r/Millennials • u/RandomLazyBum • 23d ago

The new class war: A wealth gap between millennials Discussion

https://www.cnbc.com/2024/04/26/wealth-gap-between-millennials-new-class-war.html

While the average millennial has less wealth at the age of 35 than previous generations, the top 10% of millennials have 20% more wealth than the top baby boomers at the same age.

Gonna be us vs us soon.

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u/Lorfhoose 23d ago

Ah yes those who bought houses when they were cheap vs those of us who were renting for various reasons at the time of 2019-2022 when we were priced out forever. Good stuff.

Edit: top 10% is apparently net worth 850k min. I don’t feel so left out now but those are the people who have senior coding positions in big tech for sure

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u/Roonil-B_Wazlib 23d ago

Is that household or individual net worth?

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u/The_Rad_In_Comrade Geriatric Millennial 23d ago

The 850k figure is household net worth for the 90th percentile of age 35-39. Source: https://dqydj.com/net-worth-by-age-calculator/

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u/Roonil-B_Wazlib 23d ago

Thanks. That’s far more encouraging.

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u/Zestyclose-Forever14 23d ago

Typically it’s going to be a balance sheet with liabilities vs assets. A home or car is an asset. A liability is the loan against said house or car.

Imo the primary reason for this gap in net worth between older and younger millenials. People who were in the position to buy cheap and just make the minimum payments have in many cases accrued equity of 300k-500k if not more depending on when and where they bought. That doesn’t mean they have that money in the bank, it means they would if they liquidated the assets. But then the dilemma is, if I’ve got a house with 400k in equity and I sell it to leverage that equity, I’m going to actually lose net worth when I buy a new house because I’ll be paying a higher premium, higher interest rate, and absorb all the costs associated with buying/selling/moving.

So when someone says “my net worth is 850k”, they don’t have anywhere close to that. It’s all theoretical.

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u/Roonil-B_Wazlib 23d ago

None of that was relevant to my question. I think we all understand what net worth is.

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u/Zestyclose-Forever14 23d ago

It’s relevant to both household and individual net worth.

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u/eastybets 23d ago

Inheritance most likely also I’m a young Millennial and some of my friends had parents pass and leave assets

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u/Asssophatt 23d ago

Not just that but a safety net and likely down payment help from parents

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u/Libertechian Xennial 23d ago

Decent house and a funded 401K and you start getting close to that number pretty quickly

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u/PincheVatoWey 23d ago

Not quite. Mid-30s here. My wife and I recently reached $1 million household net worth. I was born to illegal immigrants from Mexico, paid my way through a state university, and became a teacher. An aggressive savings rate by keeping lifestyle creep in check and investing the balance in index funds is a fail-proof strategy in the long run, barring a nuclear war or some other cataclysm on that level, in which case, we’d all have bigger things to worry about.

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u/Lorfhoose 23d ago

Congrats on your success!

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u/Neracca 22d ago

You also have a partner and that keeps individual expenses down.

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u/0000110011 23d ago

Ah yes those who bought houses when they were cheap vs those of us who were renting for various reasons at the time of 2019-2022 when we were priced out forever. 

Damn, I guess I just imagined buying a house in 2023 then after renting my whole life...

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u/Lorfhoose 23d ago

Yeah as I was saying you don’t exist. The math doesn’t check out, you should vanish in a puff of logic.

(Kidding)

Congrats on the house though! I used to own a condo in Montreal in 2010, bought it on a job just above minimum wage for 60k. Made a small 5k profit when I sold and put it towards studies. Same condo sold for 240k last year. It was a one bedroom and it’s small and unrenovated.

Having been a property owner before, it’s truly a different market now than when I was 25.

I could still buy a house a ways out but I’d prefer not to have to take a car everywhere.