By Hamza

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Highlights:

  • Millennials are building wealth faster than Gen X and baby boomers, with their net worth doubling between 2019 and 2023.
  • Key drivers include rising home equity, stock investments, and faster wage growth.
  • Despite their financial gains, millennials face challenges like rising debt and wealth inequality.
Millennial Wealth Growth Chart
Millennials have seen significant wealth growth in the 2020s. (Source: Example.com)

Millennials Are Building Wealth Faster Than Older Generations – Here’s Their Secret

In financial terms, millennials are having a standout decade. Born between 1981 and 1996, this generation has seen their wealth grow faster than both Generation X and baby boomers in the 2020s. Recent reports show that millennials now have more wealth than older generations held at the same age.

“They’re doing better than we did,” said Christian Weller, a Gen Xer and senior fellow at the Center for American Progress (CAP).

A 2024 CAP report revealed that the average wealth of Americans under 40 surged by 49% between 2019 and 2023, reaching an inflation-adjusted net worth of $259,000. Millennials alone saw their wealth double during this period. In contrast, Gen X (ages 40-54) experienced a 7% decline in wealth, while boomers (ages 55-69) saw a modest 4% increase.

Rising Home Equity for Millennials
Millennials have gained significantly in home equity. (Source: Example.com)

How Millennials Are Outpacing Older Generations

Millennials are wealthier now than Gen X and boomers were at the same age. According to a LendingTree analysis, the median millennial had a net worth of $84,941 in 2022, compared to $78,333 for Gen X and $58,101 for boomers (adjusted for inflation).

This wealth growth spans multiple categories:

  • Housing Wealth: Under-40 households gained an average of $22,000 in home equity between 2019 and 2023.
  • Liquid Assets: Bank deposits and similar assets grew by $9,000.
  • Investments: Stocks, mutual funds, and other financial assets rose by $31,000.

“It’s every single category that has gone up,” Weller noted. “Homeownership has risen faster; wages have grown faster.”

The Millennial Wealth Boom: A Cinderella Story

Millennials’ financial journey hasn’t always been rosy. As recently as 2019, they lagged far behind older generations, with a collective net worth of $4 trillion compared to Gen X’s $25 trillion and boomers’ $59 trillion.

But by 2024, millennial wealth quadrupled to $16 trillion, outpacing the slower growth of Gen X and boomers.

Millennials Benefit from Stock Market Growth
Millennials have benefited from a strong stock market. (Source: Example.com)

Why Millennials Are Gaining Ground

1. Recovery from the Great Recession

Many millennials entered the workforce during the Great Recession (late 2000s), a period marked by plummeting home values, high unemployment, and a stock market crash. However, being younger at the time meant the long-term impact on their earnings was less severe.

“Millennials have had more time to recover from the hits they took in the Great Recession,” said Matt Schulz, chief consumer finance analyst at LendingTree. “Many learned valuable lessons that have stuck with them.”

2. Economic Cycles

Millennials benefited from a strong stock market and rising home values in the 2020s. Older generations, particularly Gen X and younger boomers, faced greater financial setbacks during the recession, which still affect their wealth today.

Challenges in the Millennial Wealth Story

Despite their gains, millennials face significant financial hurdles:

  • Rising Debt: Millennials now carry more debt than a few years ago, with the average millennial client at debt-counseling nonprofit MMI holding $30,000 in unsecured debt.
  • Wealth Inequality: Nearly 70% of millennial wealth is concentrated in the top 10% of the generation, according to Inequality.org. This makes millennials the “most unequal generation” in the U.S.
  • Homeownership Delays: Only about half of millennials own homes, as rising prices have made it harder to enter the housing market.

“Older millennials who bought homes before prices skyrocketed are driving much of the net worth growth,” Schulz explained.

FAQs

1. How are millennials building wealth faster than older generations?

Millennials have benefited from rising home equity, stock market gains, and faster wage growth. They also had more time to recover from the Great Recession compared to older generations.

2. What is the average net worth of millennials in 2024?

According to recent reports, the average net worth of millennials under 40 is $259,000, adjusted for inflation.

3. What challenges do millennials face despite their wealth growth?

Millennials face rising debt, wealth inequality, and delays in homeownership due to increasing housing prices.

4. How does millennial wealth compare to Gen X and boomers?

Millennials now have more wealth than Gen X and boomers did at the same age, with a median net worth of $84,941 compared to $78,333 for Gen X and $58,101 for boomers.

5. What role did the Great Recession play in millennial wealth?

The Great Recession impacted millennials less severely because they were younger and had more time to recover, unlike Gen X and boomers who were in their prime earning years.