Did you know that there are 30 trillion dollars about to be transferred from baby boomers to millennials?

That’s right; I said $30 Trillion – with a T – is about to be transferred to our generation.

This is excellent news, right? Well, most news companies don’t think so…

A recent article from MarketWatch was titled “Generation X and millennials: Don’t screw up the largest wealth transfer in history.” That’s a very reassuring headline, isn’t it? So what is it about this transfer that has this news agency concerned, not to mention an entire generation? Let’s first make sure we have an understanding of the two different generations to give us some background to this great transfer of wealth.


Baby Boomers


So first, who are these baby boomers that millennials are supposed to be getting all this money from? A baby boomer is anyone born between 1946 and 1964 and makes up nearly 20% of the American population. Until recently it was the largest generational group in U.S. history. The baby boomer generation grew up during a time of dramatic social change. Think about events like the Vietnam War, Civil Rights Movement and the Cold War to name a few big ones.




Millennials are the generation born between 1982 and 2004 and have also been called Generation Y. This generation followed Generation X (anyone born between 1964 and 1982) and recently has surpassed the Baby Boomer generation in its share of the American population. Millennials, in turn, have experienced events like multiple wars in the Middle East, multiple economic recessions and the growth of the internet and social media.


The Wealth Transfer


Now let’s talk about this great wealth transfer. Baby boomers have worked hard during their life to earn and save their way to retirement. Now most of them are in retirement or preparing for it. Generationally, baby boomers learned how to manage their money from their parents, who grew up during the Great Depression and World War II. The money habits the developed are a direct reflection of their parents. Thankfully, this means they’ve learned how to save more than they earn and not overextend themselves financially. This means the baby boomer generation has been able to build their way to nearly $30 Trillion in savings. AARP statistics show that people older than 50 hold nearly 80% of American’s wealth. Over the next 30 to 40 years as baby boomers are reaching the end of their retirement, they’ll be looking to pass their wealth to their kids and grandkids – that’s us! This sounds like great news, and no real cause for concern, right? Wrong – this transfer is not a simple one. There are these things called emotions and family dynamics that are going to have a huge part in this wealth transfer.


What’s the holdup?


Do you remember having family game night? Or maybe even a family movie night growing up? For most families, this was a night everyone looked forward to. Now, do you remember having a family budgeting night? If you’re like most millennials, there wasn’t a dedicated time to talk about money with our family growing up. Most families left money talk for private conversations and didn’t bring up budgets in front of the kids. This led to what I call a lack of financial values being passed from one generation to the next. Now this isn’t to say that we haven’t formed our own financial values, or that baby boomers don’t have their own financial values. For our generation, they haven’t been transferred like in past generations. This means that the millennial generation has had to form their own financial values while baby boomers didn’t see their values passed directly to us over the kitchen table.

On top of this millennials have had a rough go financially speaking. There have been several financial events in our lifetime that have had a lasting impact on how we view money. Events like the crisis, housing crisis and ensuing recession of 2008, to the even more recent bitcoin bubble in 2018 have shown us how truly fickle money and the markets can be. Many millennials have experienced the unemployment and loss in savings associated with these events. Seven years after the 2008 recession, national unemployment dropped to 5.4%, a record low. As a generation, millennials saw unemployment rates as high as 10% at this time, with higher estimates for those stuck in low-wage, dead-end jobs. We’ve grown up through increasing higher education costs, with student loan totals passing 1.41 trillion dollars and nearly 70% of college students having some form of student loan debt. I’m not trying to paint a bleak picture here. It’s important to understand how these events have impacted millennials. Just consider the impact these events have had on how millennials view money – sometimes it feels like a wild roller coaster that holds us from achieving our goals and living out our financial values.

So no wonder news companies are afraid millennials are going to screw up the greatest transfer of wealth over the next 30-40 years. Millennials are buying homes less, are swamped with more student loan debt and earning less than recent generations. Are we really in a great situation to accept this transfer of wealth and use it wisely?


How to Prepare


So if we’re going to be ready for this great transfer of wealth in time, we have to take some steps, and NOW!

You’re probably thinking I’m about to say something about stop spending money on avocado toast, right? WRONG. Let’s talk about values, financial values. We’ll get to the avocado toast later.

Values are defined as “important and lasting beliefs about what is good or bad and desirable and undesirable.” Values are learned from those around us, both our family and friends, over the span of our lifetime. You’ve probably talked about your values and even shared them without using that word. Have you ever expressed an opinion about politics, about religion, about exercising or your diet? Most of us have, at some point, expressed some kind of opinion about any or all of these topics. Opinions are often a reflection of our values. Have you thought about what your financial values are?


Step 1: Determine Your Financial Values


Financial values are important and lasting beliefs about money and what is good or bad and desirable or undesirable. Like values, they are learned from those around us. We reflect our financial values often in our daily habits around money. Do you buy that avocado toast or premium coffee fairly often? Do you save most of your paycheck each month? Do you drive a used car or lease the newest model every few years? For most people, millennials especially, we start living our financial values long before we’re fully aware of them. Millennials, since we’ve grown up with money and money management not being a nightly conversation with our families, have very often not fully verbalized what these values are and how they impact our lives.

We’re avoiding talking about our financial values, whether from the financial events we’ve experienced or the lack of comfort in talking about money. This avoidance is a major error. But it’s a mistake we can correct at any time by asking ourselves a few simple questions:

  • Why is money important to you?
  • Why do you spend the way you do?
  • Why do you invest the way you do?

Using the answers to these questions, you can begin to think about your financial values and how you should be spending, saving and investing your money.


Step 2: Start Living Them


You’re probably thinking at this point – “what about the whole budgeting, paying down debt and saving for retirement?” Okay, you’re right, that stuff is important, really important and we should talk about that. First, though, you have to get really clear on what you value and how you want your financial life to reflect that. This is why older generations are saying we’re going to screw up this transfer of wealth. They think our values are fleeting and only temporary – we need to show them different.

This process of introspection and self-reflection is the first step we always take with clients. In order to get really clear on what you need to do financially, you need to be really clear on where you’re at and where you want to go. You can’t do this without asking yourself first those questions above.

Once you’re super clear on where you want to go, start examining where you’re at now. Start asking yourself if your lifestyle is reflecting what you believe to be desirable and good. Are your purchases reflective of the financial values you have? If so, great, you’re doing great. If not, this is where the hard part comes in.


Step 3: Start Getting Your Financial Life Together


For nearly everyone, it’s really hard to make lifestyle changes without the help of a professional. Think about the last time you joined a gym. Were you able to start a great workout routine and lose that extra holiday weight without the help of a trainer, or at least researching some routines online? I doubt it. Your financial routines are the same. It can be really hard and even scary for many of us to start trying to live out our financial values. That’s where a financial advisor comes in.

A financial advisor is going to help you get super clear on what your values are and what steps you need to be taking in order to live those values out. How do we do this? For starters, we’ll be the ones to ask you those questions listed above. From there we’ll talk about how your financial routines and habits can reflect those values. Most importantly, we’ll work with you to establish a prioritized action list to start living your financial values today. We call this living your Signature Life and it’s our goal to help you start living it, today!

If you’re going to be ready for this great transfer of wealth, you should start living your financial values today and it may help to get your financial life together! Give us a call to get started.





Opinions expressed are those of the author and not necessarily those of RJFS or Raymond James. All opinions are as of this date and are subject to change without notice.

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