5 Ways Rich Millennials Have Doubled Their Wealth Since 2020
Hear a lot of hype about how younger adults can’t get ahead in today’s America?
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As Beck once put it, don’t believe everything that you breathe. It turns out that younger Americans are actually doing pretty well — better, in fact, than other age groups in the wake of the pandemic.
Millennials, born between 1981 and 1996, have more than doubled their average net worth since the end of 2019. And yes, that’s adjusting for inflation.
If we carved up the data differently to include all households under 40 today (younger millennials and older Gen Zers), these households have grown their wealth by 49% from the fourth quarter of 2019 through the fourth quarter of 2023.
Compare that to households aged 40-54, which saw their wealth drop by 7%. Or households 55-69 grew their wealth by a doddering 4%.
So, how did younger adults do so much better over the last four years?
Strong Labor Market & Wage Growth
Unemployment has remained extremely low in the hot post-pandemic economy. It’s remained under 5% since mid-2021, and under 4% since the start of 2022.
That’s led to an unusually tight labor market. Employers can’t hire enough workers, which has led many to hold onto even bad workers they wish they could let go.
That tight labor market has driven strong wage growth, even adjusting for high inflation. Median inflation-adjusted wages have risen 2.9% for workers aged 24-34 from the end of 2019 through the end of 2023. That marks a faster gain than other Americans (2.1%).
Real Estate Wealth
The narrative goes that the explosion in home values post-pandemic has priced younger Americans out of the housing market.
The data doesn’t support it.
Since the pandemic, the homeownership rate for households under 35 has actually risen, not fallen. It grew from 36.7% in 2019 to 38.6% in 2023.
And, of course, those younger homeowners have benefited greatly from the runup in property prices.
Younger investors have also benefited from the growing availability of fractional real estate investments. These include real estate crowdfunding platforms and passive real estate syndications available to non-accredited investors. Older generations didn’t have easy access to these passive real estate investments in their youth.
Small Business Ownership
Entrepreneurship has thrived in the wake of the pandemic — especially among younger adults.
The business ownership rate nearly doubled among younger households from 6.6% in 2019 to 11.3% in 2022. In fact, that entrepreneurship rate marks an all-time high for households under 35.
More Americans see the promise of freedom and flexibility offered by owning your own business. And they’re executing on it.
Strong Stock Market Performance
The S&P 500 has more than doubled since the early days of the pandemic.
In March of 2020, it closed at $2,237. At last check, it closed at $5,188. And that says nothing of the dividends paid over that period.
Millennials lived through the Great Recession, and they learned a valuable lesson: markets rebound. You lose money not when the market drops, but when you panic and sell during a drop.
Reduction in Non-Mortgage Debt
Younger Americans paid down their non-housing debts by an average of $5,000 in the four years from the end of 2019 to the end of 2023.
Let it serve as a reminder that you can grow your wealth in two directions: by growing savings and investments, and also by reducing debts and liabilities.
Final Thoughts
Dare we hope that millennials and Gen Z will actually turn out just fine? That the sky isn’t falling over America?
Sure, the US faces plenty of challenges, both within and abroad. But there weren’t many periods in our history when that wasn’t the case.
Instead of crying “Crisis!” every time we see something we don’t like, perhaps we should all just take a deep breath and focus on coming up with compromise solutions to big problems. It’s better than the alternative of just yelling at each other all the time and panicking that everyone other than your tribe is ruining the country.
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This article originally appeared on GOBankingRates.com: 5 Ways Rich Millennials Have Doubled Their Wealth Since 2020
