Millennials are on the cusp of an unprecedented shift in wealth. Globally, it is estimated that millennials will receive a staggering $60 trillion in inheritance over the next seven years from baby boomers. This massive influx of money is being referred to as the millennial wealth transfer and could have a significant impact on the future of the global economy.
Impending inheritance
Thanks to the assets left to them by their boomer parents, a significant number of millennials will become independently wealthy overnight. The event that will go down in history as the most significant transfer of wealth is right around the corner. By the year 2030, Millennials will have amassed wealth that is five times greater than what it is today.
It is projected that millennials will receive an inheritance worth more than $60 trillion worldwide over the course of the next seven years. We, the millennial generation, are currently worth only a fraction of what the average baby boomer, people born during the 1950s or 1960s, is worth right now.
Why is this happening?
The transfer of wealth from baby boomers to millennials is due to several factors. Many baby boomers have accumulated significant wealth over their lifetimes, primarily through property ownership and investment portfolios.
Another reason why this transfer is happening is due to changing family dynamics. In the past, inheritance was typically passed down to the oldest son. However, today, families are more egalitarian, and wealth is often split equally among siblings. As a result, millennials will likely receive more significant inheritances than their parents did.
Millennials will need financial literacy
This massive wealth transfer will be a nice payday for millennials, especially considering that many of us have gotten off to a very rocky start economically. And while millennials, like most people, don’t want to live in a world without their parents, there could be a sense of relief that comes with long-sought financial stability.
So, the economy is set to improve for millennials. Still, there is unquestionably going to be some degree of sadness associated with closing the wealth gap between millennials and boomers.
This impending millennial wealth transfer results from demographic changes and shifting family dynamics. As baby boomers age and start to pass on their wealth, millennials are poised to inherit a substantial amount of money and assets. It is up to them to manage these resources wisely and use them to secure their financial future. As such, financial literacy will become a crucial skill for younger generations to develop, if they haven’t already.
BDubya
May 4, 2023 at 9:03 am
Unfortunately for the millennials, the efforts of their parents to acquire wealth which will be passed on to their offspring were neither appreciated nor understood by the potential beneficiaries of the transfer.
This wealth will, over time, be transferred right back to other individuals, and the descendants of the millennials will be poor, just like the 2nd and 3rd generations of new money that was gathered during the “La Belle Epoch” at the end of the 19th century.
All you need do is look at the fortunes of families like the Astors and the Vanderbilts to understand how rapid that shedding of wealth will be.