Rich people of different ages prefer to spend their money in vastly different ways
- Millennials, Gen X, and baby boomers all prioritize their long-term wealth goals differently, according to Boston Private's 2018 "The Why of Wealth" report.
- Millennials focus on goals associated with "purpose" and "idealism," while older generations prioritize "personal and family-oriented goals."
- However, spiritual fulfillment and achieving material well being rank low for all three generations.
High-net-worth millennials, Gen X, and baby boomers may all view wealth as a means of peace of mind and happiness, but the similarities stop there.
Each generation has different long-term wealth goals, according to Boston Private's 2018 "The Why of Wealth" report, which surveyed respondents with net investable assets of $1 million to $20 million.
Among all generations surveyed, 55% wanted to use their wealth to live a life of pleasure without financial concerns, which the report says relates to their perception of wealth as a peace of mind and happiness. Many also want to leave their children or heirs with means to live a comfortable life (45%) and use their wealth to reach entrepreneurial success (45%). The survey allowed multiple answers.
But, according to the report, wealth goals change with age, resulting in generational differences when it comes to prioritizing long-term goals.
Compared to other generations, millennials place more emphasis on achieving entrepreneurial success (65%), fostering change in the community or world (51%), and contributing to improve their society and community (40%).
"These findings reflect the fact that younger respondents are more imbued with a sense of purpose, idealism, and a desire to make a positive contribution to society," the report says. "But these sentiments tend to be diluted over time and replaced by more personal and family-oriented goals."
This is evident in the priorities of baby boomers - they place more emphasis on living a pleasurable life without financial concerns and leaving heirs with means to live comfortably more so than any other goals on the list.
The long-term goals of Gen X are a bit of a hybrid of what baby boomers and millennials focus on the most. Like baby boomers, Gen X prioritizes living a pleasurable life without financial concerns, more so than any other generation, in fact.
But unlike baby boomers, they also strongly focus on achieving entrepreneurial success as well as enhancing their personal knowledge and pursuing higher education - both goals that millennials also care strongly about. However, they are the generation to least prioritize using their money to improve society and community.
While seeking spiritual fulfillment ranks low for all three generations, baby boomers and Gen X both place more significance on this goal than millennials do.
It's also worth nothing that achieving a high standard of material well-being also ranks low among all generations, which is reflective of another finding the study found when looking at how each generation defines wealth - that wealthy people highly value immaterial aspects of wealth over material goods.