Interestingly, after a steeper catchup period, they both now track at the same slope as before.
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The staggering millennial wealth deficit, in one chart
- Thread starter WedgeX
- Start date
It's just odd that the Gen X'rs seem singled out here, because the equivalent point in time for Boomers is still a steady rise. Not even a small dip.
This. It's going to their kids and they are going to continue the concentration of wealth and power even if they are idiots.
The only thing millennials will inherit from boomers is their massive debt.
And if we further dissected who holds the wealth to things like race and income level, I think we'll further see that "trickle down inheritance" won't be a thing for like 99% of young folks out there.
And if we further dissected who holds the wealth to things like race and income level, I think we'll further see that "trickle down inheritance" won't be a thing for like 99% of young folks out there.
I don't expect to receive much via inheritance. It will likely be a few hundred thousand dollars at most. So like any intelligent millennial I am frugal to the bone. I don't spend any money unless I absolutely need to. All of my hobbies or fun activities are paid for by other people via gifts because I'm too cheap to spend any money on myself.
And as a result I am genuinely grateful when I receive a gift. I've more or less evolved into the opposite of the boomer stereotype.
And as a result I am genuinely grateful when I receive a gift. I've more or less evolved into the opposite of the boomer stereotype.
Inheritance taxes reinvested into infrastructure, health care, education and social services would go a long way as the divide between Millenials and GenX isnt so great, so a lot of capital will be freed up when the Boomers pass on But as the US seems hostile to taxation, my guess is that the money will either be passed on via wills to a select few or, more likely, bled out of the Boomers by various services (I.e. health and wellness care) until there is little left to pass on.
We are probably going to see the same thing in Canada as well, and possibly worse as Boomers account for a large proportion of our population. Hopefully at the close, Boomers will prove themselves less selfish than their lives to date have indicated and they will invest in a sustainable legacy rather than squander it on longevity and vanity.
We are probably going to see the same thing in Canada as well, and possibly worse as Boomers account for a large proportion of our population. Hopefully at the close, Boomers will prove themselves less selfish than their lives to date have indicated and they will invest in a sustainable legacy rather than squander it on longevity and vanity.
Definitely an interesting difference. I'm going to guess it related to factors like longer-established investments, and more importantly not being at the bottom/middle of the totem pole in work, which will be cut first in tough times.
the dip for the boomers is that longish slight downturn shortly after the 55 median age range. Probably like 2009-2013 or so. Recession didn't hit them as hard because they had more equity in their mortgages and more seniority in their jobs.They also would have been less likely to have taken on any subprime loans/mortgages than the gen-x folks.
Baby Boomers to Millennials is everyone born from the 40s onwards right?
I would have thought that encapsulated nearly everyone in the US, but the 2019 percentages don't seem to even nearly add up to 100%. Am I reading it right? Where is the rest of the wealth?
I would have thought that encapsulated nearly everyone in the US, but the 2019 percentages don't seem to even nearly add up to 100%. Am I reading it right? Where is the rest of the wealth?
there are still a lot of of silent generation folks chilling. Generally born up until 45 is considered silent gen.
also I suppose some gen z folks account for a bit of it.
There's still a decent amount of silent generation folks. Bernie and Biden are both from that generation.
OP
OP
Shockingly, the Fed data shows that Silent and above still controls ~20% of the wealth in the US.
These young people often come up and tell me how they have it hard....Give me a break, i have no empathy!
easier to weather economic hard times when you already have a significant pad of capital, which people build up over time and boomers as a cohort likely had much more of than gen Xers at that time and at that time in their lives
Makes sense. A quick google shows 25m-ish Silent Generation as of 2017.
Yep a lot of gen x'ers at that point had just recently bought houses with, "ambitious" mortgage rates during the post 9/11 boom. Late 30s especially then were young families I'd assume also which is a notoriously expensive time in anyone's life. Just a confluence of a bunch of factors (and culprits, notice I'm not even mentioning the criminal financial industry practices of the time).
Thanks for this genuine laugh in an otherwise wholly depressing thread.
Inheriting real estate (that boomer parents got for really cheap in the 80's-early 00's) is like the biggest wealth transfer engine among generations so I don't get this reply tbh
The most common trend right now are elderly people selling off their wealth in order to find themselves in assisted living situations. That's not free and it's almost solely paid for by the profits of downsizing. The idea that children are going to inherit property comes with the mindset that the elderly are dying in their homes which isn't the case.
In a lot of cases, mine included, the property we grew up in will be sold and half the proceeds will be gone, the remainder of which may, emphasis on may, help us get out of the debt that we've been under for 20-30 years, a situation leaving people receiving their inheritance with no credit and wealth, and while they have no debt, their situation is the same as it ever was, needing to work forever until they die.
The lucky ones get a small windfall from the proceeds or...as ghoulish as it sounds, do profit because their parents died in their homes with no further ambitions on what to do after retirement.
But most people are fucked.
And that's ignoring property that was bought cheap and never renovated, property that needs more work than is worth, property where the land is literally more valuable than the actual home on top of it...
The fact that your parents will die and give you their leftovers does not automatically put you at an advantage.
I knew the wealth gap was bad when compared to the richest but I undervalued how much the middle class generation that is dying off had it that good because even they were forced to have their spouse work so it threw off my mental calculations.
It's sad with all that wealth they do have they are still at risk of getting wrecked by hospital bills.
Their relative advantages need to be communicated better to them.
If they don't do anything to help their grandchildren I genuinely expect now there will be a rebellion of sorts against the 1%.
The disparity is too large to maintain for the next twi generations.
It's sad with all that wealth they do have they are still at risk of getting wrecked by hospital bills.
Their relative advantages need to be communicated better to them.
If they don't do anything to help their grandchildren I genuinely expect now there will be a rebellion of sorts against the 1%.
The disparity is too large to maintain for the next twi generations.
I mean, that's relative.
Where I live, you literally cannot buy a house for less than 300k. A couple hundred thousand could still not be enough to exit your current life situation. For a lot of people, it will bring to a financial place of where they should have been at 35, while they are in their 50's.
And if you're just getting the money, then the wealth aspect of all this is still out the window. You have cash to spend but no equity.
It would be life changing if I received that much now because it would allow me to get out of debt. But when I'm over 55 and approaching the end of my economic usefulness I'll need to save every penny to not end up in poverty before I die.
When I think of inheritance, I think of how much money I'd have to put into my parents' house before I could sell it.
The only reason I could afford a house was because my boomer uncle died and left me quite a sum of money. It's the only way us millennials can afford a house - by having a relative die.
They are not date aligned, they are age aligned. There is a dip for boomers, top right. It's just smaller. This chart is just weird.
THIIISSSS
You would be honestly privileged to get anything from the generation above you. If they have enough to leave you when they die them and you probably did fine for yourself.
My GF's grandma was left a solid amount of money after her husband died. She basically didn't have to work after. But she would spend it on stupid shit because she had that boomer mentality that having nice things matters and if it costs more it must be better. So she would spend like 3 grand on a couch set, built a pool she barely swam in because she liked the way it looked, always wanted to buy the newest and fanciest model of everything.
She has dementia and her health is deteriorating. Her house is on a reverse mortage. Taking care of her has drained all her money. We were told in order to be eligible for medicare she needs to basically spend ALL her money away. Makes sense, but it also means after her end of life care she gets to transfer didly squat.
It's all going to be spent on retirement homes and end of life care.
I think it makes a huge difference if you were able to start a career before the recession or not. My high school friend group spanned the gap (graduating between 2006 and 2012 mainly) and the ones that graduated before the recession are hugely more likely to have stable careers and own property.
A lot of it is, but then more of it gets handed down to their children, but it's not enough for them to actually do anything big like buying anything of major personal equity or retirement investments, so the cash gets spent on things like rent, or payments, things to get people out of debt. That money falls into the hands of other private owners and vendors. It won't be enough for people to stop working at what we consider to be retirement age, the jobs for elderly people won't exist due to automation and younger people demanding jobs, and the wealth deficit shrinks by almost a half AGAIN.
Maybe you win the powerball.
Maybe you move to Idaho.
People will make it work, we always do.But it means living the way you've always lived, working the way you've always worked, with no rest or respite. Forever and ever, amen.
Also even if the property wealth were to just straight transfer, it's going to be coming at a much later point in millennials' lives, which means it will have less time to compound, which is one of the major points of this article.
Shit that's depressing. I'm from the north but I lived in the deep south and Texas for a decade after Katrina. I know loads of people in their 30s in Mississippi, New Orleans, and East Texas who are able to afford a house. Know someone in Wilmington who bought a 3 br for 91,000. Where in the south are you?
Yup. Honestly, using the 300k example from earlier, that is a wonderful down payment for something meaningful for a family of 4 in your late 20's, early 30's. Getting it at 50 is just too late.
My grandmother passed away in September. She was in the nursing home for two months. It cost ~24K. If she had lived another year, her retirement accounts would have been completely drained.
Those thinking wealth will transfer in its entirety are fooling themselves. A lot of it will burn, quickly.
Those thinking wealth will transfer in its entirety are fooling themselves. A lot of it will burn, quickly.
Nah they're sending it to their sponsored child in Russia, I think his name was lil' Vladimir Putin. ;)
Until this thread I didn't realize that there is a significant proportion of millenials who are flat out jealous of and bitter against boomers.
Full disclosure: I was born in 81 and can flip or flop depending on whose definition one uses between Gen X and Millenial.
Full disclosure: I was born in 81 and can flip or flop depending on whose definition one uses between Gen X and Millenial.
Reverse mortgages are eating inherentences as well as increasingly expensive healthcare for everyone especially the aging.
So basically, wealth concentration might actually spike as these people die off over the next 20 years.
This still doesn't make sense to me. If you're 50, you may already have a mortgage on a $300,000 home. You could now pay off that home entirely and have extra to pay off other debts or to put into retirement. In what world is $300,000 at age 50 "too late" to be significant?
There are some logical historical reasons for why its so skewed. Coming-of-age boomers, born after World War II, inherited the strongest growing economy in the history of economic tracking: The American post-war economy, recovering from the Great Depression. The boomer's parents, the so-called "Greatest Generation," had a disproportionately tiny share of wealth because they came of age in the intrabellum period between World War 1 and 2, in the midst of the largest macro economic collapse in generations.
Aside from that, though, "boomer wealth" accelerated so quickly because of massive housing construction and housing affordability, and a tremendous percentage of wealth is in real estate, which has appreciated in value but building new housing has not kept pace with new housing following World War II. For those of us whose parents are boomers (my folks, born in 1950 are the quintessential baby boomers by age, I'm the quintessential millennial born in the mid-80s), they bought real estate in the 1970s and 80s, prior to the widespread real estate valuation explosion in the 90s, 2000s, and now today, while building (and some other negatives, like interest rates, which were ridiculous ... 10, 12, 15% in the 1980s on 30-year-loans) have not commensurately kept pace. The collapse of interest rates has depreciated savings while accelerating lending, leading to cheap credit, but more debt, and explosions in the sticker price of things like higher education (though, also, far more millennials are highly educated than their parents, though that has also brought a depreciation in value of higher education), leading to more debt and less savings.
The affect of World War II and the remaking of the new world order following the war is staggering.
On a side note, I think I like the name "Echo Boomers" for Millennials more than "Millennials," it's more accurately evocative without the (undeserved) baggage. The reason there are relatively more millennials than gen x is because we're literally the 'echo' of the Baby Boom -- the children of baby boomers.
Aside from that, though, "boomer wealth" accelerated so quickly because of massive housing construction and housing affordability, and a tremendous percentage of wealth is in real estate, which has appreciated in value but building new housing has not kept pace with new housing following World War II. For those of us whose parents are boomers (my folks, born in 1950 are the quintessential baby boomers by age, I'm the quintessential millennial born in the mid-80s), they bought real estate in the 1970s and 80s, prior to the widespread real estate valuation explosion in the 90s, 2000s, and now today, while building (and some other negatives, like interest rates, which were ridiculous ... 10, 12, 15% in the 1980s on 30-year-loans) have not commensurately kept pace. The collapse of interest rates has depreciated savings while accelerating lending, leading to cheap credit, but more debt, and explosions in the sticker price of things like higher education (though, also, far more millennials are highly educated than their parents, though that has also brought a depreciation in value of higher education), leading to more debt and less savings.
The affect of World War II and the remaking of the new world order following the war is staggering.
On a side note, I think I like the name "Echo Boomers" for Millennials more than "Millennials," it's more accurately evocative without the (undeserved) baggage. The reason there are relatively more millennials than gen x is because we're literally the 'echo' of the Baby Boom -- the children of baby boomers.