside their control." Nowadays, nearly half of young adults still live with their parents, but an inheritance could give millennials and Gen Z the chance to achieve milestones that have seemed out of reach.

The way this wealth is spent (outside of buying a property) is also projected to shift from how older generations have invested their money. For example, younger generations are more conscious of climate change. 

"Millennials appear to have got the message when it comes to cutting consumption – 80% of male and 79% of female respondents say they are trying to shrink their carbon footprints," said Liam Bailey, global head of research at Knight Frank. 

A study by Ellevest, an investment and wealth management company, also says that by 2030, "American women will manage at least US$30 trillion, more than the national GDP."

Ellevest researchers believe this shift in wealth will help close the gender wealth gap and finally even the playing field between men and women. But, the gender wealth gap accounts for more than just a wage difference. There are also factors like childcare, time out of the workforce during the pandemic, less investing, the pink tax (premium pricing on women's products) and systemic inequalities.

The survey also said that women are likely to invest in other women, hire other women and pay women high salaries, as well as donate and invest in philanthropic causes, more often than men. So all this data suggests that we can expect a huge shift in what our world looks like economically over the next decade.

"A world where women control more wealth could look very different," researchers said.