Career Testing
Career Testing
Career Testing
WORK-LIFE BALANCE / JAN. 28, 2015
version 5, draft 5

Report: Millennials to be Recipients of the 'Largest Wealth Transfer in History'

iStock

Millennials may soon be catching a break after years of anguish and hardship. In the long-run, cash-strapped, debt-straddled Gen Xers and millennials won’t have to worry about money because of the potential inheritance they could very well receive soon. 

According to a new report entitled "Wealth-X and NFP Family Wealth Transfers Report," approximately $16 trillion of global ultra-high net worth (UHNW) wealth will be transferred to the next generation over the course of the next three decades. This means millennials will be banking on their parents or other affluent family members for the big bucks. 

The NFP Insurance Services report authors are labelling this as the largest wealth transfer in world history. Individuals will be transformed into very wealthy people, but experts are urging the ultra-rich to take the necessary precautions to avoid the government taking this wealth through taxes - in some places, estate taxes can be as high as 50 percent. 

It is estimated that 40 percent of the family wealth transfer, or roughly $6 trillion, is anticipated to be situated in the United States, while the smallest amount of any region will be located in Africa, which will have only less than one percent. In Canada, meanwhile, $310 billion will be passed onto the next generation. 

Brazil, Germany, Japan and the United Kingdom are other countries that will have huge wealth transfers. Indeed, these are major markets for estate planners. 

Charities and non-profit organizations will also be massive beneficiaries of this wealth. The report projects that more than $300 billion in charitable donations will be made over the next 30 years. 

“The world’s wealthiest individuals are approaching retirement, and are starting to implement their wealth succession plans,” the report stated. “We are therefore entering a new and unprecedented era of global family wealth transfers and giving, against the backdrop of an expanding UHNW population and rising UHNW wealth.” 

Furthermore, the report found that UHNW individuals aged 80 and older are worth five times more than the average individual under 40. Also, 68 percent of the ultra-rich are self-made, which means that the affluent must refrain from letting the successors of this wealth blow it. 

“It is crucial that the first generation transmits their business ethos and values to prevent the proverb ‘shirtsleeves to shirtsleeves in three generations’ from coming true,” the report said.  “The family wealth transfer will offer the opportunity for new ultra wealthy individuals to create more wealth than they initially received through entrepreneurial activities, and help transmit the original values and legacies even more successfully.” 

The middle-class won’t be as fortunate, particularly for those who were victims of the economic collapse. Due to the housing crisis, the wiping out of savings and investments and the rising cost of living, the median net worth for middle-Americans had decreased 40 percent during the three years between 2007 and 2010. 

With that being said, there may be an abundance of business opportunities in this time frame. Many heirs of the ultra-wealthy - those who would prefer to go yachting than sit in a business meeting - may sell or have public offerings of these companies. The result may be a greater availability of cash for investments and spending by this generation. 

This wealth won’t last. As many studies have highlighted before a family’s wealth is usually eviscerated by the third or fourth generation.

Get our FREE eBook!
'6 Steps to Landing Your Next Job'

LEAVE A COMMENT

0 comments

 

RELATED ARTICLES

Millenial Workers
WORK-LIFE BALANCE / MAR 21, 2015

The millennial generation has done nothing if not generate a whole lot of chatter around their supposed abilities. One of the most enduring myths has been their status as...

MEDITATION: The Key to Success and Wealth
WORK-LIFE BALANCE / NOV 05, 2013

Someone once told me: “Why try to invent average, when you can copy genius”. A powerful statement, and one that brings me to the discovery of the topic of this post. I’ve...

ancient facepalm
WORK-LIFE BALANCE / DEC 09, 2015

Generally when you think about fails your mind immediately goes to Youtube’s terabytes worth of nut-shots, head-shots and fireworks fired out every conceivable bodily...

Hero Dog
WORK-LIFE BALANCE / MAR 24, 2015

Man’s best friend has stood by him for what is estimated to be 14.000 years. In those years, dogs have helped humanity domesticate livestock, transport goods and keep...

Hunger Games
WORK-LIFE BALANCE / SEP 05, 2015

It’s not uncommon for tension to appear between labour workers and those in upper managerial positions. It’s just not possible for everyone to agree with the decisions...

The Worst Workplace Sex Scandals in History
WORK-LIFE BALANCE / MAY 21, 2015

Sex has always been a big thing in business and politics. There are numerous stories of high-level public officials and corporate executives having affairs, sleeping with...

Get our FREE eBook!
'6 Steps to Landing Your Next Job'
G up arrow