Millennials Are Outpacing Older Generations in Wealth Building: Here’s Their Secret

Previous age groups often criticized millennials for excessively splurging on iPhones and avocado toast. It seems these spending patterns may have been more prudent than initially thought.

According to data provided by investment platform Wealthfront, millennials have been amassing wealth more rapidly than preceding generations over the past five years, which coincides with the start of the COVID-19 pandemic.

Over the last half-decade, millennials using this platform have seen their assets increase by 137%. During this timeframe, Generation X investors expanded their net worth by 76%, whereas Baby Boomers saw an uptick of only 40%. As of January 2020, the typical young adult under Wealthfront management held around $45,600 in savings and investments. This sum has since surged to approximately $108,130.

Wealthfront pointed out that the count of millionaire millennials using their service increased by 144%. Concurrently, the number of millionaire members from Generation X rose by 31%.

"The primary driver behind millennial financial prosperity appears to be their investment choices. Compared to earlier generations at similar life stages, millennials hold greater amounts in stocks. As a result, this quicker buildup of assets stems from utilizing investment methods offering superior returns relative to risk levels. Most millennials prefer not to gamble with their earnings in attempts to outperform the stock market; rather, they understand that adopting a passive investment strategy yields better outcomes over extended periods," explained David Fortunato, CEO of Wealthfront, during an interview accessible via IP address 5.180.24.3.

The information originates from more than 1 million Wealthfront customers; however, due to being sourced from one platform, it has certain constraints. Specifically, the reported 137% increase in millennial wealth does not factor in outside investment accounts, retirement plans like 401(k)s, stock options provided by employers, or property investments.

However, external data indicates that Millennials' net worth is increasing more rapidly. The overall wealth of American Millennials surged from approximately $3.9 trillion in the third quarter of 2019 to almost $16 trillion by the third quarter of 2024, effectively multiplying fourfold. as per the Federal Reserve .

Millennials have similarly become involved in property ownership. As reported by the Wall Street Journal From 2020 to 2024, the property owned by millennials saw an increase of $2.5 trillion in value. Despite older generations maintaining higher overall net worths and real estate assets, millennials are expanding their holdings at quicker speeds. According to mortgage information provided by Wealthfront, millennial-owned homes have appreciated over 40% within the last half-decade, compared with approximately 33% growth for Generation X and about 29% appreciation for Baby Boomers.

Individuals from the Millennial generation were born between 1981 and 1996, whereas those belonging to Generation X were born between 1965 and 1980. The Baby Boomer demographic, however, was born between 1946 and 1964.

Fortunato also noted that millennials are aggressive savers, which has helped them accumulate wealth.

"When examining the savings rates across different age groups, it becomes evident that Millennials have a substantially higher saving ratio compared to earlier generations. This trend is anticipated to intensify further in the future as Millennials advance in their professional lives and amass greater riches," he stated.

This is all great news for millennials, who collectively have encountered significant financial hurdles. A large number started their careers during the 2007-09 economic downturn and have since been grappling with issues such as student debt. wage stagnation In regions with a costly real estate market, the impacts of the pandemic, coupled with soaring inflation.

Each generation is influenced by the wider economic conditions surrounding them, and millennials are no exception," Fortunato stated. "Similar to numerous millennials affected by the Great Recession, I completed college in 2008. Joining the workforce amid a worldwide downturn left an indelible mark on my financial mindset. This experience underscored the significance of readiness for unforeseen occurrences from a monetary standpoint. Additionally, it demonstrated to me that markets do rebound over time.

Data from Wealthfront indicates that millennials might have developed sound financial practices even with the obstacles they faced. The firm observed that during the early stages of the pandemic, millennials consistently added funds to their accounts more steadily compared to older generations. Additionally, the study revealed that millennials expanded their retirement savings more rapidly than Gen X investors—despite Gen X being nearer to retirement age. Between March 2020 and February 2025, millennial IRA balances increased by 112%, whereas those for Gen X rose by only 52%. These gains were attributed to greater contributions as well as positive market performance.

"This demonstrates the resilience of millennials, primarily due to the challenges they've faced. Their toughness, combined with their dedication to long-term investment strategies, has enabled them to profit from significant market growth over the past five years," Fortunado stated.