New Research Reveals the Complex Character of Wealthy Millennials
Millennials and the wealthy are sometimes overlapping groups subject to plenty of stereotyping. A new survey by Worth, in collaboration with BCG, shows that some of those preconceived notions have weight. People aged 28-43 care more about sustaining the planet and their image. Rich folks buy more and like luxury products. But dig deeper, and the picture, by age or income bracket, isn’t so simple or predictable. Some wealthy millennials are excited to buy fancy new cars, but a sizable portion prefer to rent or grab a rideshare. On the giving side, they are more skeptical of and reluctant to send money to charity. However, they are more inclined to give their time to the right organizations with which they have developed closer relationships.
Worth’s “Millennial Mindset Report” paints a rich picture of wealthy millennials’ values and actions and will help shape our journalism well into the future. Here are the broad outlines of what we’ve found and will pursue deeper in later issues and online.
Who They Are
No longer kids, Millennials are moving into midlife. While the youngest are still in their twenties (at 28) the oldest have now hit 43 years of age. With age come new priorities. Eighty-six percent of our affluent survey takers are married, and 71% have at least one child. Nearly all (94%) own a home. Financial fortune has afforded this level of family stability. For instance, homeownership among all Millennials is about 51.5%, according to data from the U.S. Census Bureau.
What qualifies as wealthy in this study? We gathered insights from 1,989 Millennials in the U.S. with annual household income over $250,000 (over $350,000 in high-cost cities); household net worth over $1M; or both. We learned some interesting things when we compared them to Generation X and Baby Boomer survey takers of similar wealth. (As the survey focused on Millennials, these other generation groups had smaller samples, of 298 and 299, respectively.) About a third of survey takers are ultra-wealthy, with a net worth of at least $3 million.
Despite (albeit incomplete) advances toward gender income parity in the country overall, it’s slid back among wealthy millennials. While men comprise 48% of the U.S. population, they make up 61% of our sample, just one point less than the Boomers we spoke to, but well ahead of the 53% for men in the Gen X group. Our sample skews a bit White, at 84% (the same as for Gen X) vs. 76% in the country as a whole. Black people and the “other” race/ethnicity category were the least represented, each down 5% vs. the whole country.
How They Earn
Many wealthy Millennials are starting off from a good position. Forty-three percent say they grew up in an upper-income household. The figure was only 18% for Xers and 13% for Boomers. Twenty-eight percent of wealthy Millennials in the survey derive at least some of their wealth from inheritance; that’s not significantly more than Gen X (25%) and significantly less than Boomers (39%). Considering how much younger they (and probably their parents and grandparents) are, Millennials may ultimately get a bigger windfall. The much-hyped “great generational wealth transfer” of over $53 trillion from Baby Boomers (according to Cerulli Associates) is picking up steam and will last through 2045. Moreover, 9% of our Millennials benefit from gifted money or possessions, vs. 4% and 2% for Gen X and Boomers respectively.
When making their own money, this generation stands apart for entrepreneurship. Forty-one percent derive some of their wealth from business ownership, vs. just 18% for Gen X and 15% for Boomers. While virtually all of these later generations list salary as a source of income, just 81% of the Millennials do.
How They Invest
Investment returns are the second most-cited source of income in our Millennial group (at 77%), and they are investing their money rather differently than other generations. The public market—such as stocks, bonds, and bundled investments in exchange-traded funds (ETFs)—is still the biggest single category. But at 31%, they are way below the 53% for Xers and 61% for Boomers in the survey.
Every other category is higher than for previous generations, led by cash and savings (high-interest savings accounts rival even resurgent bond returns) and real estate. Private equity and crypto are also on the rise, though still pretty small, at 5% and 4%, respectively. Private equity is also growing strong among family offices of the ultra-wealthy, especially in the U.S.
Where are Millennials getting these investment ideas? Less and less from professional advisors. Just 30% said they engage a wealth manager or financial advisor—well below Gen X and at just half the rate of Boomer respondents. More than twice as many Millennials (61%) prefer to do the work themselves (a figure that stays the same for the ultra-wealthy subset, with net worth of $3 million or more). A big chunk (28%) identify as professional investors. A small portion of Millennials’ information comes from social media and digital ads.
One of the top reasons for doing their own homework is that Millennials think their finances just aren’t that complicated, and they don’t see the value of an advisor. Among those who do go that route, higher returns and customized advice were the biggest reasons (with about half listing each of them.) JP Morgan and Bank of America are the most popular of the 20 major advisory companies we asked about, with 34% and 24% listing them, respectively. Fourteen percent of our Millennials go to independent advisors.
These choices could change, though, based on a 2022 PwC survey of all high-net-worth generations in the U.S. Thirty-nine percent said that they had switched advisors, and 46% said they would in the next one to two years. Given the souring attitudes we found, millennials may make up a big chunk of that.
How They Spend
A few studies and a lot of press over the past year indicate that Millennials (and Gen Z) prefer to pay for experiences like concerts and travel than for stuff. That’s true overall in our survey, with 76% ascribing to that view (a skosh more than Boomers and especially Gen Xers said).
But how wealthy Millennials spend may be a bit different, with 54% putting money towards experiences in the past 12 months, vs. 63% splurging on luxury goods. Usual suspects dominate here, including Gucci, Louis Vuitton, and Prada. Gucci is joined by Buccellati, Cartier, and Pandora in the jewelry category. For luxury watches, standards like Breitling, Patek Philippe, Rolex, and Panerai lead.
The love of prominent brands may gibe with other priorities. Seventy percent said making a good impression is important to them, with 54% saying they like showing off their wealth and success. Perhaps quiet luxury is dying or never applied as much to this generation? But highlighting significant splits—even in their own minds—74% say they favor a more understated approach in their possessions and lifestyle (in line with Xers and Boomers).
Wealthy Millennials are not just attention-seeking slaves to fashion, though. The biggest spending category, at 68%, was health and wellness. And 46% said they live a “minimalist lifestyle” and prefer to rent or share. This shows up in cars, for instance. Thirty-six percent of Millennials prefer to use apps or subscriptions or to rent cars rather than to own one. When wealthy Millennials do buy, the choices they face may be different. Toyota is the brand with the highest recognition among those who made a purchase in the previous year, and they are only about half as aware as Gen X and Boomers of ultra-luxe brands Bentley, Maserati, and Aston Martin (as well as Porsche and electric truck maker Rivian).
In the previous 12 months, just 61% of Millennials spent on air travel, vs. around 80% for the earlier generations. When they do fly, they tend to go with the big brands, especially Delta, American, and United. Few have taken or even heard of private charter brands VistaJet, JSX, and XO.
Like other generations, wealthy Millennials aren’t cruising much, at just 23% in the past year (the same as for Gen Xers). Wealthy millennials mostly go with mainstream lines when they sail. Royal Caribbean and Disney had both the highest brand recognition (in the 70s percent) and all-time spending (in the 50s). Remember, most of these people have kids. Next comes budget line Carnival (spending in the 40s), followed by Princess and Norwegian (in the 30s). At the lowest end (with a large enough sample size to assess) are luxury lines Seabourn and Ritz-Carlton Yacht Collection, which have been recognized in the 20s percent, with spending in the teens.
What They Care About
On a personal level, living clean is the number one value in our Millennial group, with 89% saying that maintaining a healthy lifestyle is important to them. That’s identical to Gen Xers and a mere 2% behind Boomers. The days of young people living hard may be tapering off for this group. For example, 33% of them have decreased spending on alcohol in the past year.
They stand out from earlier generations regarding values in the wider world, with 79% saying they care about climate and sustainability—ahead of Gen X by 14% and Boomers by 15%. This may be ahead of Millennials at large, who face challenges closer to home. In Deloitte’s new 2024 “Gen Z and Millennial Survey” of about 22,800 respondents in 44 countries, 23% of the Millennials listed climate change as a top concern, while 40% listed the cost of living. And 17% said companies should commit to net-zero greenhouse gas emissions within the next decade. In our survey, 67% of wealthy Millennials say engaging in activities promoting social justice is important, 29% ahead of Gen Xers and 37% ahead of Boomers.
They are less inclined to put their money where their mouths are—at least in traditional philanthropy. Just 24% have contributed in the past year. Of the majority that hasn’t donated, 32% say they are skeptical about the impact of philanthropic organizations, 29% say they are overwhelmed by all the options, 16% say they have not considered it, and 9% say they don’t have enough money. But almost half of those who don’t give money will give their time: 44% said they value that kind of contribution more (vs. 31% for Xers and 21% for Boomers. Engagement with an organization is also more important for those Millennials who do donate money, at 68%.
While not asked about in this survey, Worth’s reporting has found that wealthy millennials are also looking for other ways to channel their money towards good. They are showing interest, for instance, in remaking their family business or launching new ventures to be more sustainable and equitable. And they are putting resources into impact investing that promises financial and social returns.
Be it what they care about or how they fund those cares, wealthy U.S. Millennials are forging a new path. For more from our Millennial Mindset Report go to Worth.com/millennial.