Should you’re a Millennial (like me), you’ve in all probability felt each richer and poorer on the identical time. You’re possible forward of the place your dad and mom have been financially at your age, however behind them on different life milestones, similar to proudly owning a house or having youngsters.
Final week I used to be a part of a panel hosted by The Manhattan Institute titled Are Millennials Doomed? Stagnation, Success, and the Politics of a Divided Generation. All kinds of cultural and political subjects have been coated throughout the dialogue, however I need to dig deeper on the monetary ones and why this sense of “richer but poorer” persists.
Whereas cash isn’t the one factor that impacts Millennials, it influences the place they stay, the place they work, and what insurance policies they help. And since Millennials are the biggest generational cohort in America at the moment, these choices might affect how you stay as properly.
To start out, let’s study Millennial wealth and the way being the richest era for his or her age in historical past doesn’t remedy all of their issues.
Completely Rich, Comparatively Much less So
In absolute phrases, Millennials have extra inflation-adjusted wealth for his or her age than any prior era. You’ll be able to see this within the chart beneath which reveals the ninetieth, seventy fifth, and fiftieth (median) inflation-adjusted web value for households age 26-41 from 1989 to 2022/2023 (the newest information accessible). Households age 26-41 in 2022 correspond with people born from 1981-1996 (aka Millennials). By holding this age group fixed over time, we will evaluate Millennials in 2022 to similarly-aged cohorts prior to now:
As you may see, Millennials in 2022 had extra inflation-adjusted wealth than prior generations going again to 1989.
Extra importantly, this sample held throughout most of the wealth spectrum. You’ll be able to see this within the chart beneath (much like the one above), which reveals the fifteenth, twenty fifth, and fiftieth percentile web value over time for households age 26-41:
All the way in which right down to the fifteenth percentile, Millennials had roughly the identical (or extra) wealth than prior generations on the identical age. It’s solely Millennials beneath the fifteenth percentile which have much less wealth than prior generations. These are the households which might be struggling probably the most within the Millennial cohort and will undoubtedly use some form of assist.
Why are they struggling? Larger debt masses (principally from pupil loans) and incomes that aren’t maintaining with housing prices. The chart beneath illustrates that Millennials have a lot greater non-home debt (e.g., pupil loans, bank card debt, and so on.) than prior generations. That is very true close to the extremes (i.e. ninetieth percentile):
Although non-home debt has come down considerably in recent times, that is after rising persistently for the previous three many years.
Exterior of non-home debt, Millennials are additionally spending a bit extra of their earnings on lease as properly. As you may see, the rent-to-income ratio for households age 26-41 was on the highest recorded in 2022:
So, whereas Millennials are usually wealthier than prior generations, there are different elements which might be holding a few of them again.
Extra importantly, having extra absolute wealth doesn’t at all times imply that you just’re higher off. Relative wealth issues too. Regardless of being the biggest generational cohort in America at the moment, Millennials solely personal 10.7% of all wealth as of Q2 2025, according to the Federal Reserve:
That is partially to be anticipated, since wealth is very correlated with age (as a consequence of years of extra work, saving, and investing).
Nevertheless, Boomers nonetheless management ~5x extra capital than Millennials. Such a monetary energy imbalance will affect aggressive dynamics for scarce sources similar to housing. This partially explains why the median age of first-time dwelling consumers is 38 and for all homebuyers is 56 (each at report highs):
According to the University of Cambridge, 62% of Boomers owned properties at 35, whereas solely 49% of Millennials did. A few of this is because of totally different way of life selections made by Millennials. Settling down later in life or renting by choice are each impacting these statistics. Nevertheless, having 1/fifth of the capital of a typical Boomer doesn’t assist both.
So, how can Millennials repair these issues? I see three paths ahead.
The Three Paths Ahead for Millennials
With regards to enhancing their monetary future, there are three paths that Millennials can select from: reform, exit, and improvement.
- Reform: Reform is the method of campaigning for and enacting coverage adjustments that may profit Millennials. Such reforms embody: decreasing zoning restrictions (to extend housing provide), enacting stronger time period/age limits for political leaders, and forgiving pupil mortgage debt (which weighs down a subset of Millennials). Whether or not or not you help any of those insurance policies isn’t related, the primary thought right here is that Millennials would voice their opinions and enact change to enhance their scenario. Reform works by making modifications to the prevailing system by means of authorized channels.
- Exit: Exit is the method of abandoning the prevailing system and constructing a brand new one which higher fits a gaggle’s wants. Politically, the rise of Democratic Socialism amongst Millennials and Gen Zers (e.g. Zohranism) will be seen as a type of exit. Financially, cryptocurrency is an exit from the standard monetary system. Whether or not or not you agree with exit as a philosophy, it’s at all times an choice for these dissatisfied with the established order.
- Improvement: Improvement is the method of ignoring the system altogether and specializing in how one can enhance your individual life. As an alternative of asking in regards to the system, it asks you about your self. What are you able to do to enhance within the coming months and years? Are you able to be taught new abilities? Are you able to deepen your relationships? Are you able to higher your well being? No matter it’s, improvement is targeted on issues that you may immediately management. Of all of the ways in which particular person Millennials can attempt to enhance their lives, improvement appears to be the one with the very best chance of success.
In full, you may repair the prevailing system (reform), discover a new system (exit), or ignore the system altogether and concentrate on your self (improvement). Whereas there are execs and cons to every of those approaches, I’ve a powerful desire for improvement. The reasoning is easy—one individual is unlikely to make a distinction when reforming a system or exiting to a brand new one.
Nevertheless, your actions will have an simple affect by yourself life. The way you spend your time, cash, power, and energy will possible make a a lot greater distinction than any coverage or system ever might. Don’t get me mistaken, I help the political course of and suppose we ought to attempt to make adjustments the place we would like them.
But, politics is difficult and issues don’t at all times work out in your favor. You’ll be able to’t management elections. You’ll be able to’t management different folks. However you may enhance your individual life. That choice is (and can at all times be) on the desk.
I don’t imagine that Millennials are doomed. A lot of what we see at the moment is, sadly, only a timing downside. Extra wealth will likely be handed on within the coming years and many years.
A few of that is already occurring. As I’ve famous earlier than, 50% of parents are financially supporting their Gen Z and Millennial children to the tune of about $1,500 a month. This isn’t useful for the 50% of Millennials which might be not getting monetary help, however it’s what it’s.
I don’t know what the longer term holds for Millennials. I don’t know in the event that they’re “doomed.” However I do know that those that concentrate on growing themselves unequivocally gained’t be.
Thanks for studying.
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That is submit 473. Any code I’ve associated to this submit will be discovered right here with the identical numbering: https://github.com/nmaggiulli/of-dollars-and-data
