The Great Wealth Transfer
?When we talk about wealth these days it seems to be fleeting. Escaping the middle class. Some call it a wealth gap.? While younger generations – Millennials and Gen Z – are struggling to find their financial footing, Baby Boomers are the wealthiest generation on the planet. Not to be morbid, but what is going to happen to all that scrill when they die?? Thinking back to last week , maybe these are the folks out there spending like there’s no tomorrow and keeping inflation high.? They may not have coined the phrase YOLO (you only live once) but that does not mean they aren’t living by it.???
I don’t know if we can truly blame the Boomers for inflation. I do know when we say they are loaded, it’s not a small amount we are talking about. It’s half of our country’s household wealth. You don’t live forever; all generations can agree on that. As this generation passes, they are expected to leave a lot of money to their millennial children. Estimates suggest a transfer of $68 trillion.?
Things are looking up for Millennials!?
It’s been a wild ride for these guys, quite different from the periods of tremendous economic growth and extended periods of prosperity their parents experienced.? Millennials have lived through the Great Recession, the pandemic and the current inflation/affordability crisis while having stagnant wages. But, as they say goodbye to their parents – their net worth is expected to not triple, not quadruple but quintuple by 2030.??
Which will help them pay off student loans, buy homes and invest in real estate, maybe even afford healthcare. Start businesses. Vacation (even more). And when they do all those things, it creates major waves in the economy. The ripples of those waves impact so many sectors from furniture stores to hotels. Boomers and Millennials spend money in different ways so markets would change.?
Plus, if it is a transfer from the wealthiest of boomers to the somewhat already well-off Millennials, will this movement of money only serve to exacerbate the wealth gap??
What about the Zoomers??
The boomers will be known as the loaded generation, they enjoyed the prosperity that followed war. Millennials are likely to be defined by either the financial crisis of 2007-2009 or how they came out of the pandemic (it’s a tossup on which period was funner for us.)???
Then there is the next generation. We’ve worried about this group. Zoomers are Gen Z and there are about 2 billion of them born between 1997 and 2012.)? The concern has been not just about their work ethic, but their mental health. Their formative years were spent on social media. Plus, the pressure is on. Think about the rapid progress of technology during Millennial’s lives. How could Gen Z top that???
Well the research shows they are advancing their careers faster, they are quicker to ask for raises or find better opportunities.?
Today’s point…?
While everyone is focused on inflation and the affordability crisis, we also know there is a lot of money that is moving around. Even before the boomers meet their expiration, many are deciding they want to watch their children and grandchildren enjoy the money. So as these gifts and inheritances materialize, demand for all goods is likely to increase – especially when it comes to real estate.?? Will it be a specific type of real estate? Maybe starter homes in walkable neighborhoods or properties like condos that are low maintenance and allow for flexible lifestyles.??
领英推荐
Eventually the money will filter down to the Zoomers. Will they even prioritize homeownership? Or will they take their nest eggs and invest in other sectors???
For those of us considering our investment strategies, it’s worth considering what the next 10 to 20 years will look like based on spending habits. For those of us considering our careers, it is imperative to be forward thinking about how our consumer will evolve.? And how we should, in preparation rather than response.??
For those of you looking to time your first home purchase or dream home move up, your first rental property or vacation home – return on investment is something to keep in the back of your mind. Real estate is a long game, it’s a personal game, it’s a financial game (real life monopoly) and sometimes zooming out is more helpful than getting hyper focused on whatever today’s challenge is. That was my goal today.?
LEARN MORE?
Instagram:?
Mind over Markets:
My Website:?