The Younger Generations and Real Estate
DJ Van Keuren
Family Office RE Executive I Co-Managing Member Evergreen | Founder Family Office Real Estate Institute | President Harvard Real Estate Alumni Organization | Advisor Keiretsu Family Office
So Prof Glenn Mueller (Professor at the University of Denver and Academic Director for the Family Office Real Estate Institute) recently shared this with me and immediately it made me think about the future of real estate and younger generations.
For years, I continued to say that real estate is the second largest area of wealth creation after the industry where the family created their wealth. Real estate produces massive amounts of wealth and can be a crucial component of maintaining the wealth for future generations. With that being said, why is real estate one of the largest areas of wealth creation for the "silent generation" (the oldest generation that is alive right now) and not in the top 5 sectors for the other generations? My guess is that real estate is too dull, not enough action, and grows over time. With the rise of technology, so is the lack of patience in the younger generation who want everything now. Patience is vital for wealth creation, and for those who can be patient, the odds of becoming a billionaire are so much greater than many of the other options out there today. So let's take a look at the world's billionaires by generations as discussed in businessfinancing.co.uk.?
The World’s Billionaires, by Generation
What similarities do the world’s billionaires share? What are their differences?
At the age of 12, Elon Musk built his first video game. Similarly, Mark Zuckerberg shared an interest in computer programming, building a simple messaging platform at the same age. The co-founder of Oracle, Larry Ellison, developed programming skills at college. All three span different generations and made their fortunes in tech.
In an infographic from BusinessFinancing.co.uk, some characteristics were expored of billionaires across generations, including their average net worth, top sectors, number of children, and most common city of residence.
The World’s Billionaires, by Generation
Using data from Forbes here is how each generation of the world’s billionaires break down.
Silent Generation
1.????Born: 1928-1945
2.????Average Net Worth: $5.5 billion
3.????Most Popular Residence: New York, U.S.
Silent Generation billionaires are the wealthiest on average across generations. With CEO of Berkshire Hathaway Warren Buffett and Zara founder Amancio Ortega among its ranks, Silent Generation billionaires are most likely to be in finance, fashion, and real estate industries.
Here are the Top 5 Sectors and their Percentages
1 Finance & Investments 15.5%
2 Fashion & Retail 12.4%
3 Real Estate 9.8%
4 Food & Beverage 9.0%
5 Manufacturing 9.0%
Media mogul Rupert Murdoch, who owns The Wall Street Journal, Fox News, and The New York Post, is also part of this group. He has a net worth of $13 billion.
Baby Boomer
1.????Born: 1946-1964
2.????Average Net Worth: $4.6 billion
3.????Most Popular Residence: New York, U.S.
Like the Silent Generation, billionaire Boomers are most likely to be in finance. Stephen Schwarzman, founder of private equity firm Blackstone Group, R. Budi Hartono, the richest person in Indonesia, and Ray Dalio, head of Bridgewater Associates, all fall into this generation.
Boomer billionaires are much less likely to be in the tech industry, though Jeff Bezos and Bill Gates have amassed their fortunes in this area.
Here are the Top 5 Sectors and their Percentages
1 Finance & Investment 14.2%
2 Manufacturing 12.9%
3 Fashion & Retail 10.6%
4 Technology 8.7%
5 Healthcare 8.5%
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With a net worth of $150 billion, LVMH chair Bernard Arnault is the second richest person in the world. Francoise Bettencourt-Meyers, vice-chairwoman of L’Oreal, ranks 12th. Both fashion conglomerates are based in France and helmed by billionaire Boomers.
Generation X
1.????Born: 1965-1980
2.????Average Net Worth: $4.4 billion
3.????Most popular Residence: Beijing, China
The world’s billionaires in Gen X are not only predominantly in tech, but are most likely to live in Beijing, China. Ma Huateng, founder of social media conglomerate Tencent Holdings, created instant messaging platform QQ in his early 20s. Colin Huang built one of China’s largest e-commerce platforms, Pinduoduo, in 2015.
Here are the Top 5 Sectors and their Percentages
1 Technology 24.2%
2 Manufacturing 13.4%
3 Finance & Investments 11.6%
4 Healthcare 8.0%
5 Fashion & Retail 7.6%
Gen X billionaires also include Elon Musk and Google co-founder Larry Page.
Millennials
1.????Born: 1981-1996
2.????Average Net Worth: $5.1 billion
3.????Most Popular Residence: San Francisco, U.S.
With the second-highest average net worth after the Silent Generation, millennial billionaires are seen predominantly in tech and finance. Roughly 100 billionaires worldwide fall into this category overall.
Mark Zuckerberg is the only millennial billionaire among the top 10 richest globally.
Here are the Top 5 Sectors and their Percentages
1 Technology 31.0%
2 Finance & Investments 12.9%
3 Fashion & Retail 8.6%
4 Media & Entertainment 8.6%
5 Automotive 6.9%
Brian Chesky (co-founder of Airbnb), Bobby Murphy and Evan Spiegel (co-founders of Snapchat), and Swiss billionaire Guillaume Pousaz are all part of this billionaire cohort.
Generational Trends
What other trends are seen across the world’s billionaires? ?
Millennial billionaires are the most likely to be women, with roughly double the rate of all other generations at 19%. Notable billionaire women include Anna Kasprzak, who co-owns Danish shoe company ECCO and Brazil’s Anne-Marie Werninghaus.
Self-made billionaires are most likely to be Gen X. Over 80% of billionaires are in this category, including Google co-founder Sergey Brin and Mu Rongjun, co-founder of Meituan, a company similar to Yelp. At the same time, the most billionaires living outside of the U.S. (81%) were born in this generation.
Billionaire Boomers are most likely to be married. The Silent Generation, meanwhile, are most likely to be U.S. citizens, with hedge fund manager George Soros and the world’s oldest billionaire, George Joseph (100) who founded insurance firm Mercury General, in this set.
Notable exceptions include Robert Kuok (98), the richest person in Malaysia, and Masatoshi Ito (97), chair of Japan’s largest retailer.
Realtor at Align Right Realty - Homekey
2 年Great info! My question is: will Gen X'ers and Millennials change when they get older? According to the US Census Bureau the American population will grow from 330 to about 400 million people over the next 50 years. All these people need a place to live, so the long-term prospects for Real Estate are very good.
Client Relations, Luxury Hospitality and Business Development Professional
3 年Great piece! Too dull, not enough action, feels accurate sadly. However, it is my belief that one major innovation happening today that will help address some of these concerns will be tokenization of traditional real estate coupled with the emergence of blockchain technology. This innovation brings fresh and exciting new ways of RE investing for younger generations and Family Offices. Through tokenization, for the first time ever, we gain the ability to buy-sell-trade or hold digital tokens pegged to real properties, that perform just like stocks of a publicly traded company. How cool is that?! This creates a whole new asset class for Family office/real estate investors and promotes safer, less risky ways of investing in this growing digital economy. My expectation is that the younger generations will eat this up and want access to this fun, exciting experience of collecting property shares like a game of monopoly, and many will participate in future.
Serial Entrepreneur | Company Owner | Acquisitions | 3X Exited | 5X RegD GP | Global Trade & Ambassador
3 年Great newsletter. I think you hit the nail on the head when you said real estate takes time and younger generations are not patient. We live in an on demand world and investing is no exception. The goal is to build wealth with certainty which real estate can provide.
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3 年Wow! Thought provoking article. As a real estate marketing expert myself, I think the 21st century youth is missing something. We need to go back to our "classrooms" to think outside the box to know that the world has evidently evolved.
Co-President -Chief Investment Officer
3 年Fascinating! 20 years into real estate! So focused on beating the odds! However, would love to get into prop tech too!