The global elite is experiencing a significant transformation as the ranks of ultra-wealthy individuals grow. Recently, the number of people with a net worth of at least $30 million reached 510,810 by the end of June, reflecting a 5.4% increase since the start of the year. This data comes from a report by the wealth intelligence firm Altrata.
Wealth Distribution Among Generations
Millennials and Generation Z currently represent only 8% of this wealthy demographic, which collectively holds a staggering $59.8 trillion. In contrast, Baby Boomers control nearly 45% of this wealth, while those born in 1945 or earlier account for another 22%. However, this landscape is poised for substantial change.
Projected Changes by 2040
According to Altrata, by 2040, Millennials and Generation Z are expected to comprise over one-third of the ultra-wealthy class. Conversely, the wealth share of Baby Boomers and the Silent Generation will decrease dramatically from more than two-thirds to approximately 20%. Generation X is forecasted to lead, holding about 45% of the wealth.
Impact on Wealth Management and Consumption
This generational shift presents significant implications for wealth management firms, art dealers, and nonprofits. Maya Imberg, head of thought leadership at Altrata, emphasizes the need for these businesses to adapt quickly. Key factors include:
- The increasing importance of environmentally friendly products.
- Shifting interests, such as diminished enthusiasm for yachting.
Imberg stated, “They really have to think ahead because 15 years is not actually that far away.”
Trends in Wealth Transfer
One factor contributing to this growth is the rise of trusts and family offices, which enable wealth to be passed on to younger generations sooner. Maeen Shaban from Altrata explains, “Younger people are able to access that wealth. They don’t have to wait for the principal to pass away.”
The next generation is increasingly acquiring wealth in sectors such as hospitality and technology. Notably, nearly 15% of younger ultra-wealthy individuals find their fortune in hospitality and entertainment, compared to less than 5% of their older counterparts. Additionally, just under 9% of the new wealthy focus on technology.
Wealth Composition and Spending Habits
Real estate and luxury assets constitute almost a quarter of the wealth held by this younger generation. This contrasts with Baby Boomers, who exhibit a trend of downsizing. Instead, Millennials and Generation Z are eager to spend, often acquiring their first homes, expensive cars, or vacation properties.
Shaban notes, “They are in more of an acquisition state than older generations.” While Baby Boomers have a median wealth of $57 million, the younger demographics hover around $44 million, impacting their investment strategies and priorities.
The evolving landscape of ultra-wealthy individuals signifies a fundamental shift in wealth ownership and management. As Millennials and Generation Z ascend the economic ladder, their preferences and values will redefine the nature of luxury consumption and investment.
