- Baby boomers own a massive $75 trillion in wealth spread out across stocks, homes, and businesses.
- But millennials are just starting to enter their prime earnings years and have one big advantage.
- Here's the breakdown on the assets owned by each generation, and what's in store for the future.
From stocks to homes to cash, baby boomers own just about everything when compared to younger generations like Generation X and millennials.
Market veteran Ed Yardeni recently ran the numbers and tallied up $75 trillion in wealth held by baby boomers, which is nearly double the $40 trillion of wealth held by Generation X and 1o times the $8 trillion owned by millennials.
Here's the breakdown of assets owned by each generation:
1. Stocks and bonds
Baby boomers: $20.1 trillion
Generation X: $9.4 trillion
Millennials: $0.8 trillion
2. Real estate
Baby boomers: $18.0 trillion
Generation X: $13.4 trillion
Millennials: $5.0 trillion
3. Pensions
Baby boomers: $15.3 trillion
Generation X: $8.8 trillion
Millennials: $2.3 trillion
4. Private business
Baby boomers: $7.9 trillion
Generation X: $6.0 trillion
Millennials: $1.5 trillion
5. Cash
Baby boomers: $8.9 trillion
Generation X: $3.9 trillion
Millennials: $1.6 trillion
The stark difference in assets held by each generation isn't that surprising when you consider how much of a headstart baby boomers have had in progressing through their career and building up their wealth over time.
And that same advantage baby boomers have had—time—is about to be bestowed upon millennials as they enter the prime years for their careers and earnings growth.
Whereas the youngest millennials are only 27 years old, the youngest baby boomer is about 60 years old. That three decade age gap highlights the dynamic that as millennials start to make more money at work, baby boomers are either already retired or on the verge of retiring within the next decade.
That's exactly why Fundstrat's Tom Lee is so bullish on the stock market in the long-term.
"Millennials are significant for two reasons: First, they are the largest single population ever (larger than boomers) at a population of 2.5 billion globally. Second, at an average age of 32.4, they are just entering their prime income years," Lee said in a presentation to clients late last month.
Lee estimates that within the next two to three years, millennials will outpace baby boomers in the total share of disposable income, and by 2029, they will outpace Generation X. They will continue to grow their incomes all the way through 2050, compared to a steady decline for baby boomers and Generation X over the same time period.
And while Yardeni expects baby boomers will start to spend down their savings and help bolster the economy, they won't be able to spend all of it. Various estimates suggest that more than $70 trillion will ultimately be inherited by Generation X, millennials, and to a lesser extent, Generation Y.
That should represent another tailwind for millennials as they look to catch up with older generations and build up their wealth.