Gen Z, Millennials, Gen X & Baby Boomers Built Their Wealth In Very Different Ways
Krakenimages.com | Shutterstock Most Americans feel worse than ever about the economy, so having conversations about building wealth seems distasteful.
Despite the widespread struggles to find financial stability, it's true that different generations of Gen Zers, millennials, Gen Xers, and boomers have vastly different ideas of what building wealth means.
Unique ways people build wealth, depending on their generation
Boomers' pensions were their tickets to building wealth
Baby boomers have collectively accumulated more wealth than other generations at the same age, according to a Pew Research Center study.
Many still feel reliant on Social Security and are slightly uncertain about their retirement despite that lofty label. But for most of their lives, building wealth felt attainable.
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They went through financial troubles and economic crises, but the security of their pensions and ability to save for retirement felt promising.
To them, building wealth was a mix of frugality and investing in retirement plans, along with working for pensions. And they did it without having to work second and third jobs or rely on side hustles.
Gen Xers act frugally and save often to build wealth for retirement
Despite not having the same kinds of widespread pension plans that their boomer parents had, Gen Xers are still big spenders.
To them, wealth comes from putting money away. That might mean using traditional savings accounts and investment portfolios, or their retirement plans.
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Unfortunately, financial scarcity and worry, that Gen Z and millennials struggle with, isn't a unique experience. A survey from Transamerica Center for Retirement Studies found that only 18% of Gen Xers believe they're set up for a healthy, secure retirement, even though they have decades of savings and investing in their 401(K)s.
Wealth is about saving and frugality, much like their boomer predecessors. But as retirement looms for this generation, many are uncertain that it's enough.
Millennials' second jobs and side hustles are their attempt to have disposable income
Millennials are the leaders of side hustling their way through life. They've been blessed with internet accessibility and collective entrepreneurial spirit, so second or even third jobs just to make things work is how they've been building wealth.
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Most millennials are trying to monetize every part of their free time so they don't have hobbies left for themselves. Much like Gen Zers, the corporate lifestyles they've been promised would help them succeed aren't paying off.
For those who started families and invested in homes, they don't feel as though they have any other choice than to make money in any way they can.
Gen Zers build wealth around experiences, and it has little to do with money
Gen Zers are known, and sometimes ridiculed for, their spending on micro-experiences. They're the ones waiting in line for a new coffee shop and going out for drinks on a week night.
They might purchase avocado toast that older generations roast them for, but they care more about their own enjoyment than saving money.
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The majority of Gen Zers are pushing off major life milestones out of financial necessity. Some are even drowning under the weight of student loans.
So, their idea of building wealth looks wildly different from their parents and grandparents. Their wealth is in experiences and little treats. It's in living their first couple of decades in adulthood with passion, instead of frugality.
They may have technically thought about and started building wealth earlier than other generations, but it's turned into something much less hopeful for many of them.
Zayda Slabbekoorn is a senior editorial strategist with a bachelor's degree in social relations & policy and gender studies who focuses on psychology, relationships, self-help, and human interest stories.
