Baby Boomers is “the richest generation that has ever lived,” shows the calculations of a large insurance company
Money-Dutch, photo: Dreamstime
The generation “Baby Boomers”, born between 1946 and 1970, became “the richest generation that has ever lived”, according to a new wealth report, made by Allianz Financial Company. And it seems that the next generations will not be able to devote them too soon.
Allianz analysis shows that the way Baby Boomer has been enriched has less to do with financial caution and more luck.
“A unique historical situation-a strong economic growth, accessible real estate markets and expansion stock markets-allowed them to build a consistent wealth,” wrote the Allian researchers.
How are the boomers so rich?
In simple terms, the “Baby Boomers” generation has benefited most from the economic earnings of the last decades, while suffering the least of financial crises – especially the “baby boomers” generation living in the US, according to money.com.
By the end of June, Americans in the “Baby Boomers” generation had accumulated an amazing wealth of 80 trillion, according to the federal reserve data. This represents more than half of the total wealth of households in the country, despite the fact that this generation represents only about 20% of the US population.
By comparison, the X generation (people born between 1965 and 1980) owned about 40 trillion. Millennials, born between 1981 and 1996, had about $ 15 trillion.
Most of the wealth of the “Baby Boomers” generation comes from a combination of real estate actions and assets. In fact, only the value of the “Baby Boomers” generation portfolio – which rises to 23 trillion – far exceeds the total assets of all millennials.
Allianz simulated how the wealth of different generations grew in extremely different rhythms, despite the fact that individuals made the same prudent financial decisions.
The analysis assumed that these major factors remained the same: an equity report of 45%, an annual saving rate of 10% and a 40 -year -old saving period, starting at the age of 20.
In these circumstances, the “Baby Boomers” generation has enjoyed an average annual yield of 9.1% and managed to accumulate savings over 850% of their available income. The X generation, according to the same set of rules, had an annual performance of 6.7% and saved 606% of its income. The Millennials generation had a worse evolution – with an annual performance of 6.5% and life savings of 430% of their income.
Of course, personal behaviors also play a role. Allianz noted that the increase of the saving rate above the 10% basic level and/or the allocation of a larger part of the portfolio to higher risk investments could generate higher yield.
