The Largest Transfer of Wealth in History

Baby boomers, who have accrued significant wealth through various means, including property, stock market investments, and savings, are expected to pass along a significant portion of this wealth to their millennial heirs. This process is already underway and expected to accelerate over the next few decades.

Some key points of consideration:

1. The scale of Wealth Transfer: A report by Cerulli Associates predicts that nearly $84 trillion will change hands from older to younger generations over the next 25 years. This would be the largest wealth transfer in history.
2. Uneven Distribution: This wealth transfer will be unevenly distributed. Much of the boomer wealth is concentrated among a relatively small number of high-net-worth individuals. Therefore, a significant portion of that wealth will be transferred to a relatively small number of millennial heirs.
3. Impact on Inequality: While some millennials will undoubtedly benefit from this wealth transfer, it may also exacerbate wealth inequality. Millennials who do not have wealthy parents or grandparents will largely be left out of this wealth transfer.
4. Potential for Lost Wealth: There is also concern that a substantial portion of this wealth could be lost during the transfer process due to taxes, poor investment decisions, and a lack of financial literacy among some heirs.
5. A shift in Financial Services: This wealth transfer is forcing changes in the financial services industry. Many wealth management firms are adjusting their strategies to better serve millennial clients who stand to inherit this wealth. These adjustments include incorporating technology, emphasizing social responsibility in investment strategies, and providing more education and guidance.
6. Millennials and Homeownership: "According to a piece by Nigel Wilson on Forbes in 2019, there is a widening gap between the dream and reality of Homeownership for millennials in the U.S. The aspiration for Homeownership among this generation is still very much alive, yet the chances of realizing this dream are diminishing due to rising property prices, economic instability, and increasing student debt. However, recent data suggests an improving situation. Millennial homeownership rate is growing, but still below other generations. The latest surveys have millennial homeownership at 47.9%2. At age 30, 42% of millennials own homes. Despite the promising numbers, 52.1% of millennials still do not own their own homes. Millennials are not buying homes as readily as the previous generation due to delaying marriage and having children, and the burden of student debt.

Data: House Grail | Bloomberg | Forbes

The impact of this wealth transfer will continue to unfold and may shift as economic, social, and global conditions evolve.

This article was inspired by conversation with many older business owners (baby boomers) who are in the process of transferring their businesses to a younger (very different) generation. Often times, these conversations include a discussion on which generations align with the various age groups.

Here's a little help from ChatGPT. Enjoy! https://chat.openai.com/share/0bdc63a0-fcad-410b-924f-3e9887bf6647

• The Lost Generation (1883–1900): Also known as the Generation of 1914 in Europe, this generation came of age during World War I. Famous members include Ernest Hemingway and Gertrude Stein.
• The Greatest Generation (1901–1927): This generation experienced the Great Depression in their youth and later fought in World War II. Tom Brokaw popularized the term, crediting this generation with much of America's success in the 20th century.
• The Silent Generation (1928–1945): The Silent Generation experienced their formative years during major shifts in social norms resulting from World War II. They are sometimes referred to as "silent" because they were generally not the ones leading social and political change.
• Baby Boomers (1946–1964): This generation was born during the post–World War II baby boom. They are associated with redefining traditional values and are often seen as making a significant impact on national politics, institutions, and culture.
• Generation X (1965–1980): Born after the Western Post–World War II baby boom, this generation is often characterized by high levels of skepticism, "what's in it for me" attitudes and a reputation for some of the worst music of all time. They were sometimes called the "MTV generation."
• Millennials or Generation Y (1981–1996): Millennials grew up during a time of technological change, globalization, and economic disruption. They are often seen as being more comfortable with digital technology, having a greater tolerance for diversity and a different take on work-life balance than the previous generations.
• Generation Z (1997–2012): Gen Z is the most ethnically-diverse and largest generation in American history. They are characterized by their digital nativity, having been exposed to the internet, to social networks, and to mobile systems from an early age.
• Generation Alpha (2013–2025): This is the first generation to be born entirely within the 21st century. They are also known as the iGeneration, as their formative years are happening when iPads and iPhones are widespread. They are expected to be the most technologically literate generation to date.

Note - the years defining the start and end of generations can vary slightly depending on the source. Also, the characteristics typically associated with each generation are generalized and may not apply to all individuals within that generation.

Please tell me what you think. Did ChatGBT get the generations right?