Currently, many millennials are struggling to achieve traditional American Dreams like homeownership, stable employment, and a reasonable cost of living. Yet, in the coming two decades, millennials are set to inherit around $90 trillion in assets, positioning them to be the wealthiest generation in history, with this wealth primarily accruing to those from already wealthy backgrounds, likely exacerbating wealth inequality.
The Wealth Report, published by global property consultancy Knight Frank, predicts that from now until 2044, significant wealth from the Silent Generation and Baby Boomers in the US will be transferred to millennials.
However, whether a millennial will benefit from this wealth transfer largely depends on their family background.
This impending wealth transfer, primarily through inheritance, including properties and other assets, is expected to significantly alter the utilization of wealth, according to Liam Bailey, Knight Frank’s global head of research.
The report also indicates that wealthy younger individuals are increasingly skeptical about using property or real estate as a wealth-building tool in the future.
Mike Pickett, a director at Cazenove Capital, noted in the report that the low interest rates and substantial growth in housing prices seen over the last 15 years might not continue over the next 15 years. He mentioned that Generation Z might prefer renting homes, leasing vehicles, and embracing a subscription-based lifestyle more than previous generations.
Pickett emphasized that the upcoming wealth transfer will coincide with new avenues for wealth generation.
People got richer in 2023
The report also highlights that 2023 saw an increase in the number of very wealthy individuals, reversing the decline from the previous year.
According to the report, the number of ultra-high-net-worth individuals, those with a net worth of $30 million or more, increased by 4.3% in 2023 to 626,619 people worldwide.
North America experienced the most significant growth in its ultra-wealthy population, with a 7.2% increase from the previous year, followed by the Middle East and Africa, with 6.2% and 3.8% increases, respectively. In contrast, Latin America was the only region where the number of ultra-wealthy individuals fell, decreasing by 3.6% from the previous year.
