Here's Americans' Wealth by Generation. How Do You Stack Up?

It's no secret that America has become an increasingly wealthy nation. But what may surprise you is just how some generations have had more success than others when it comes to developing and keeping their wealth. Here are the differences by generation when it comes to assets and liabilities.

Assets by generation

The United States has $159 trillion in assets, and baby boomers own half of that. However, baby boomers are only 21% of the country's population. This statistic showcases the significant wealth of boomers in America. The following charts, based on Q1 2023 data from the Federal Reserve, will help you understand the wealth pattern by each generation.

Baby boomers' largest asset category is equities and mutual funds, where they own 56% of the national total. In comparison, Gen X owns 26% and millennials own just 2%. For all generations except for millennials, their assets are almost evenly distributed between real estate and equities.

Millennials, on the other hand, hold more of their wealth in real estate than any other generation, owning six times more than they do in equities and 12% of the total national value. This indicates that millennials generally prefer to invest in physical property rather than financial assets.

Liabilities by generation

Americans have over $18 trillion in total debt. The largest liability across all generations continues to be mortgage loans, making up close to 70% of all liabilities. Millennials carry the most consumer credit card debt, holding over $2 trillion of the national total. This figure accounts for 42% of the total credit balance, indicating that consumer credit is a significant factor in the financial make-up of this generation.

In comparison, boomers have only $0.5 trillion and Gen Xers hold $1.4 trillion in consumer credit. Out of all the generations, Gen X has the most debt, carrying almost 40% of the total national liabilities.

Net worth by generation

Baby boomers' share of net worth is 53%, almost more than double that of Gen X, who hold 28%. Millennials' net worth is about 10% of the baby boomers and just 6% of the national total. This shows that millennials still have a ways to go in building their wealth.

How to build your wealth

Building wealth is not an easy task, but it can be done with hard work and the right mindset. The first step is to establish your financial goals and develop a solid plan to reach them. Look to increase your income with a side hustle or by getting a raise. Another important step is to invest your money in assets that will appreciate over time. You can invest in stocks, real estate, or mutual funds, to name a few.

Another crucial aspect of building wealth is to reduce your expenses and save as much as possible. This can be achieved by creating a budget, cutting unnecessary expenses, and living below your means. It's also important to stay informed and constantly educate yourself on financial matters. Additionally, it's important to protect your assets by purchasing insurance. You should also work on establishing an emergency fund to provide cushion in the event of job loss or other unforeseen circumstances.

Building wealth requires discipline, patience, and the willingness to take calculated risks. By staying focused on your goals and consistently working towards them, you can create a secure financial future for yourself and your loved ones.

Understanding wealth distribution across generations is vital. It helps us understand how different generations manage financial assets and provides insights into challenges and opportunities for each generation. Baby boomers have amassed a significant amount of wealth, but they will pass it on to future generations. Millennials must focus on building assets and reducing debts. It's worth remembering that finances are fluid, and everyone has the opportunity to develop their assets. Take a moment to reflect and gauge where you stand and consider what you can do to improve your financial status.