The rich are getting richer, and younger.
A survey of U.S. investors with $25 million or more finds their average age dropped by 11 years since 2014, to 47. These fabulously rich Americans, whose ranks have more than doubled since the depths of the Great Recession, are younger than less wealthy millionaires. The average age of those with at least a mere $1 million is 62, a number that hasn’t budged in years.
The finding suggests a “vast generational transfer of wealth” is “just beginning,” said George Walper Jr., president of the Spectrem Group, which conducted the study. The sample size was small—185 Americans with more than $25 million in net worth—but the findings are consistent with other economic research on the top 0.1 percent.
Those over 65 hold more than a third of U.S. wealth, a number that hasn’t risen as quickly as the share of elderly Americans in the population, University of California Berkeley economists Emmanuel Saez and Gabriel Zucman found in a 2016 paper. In fact the very wealthiest group of Americans “is actually getting younger.”
Where is this new money coming from? A new generation of millionaires and billionaires probably owe as much to inheritances as to self-made fortunes. “There may be more Mark Zuckerbergs at the top of the wealth distribution than in the 1960s, but also more Paris Hiltons,” Saez and Zucman wrote.
About 172,000 U.S. households have net worths of at least $25 million, Spectrem estimated last year. That’s up from 84,000 in 2008.
About nine in ten investors under 38 attributed their success to “inheritance” and “family connections” in the Spectrem survey. But the same proportion also said “hard work” and “running my own business” played a role. About 70 percent of the richest investors said they’re still working.
The rise in super-wealthy young people shouldn't be all that surprising given the recent boom in Silicon Valley.
Technology and the ease of raising venture capital has created far greater numbers of new billionaires and multi-millionaires than ever before. An initial public offering or a rich funding round can mint a billionaire overnight whereas their predecessors often accumulated riches by building up empires over decades.
Adam Bowen and James Monsees, creators of the ubiquitous e-cigarette Juul, are in their early 40s and late 30s, respectively. Stanford classmates Baiju Bhatt and Vlad Tenev became billionaires at 33 and 31 last May after starting Robinhood Markets Inc., a financial services firm for millennials. And in September, a trio of cannabis-focused private equity investors in their 40s became billionaires after their bet on a Canadian pot firm surged.