According to the Guardian, Millennials will likely be the richest generation ever. Generation Y has gotten a slow start on wealth accumulation due to barriers like student loans and high housing costs. But now that they’re entering their peak earning and home-buying years, they may begin to catch up with other generations. Additionally, many Millennials will inherit substantial sums from their Boomer parents, poising them to become the wealthiest generation yet. Here are 12 reasons why many Millennials will become millionaires.
1. High Educational Attainment
According to Business Insider, Millennials are the most educated generation yet. Workers with bachelor’s and master’s degrees tend to earn more over the course of their careers than people with less education, giving Millennials a financial leg up. Now that they’re reaching their peak earning years, they’ll likely be in a position to start building wealth.
2. Inheritance
The wealth transfer that the Millennial generation will receive from their Boomer parents is reportedly going to be one of the biggest in history. Millennials collectively stand to inherit as much as $90 trillion in assets before 2044.
3. Financial Literacy
Millennials are tech-savvy and have access to lots of personal finance advice through the internet. Educational podcasts and blog posts are teaching them how to manage their money responsibly. According to Investopedia, about 60% of Millennials say they feel confident about their financial knowledge. Their high level of financial literacy may enable them to avoid common pitfalls like lifestyle creep and become the wealthiest generation.
4. Millennials Are Used to Living Lean
Wealth is often spent in a few generations. However, Millennials may have a better chance at retaining the wealth they inherit because they’re used to living a lean lifestyle. As their salaries have grown, they likely haven’t been able to inflate their lifestyles as much as previous generations due to high expenses such as housing, daycare, and student loans.
Nearly 90% of Millennials say they’re pretty good at living within their means. As long as they continue to do so, they’ll be able to responsibly manage any money they inherit.
5. Millennials Are Entrepreneurial
Millennials are known for their entrepreneurial mindset and love of side hustles. Many are starting their own businesses or freelance careers, which can lead to significant wealth accumulation.
6. Delaying Homeownership
While some may see this as a disadvantage, delaying homeownership allows Millennials to invest their money in other assets like stocks, bonds, and businesses, potentially leading to higher returns in the long run.
7. Delaying Kids
Many Millennials are choosing to delay kids, allowing them to focus on their education and careers. Without a family to care for, they may be able to work longer hours to climb the career ladder or take more risks such as entrepreneurship. If they work hard and sock away disposable income during their childless years, Millennials could become the wealthiest generation yet.
8. Millennials May Have Longer Careers
It’s possible that life expectancy could increase as Millennials age, allowing them to have longer careers. If medical advancements enable them to enjoy healthier golden years, they may opt to continue working after traditional retirement age in order to continue building wealth.
9. Lower Divorce Rates
As Baby Boomers going through gray divorce are discovering, dissolving a marriage is expensive. Attorney fees alone can cost anywhere from $5,000 to $50,000 or more, not to mention any alimony or child support payments.
Luckily Millennials have a lower divorce rate than other generations, allowing them to avoid lawyer fees and financially benefit from having two incomes. If Millennials are able to sustain their marriages over the long haul, they may become the wealthiest generation.
10. Access To New Investing Tools
Another reason Millennials will be the wealthiest generation is access to new investing tools. For example, automated robo-advisors make it easy to get started with investing by selecting and managing your portfolio for you. Round-up investing apps like Acorns also lower the barrier to entry by allowing you to invest your spare change. Millennials’ unprecedented access to a wide range of innovative financial products may enable them to become rich.
11. Remote Work Opportunities
The rise of remote work and the gig economy offers Millennials greater access to job opportunities, allowing them to maximize their income from anywhere in the world. Telecommuters and freelancers have the chance to relocate to lower cost areas to reduce their living expenses while still earning a solid wage. Millennials’ ability to work from anywhere may enable them to become the wealthiest generation yet.
12. Millennials Often Cohabitate
Although many Millennials are delaying marriage and kids, they tend to cohabitate at higher rates than other generations. As long as they split bills equitably, this could be a smart financial decision that allows them to save and invest more money.
The Future Is Bright For Millennials
Millennials are likely to have bright financial futures due to factors like inheritance, financial savvy, and remote work opportunities. As long as they keep up their good financial habits and maintain the career momentum they’ve built, they have a good shot at being the wealthiest generation in history.
Do you think Millennials will surpass the financial success of their Boomer parents? Share your thoughts in the comments.
Read More
10 Reasons Millennials Blame Boomers For Being Absentee Grandparents
Broken Families: 13 Reasons Millennials Are Cutting Contact With Boomer Parents
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.