New Report Says Millennials Are On Track To Generate More Wealth Than Other Generations
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There’s been a lot of doom and gloom headlines talking about millennials and wealth. For example, 60% of millennials making over $100k a year say they’re living paycheck to paycheck, while stats from the Federal Reserve say that millennials are behind on building wealth thanks to debt and stagnated wages.
A new study showed that 60% of millennials that make over $100k live check to check. It doesn’t matter how much you make, you’ll never be able to build wealth if you’re spending exceeds your income. Act your wage
— Millionaire Mindsets (@mmindsetspod) June 23, 2021
But there’s some good news!
At current savings rates, millennials are expected to retire at age 61, on average, compared to boomers at 68.
Are millennials actually better at building wealth than boomers?
A new analysis of millennial financial data from Bloomberg paints a rosier picture. Compared to boomers in 1989, millennials in 2021 have done a better job building net worth.
According to the report, 48% of today’s 26-to 39-year-olds are homeowners compared to 52% in 1989. While homeownership is a major path to building wealth, the data suggested that millennials are making a more fiscally sound decision by not owning homes at higher prices.
The data also indicates that millennials are better at building financial assets, despite having “twice as much debt as their parents did at that age”. via Bloomberg:
Millennials may have more debt, but they also have more financial assets — about 25 per cent more than their parents did at their age. This is partly because they are more likely to have a retirement account at work, since these savings vehicles are more common than traditional pensions used to be. You could argue traditional pensions were better, but they were also harder to come by: 86 per cent of millennials have some kind retirement plan, compared with 73 per cent of boomers at their age.
Millennials’ portfolios don’t look so bad.
— Vishal Singh (@Vishal14K) June 26, 2021
The first generation to embrace new tools for wealth building
Millennials are digital natives, growing up on the Internet with a new set of technological tools.
When you really think about it, it’s the first generation to be able to fully embrace these tools, building a new personal finance playbook. Starting and growing a side-hustle has never been easier, allowing millennials to diversify their income streams.
Micro and robo-investing apps like Acorns and Stash make it easy to set up reoccurring investments to deposit at a daily, weekly, or monthly interval.
All things considered, tot bad for a generation that’s had to navigate two large recessions and a sea-change of economic factors as their boomer parents get older.