Millennials are often depicted as an avocado-toast eating generation that never quite leaves home.
But perceptions may soon change. In addition to becoming the most populous generation in the U.S., millennials will soon become one of its wealthiest groups.
A new report from the real estate company Coldwell Banker says the millennial generation now has 618,000 millionaires (nearly half of them in California), and they are expected to inherit a staggering $68 trillion from their Baby Boomer parents. The Baby Boom generation is considered the richest in history.
And this year, the number of millennials will also increase to 73 million, while the number of Baby Boomers—previously the largest generation—will decrease to 72 million. Meanwhile, by 2030, millennials in the U.S. are expected to control $20 trillion of wealth, five times what they have today, according to a new report from venture capital research firm CB Insights.
Apart from being a huge generational group, millennials are also a big opportunity for businesses, as they are currently one of the largest consumer segments.
Here’s a closer look at who millennials are:
- Millennials had a collective buying power of approximately $600 billion annually in 2017, an amount that’s estimated to more than double by 2020, according to business consultancy Accenture. Their purchases make up about 30% of all retail sales, according to the study.
- Millennials are more likely to purchase things on impulse, according to other consumer research, and they are more likely to purchase things using subscription plans, such as beauty products, meal plans, and apparel services. As opposed to one-time purchases, subscription plans insure a continuous stream of income for the companies that offer them.
- Helped by low-interest rates and aging into their peak buying years, millennials are also expected to fuel a new wave of home and car buying, as they shift away from more discretionary, or smaller, purchases such as iPhones, microbrewery beer, and—yes—avocado toast.
Millennials also struggle financially
The Coldwell Banker report contrasts with other data that suggests millennials struggle to find jobs and have high amounts of student loan debt, as well as low home-ownership rates, among other difficulties.
- The average millennial reportedly earns about $35,000 annually and has $30,000 of student loan debt.
- Homeownership rates for millennials, who are currently between the ages of 25 and 34, are actually about 8% lower than older generations when they were the same age.
- Millennials, especially men of this generation, have a higher unemployment rate than the national average.
The generations defined
|Silent Generation||Born between 1928 and 1945, this generation grew up following the calamities of the World Wars.||They are called “silent” because they allegedly do not want to create waves socially or politically.|
|Baby Boomers||Born between 1946 and 1964, is one of the largest in U.S. history, born to post-World War 2 affluence and boom times.||They are often called the “me” generation, for their focus on the self, and are sometimes criticized as mindless consumers.|
|Generation X||Born between 1965 and 1980.||Their name comes from the Douglas Copeland novel “Generation X,” about youth not quite fitting in with larger society, and who are ambivalent about life paths, and bored with meaningless jobs.|
|Millennials||Born between 1981 and 1996. (Also known as Generation Y.)||Viewed as spoiled and entitled, they are also lauded for prioritizing meaningful careers and experiences.|
|Generation Z||Born from 1997 to the present.||To be determined!|