Millennials and Gen Z: Set to Overtake Baby Boomers in Wealth by 2040

world's ultra-wealthy population is growing, but a major shift is underway as younger generations inherit fortunes and redefine luxury spending.">

October 2, 2025

The global population of ultra-high-net-worth individuals – those with at least $30 million in assets – continues its upward trajectory. As of June, this exclusive group numbered 510,810, representing a 5.4% increase since the start of the year. This surge in wealth is coinciding with a significant generational transition that is poised to radically alter the industries that cater to the world’s richest people.

The Generational Wealth Shift

Currently, Baby Boomers – individuals born between 1946 and 1964 – control the largest share of this wealth, representing nearly 45% of the ultra-wealthy population. Those born before 1946 account for a further 22%. However, this dominance is set to diminish rapidly as the “Great Wealth Transfer” gains momentum. Analysts predict that by 2040, Millennials and Generation Z will collectively comprise over a third of the ultra-wealthy, while the share held by Boomers and the Silent Generation will shrink to just one-fifth.

This isn’t merely a change in demographics.It represents a basic shift in values, preferences, and spending habits.Experts are urging businesses targeting this affluent clientele to proactively adapt to these evolving trends.

Accelerated Wealth Access Through Trusts and Family Offices

The speed of this transfer is being amplified by the increasing use of trusts and family offices. These structures allow for earlier access to inherited wealth, bypassing traditional timelines. Maeen Shaban, Director of Research and Analytics at a wealth intelligence firm, explains, “That means younger people are able to access that wealth. They don’t have to wait for the principal to pass away.” This accelerated access empowers the next generation to begin investing and spending sooner.

Industry Preferences: A Generational Divide

A striking difference between generations lies in the sources of their wealth and their chosen industries. Older generations typically accumulated wealth in traditional sectors like banking and finance. Younger, ultra-wealthy individuals, though, are frequently enough entrepreneurs who made their fortunes in emerging fields.

Industry	Boomers & Silent Gen (%)	Millennials & Gen Z (%)
Banking & Finance	30%	20%
Technology	4%	9%
Hospitality & Entertainment	5%	15%

This trend reflects the rise of tech giants and the growing influence of social media, were influencers and celebrities are building considerable fortunes. The next generation is 15% more likely to derive their wealth from hospitality and entertainment, and nearly twice as likely to be involved in technology compared to their older counterparts.

Did You Know? The rise of digital economies has created a new class of young millionaires, challenging traditional wealth accumulation pathways.

Spending Habits reflect Changing Priorities

Beyond industry focus, generational differences are emerging in spending habits. Younger, ultra-wealthy individuals are less focused on traditional status symbols and philanthropy, and are more inclined to invest in real estate and luxury assets. Pro Tip: Financial advisors should anticipate a shift in client priorities, with a greater emphasis on sustainable investments and experiences.

Shaban notes that the next generation is in an “acquisition state,” actively purchasing homes, vehicles, and other assets, whereas older generations are often focused on downsizing. This shift underscores a changing life cycle and a different approach to wealth management.

Maya Imberg, Head of Thought leadership and Analytics, emphasizes the urgency for businesses to adapt. “They really have to think ahead because 15 years is not actually that far away,” she warns. “Are environmentally amiable cars going to become more critical? Are they going to be as into yachting? All of these preferences are going to have a really big impact on the bottom line of businesses.”

The Future of Wealth Management

The shifting demographics of wealth present significant opportunities and challenges for financial institutions. Those that can successfully cater to the evolving preferences of younger generations will be best positioned to thrive in the coming decades. Expect to see a greater emphasis on sustainable investing, experiential luxury, and digital-first financial solutions.

The growing importance of technology within the wealth management industry is also undeniable. From personalized financial planning apps to AI-powered investment algorithms, technology is transforming how wealth is managed and transferred.

Frequently Asked Questions About Wealth Transfer

• What is the Great Wealth Transfer? It refers to the largest intergenerational transfer of wealth in history, as Baby Boomers and older generations pass on their assets to Millennials and Generation Z.
• How will this wealth transfer impact businesses? Businesses catering to the wealthy will need to adapt to the changing preferences of younger generations, who have different priorities and spending habits.
• What industries are benefiting from the wealth transfer? Technology, hospitality, and entertainment are seeing increased investment from younger, ultra-wealthy individuals.
• Are younger generations more philanthropic? Currently, younger generations are showing less immediate focus on philanthropy compared to older generations, but this may change as they mature.
• How are trusts and family offices influencing the wealth transfer? They allow for earlier access to inherited wealth, accelerating the transfer process.

What implications do you foresee for the luxury goods market as younger generations gain more wealth? And how will the changing priorities of the ultra-wealthy impact philanthropic giving in the coming years?

Share your thoughts in the comments below and join the conversation!

What are the primary factors contributing to the projected wealth transfer from Baby Boomers to Millennials and Gen Z by 2040?

The Great Wealth transfer: A Generational Shift

For decades, Baby Boomers have held the lion’s share of wealth in the United States. However, a significant demographic and economic shift is underway. Projections increasingly indicate that Millennials and Generation Z are on track to surpass Baby Boomers in total wealth by 2040. This isn’t simply about time passing; it’s driven by a confluence of factors including inheritance, earning potential, investment strategies, and evolving economic landscapes. Understanding this generational wealth transfer is crucial for investors, financial planners, and anyone interested in the future of the American economy.

Understanding the Generational Wealth Landscape

Let’s break down the current situation and the forces at play.

* baby Boomers (born 1946-1964): Currently hold approximately 53% of U.S. household wealth. Their wealth is largely tied to real estate, pensions, and traditional investments.

* Millennials (born 1981-1996): Represent a growing economic force, with increasing earning power and a willingness to embrace new investment opportunities. They currently hold around 28% of U.S. wealth. A 2010 Pew Research study highlighted Millennials as confident, connected, and open to change, traits that influence their financial decisions.

* Generation Z (born 1997-2012): The youngest cohort, Gen Z is entering the workforce with a digital-first mindset and a focus on financial literacy. While their current wealth holdings are smaller (around 7%), their potential for growth is substantial.

Key Drivers of the Wealth Shift

Several factors are converging to accelerate this wealth transfer.

1. The Inheritance Boom: As Baby Boomers age, a massive transfer of wealth is expected to occur through inheritance.Estimates suggest trillions of dollars will pass down to Millennials and Gen Z over the next two decades. This is arguably the most significant driver.
2. earning Potential & career Trajectories: While Millennials faced economic headwinds early in their careers (the 2008 financial crisis, student loan debt), their earning potential is now increasing with experience. Gen Z, entering a potentially stronger job market, is also poised for income growth.
3. Investment Diversification: Millennials and Gen Z are more likely to diversify their investments beyond traditional stocks and bonds. They are embracing:

* Technology Stocks: Investing in innovative companies and disruptive technologies.

* Real Estate (Alternative Options): Exploring options beyond single-family homes,like REITs and fractional ownership.

* Cryptocurrencies: while volatile, digital assets are attracting a growing number of younger investors.

* ESG Investing: Prioritizing Environmental, Social, and Governance factors in investment decisions.

4. Entrepreneurial Spirit: Both generations demonstrate a strong entrepreneurial drive, with a higher propensity to start their own businesses. This creates opportunities for wealth creation outside of traditional employment.
5. Financial Literacy & Technology: Gen Z, in particular, is growing up with readily available financial information and tools online. Fintech apps and platforms are making investing more accessible and affordable.

Impact on the economy & Financial Markets

This generational wealth shift will have profound implications.

* Shifting Investment Priorities: Increased demand for enduring and socially responsible investments.

* Growth of Fintech: Continued innovation and disruption in the financial technology sector.

* Real Estate Market Dynamics: potential changes in housing demand and preferences as Millennials and Gen Z become primary homebuyers.

* Increased Consumer Spending: As wealth accumulates, these generations will drive consumer spending in new and evolving sectors.

* Tax Implications: The large-scale transfer of wealth will likely lead to discussions about estate taxes and wealth taxation policies.

Navigating the Wealth Transfer: Practical Tips

For Millennials and Gen Z:

* prioritize Financial Literacy: Continuously educate yourself about investing, budgeting, and financial planning.

* Start Investing Early: even small, consistent investments can compound over time.

* Diversify Your Portfolio: Don’t put all your eggs in one basket. Spread your investments across different asset classes.

* Seek Professional Advice: Consider working with a financial advisor to develop a personalized wealth management plan.

* Plan for Inheritance: If you anticipate receiving an inheritance, proactively plan how you will manage it.

For Baby Boomers:

* estate Planning: Ensure your will, trusts, and other estate planning documents are up-to-date.

* Consider gifting Strategies: Explore options for gifting assets to reduce potential estate taxes.

* Open Interaction: Discuss your financial plans with your heirs to avoid misunderstandings and ensure a smooth transition.

Case Study: The Rise of Robinhood and Fractional Investing

The popularity of platforms like robinhood demonstrates the changing landscape of investing. By offering commission-free trading and fractional shares, Robinhood has made investing accessible to a younger, more diverse audience. This has empowered Millennials and Gen Z to participate in the stock market and build