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Millennials have been relentlessly mocked as the \u2018broke\u2019 generation. Struggling with student loans and unable to get on the property ladder, it\u2019s easy to assume the entire cohort has missed out on any wealth-building opportunities.<\/p>\n<\/p>\n
But a recent study by the robo-investing platform Wealthfront reveals that many Americans in their 30s and 40s \u2014 the millennials\u2014 have actually outpaced other generations in wealth accumulation since the Covid-19 pandemic.<\/p>\n
Based on Federal Reserve data, Wealthfront estimates that the cohort\u2019s total wealth quadrupled from $3.94 trillion in Q3 2019 to $16.21 trillion in Q3 2024. Meanwhile, Gen X saw their wealth climb just 57.9% and Baby Boomers saw their wealth jump 41.6% over this same period.<\/p>\n
Meanwhile, the number of millennial millionaires in Wealthfront\u2019s own user base increased 144% over the past five years. Put simply, quite a few Americans in this age group are shedding their \u2018unlucky\u2019 image and building prosperity.<\/p>\n
While some of this could be thanks to the Great Wealth Transfer currently underway as millennials inherit wealth from their parents and grandparents, the report indicates there is at least one other factor contributing to millennial success: good investing habits.<\/p>\n
Based on Wealthfront\u2019s analysis of its own user base, wealthy millennials have been successful thanks to time-tested investment strategies such as focusing on low-cost index funds, committing to investing on an ongoing basis to take advantage of dollar-cost averaging, and holding the course during periods of market volatility.<\/p>\n
\u201cOur millennial clients hold more than 90% of their invested Wealthfront assets in our globally diversified portfolios of low-cost ETFs,\u201d the report\u2019s authors state. [1]<\/p>\n
This cohort is also not easily spooked by sudden dips in the market. In fact, \u2018buy the dip\u2019 has become a popular meme for retail investors of all ages, according to the Wall Street Journal. [2]<\/p>\n
Wealthfront\u2019s millennial clients have seen the stock market\u2019s turbulence over the past five years as an opportunity rather than a risk.<\/p>\n
Story Continues <\/p>\n
\u201cWhen Covid-19 roiled financial markets in March 2020, the average monthly net deposits for millennials remained much steadier than those of older generations,\u201d says the Wealthfront report.<\/p>\n
Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B<\/a> \u2014 start using them today to get rich (and then stay rich)<\/strong><\/p>\n Regardless of your age, if you\u2019re looking for investment success, the easiest way to improve your odds is to simply be more consistent.<\/p>\n Dollar-cost-averaging \u2014 investing a steady dollar amount on a recurring basis \u2014 allows you to buy more units of an index fund when the market dips and less when it\u2019s frothy. In other words, it smooths out the volatility to a certain extent.<\/p>\n Instead of trying to pull back when the market looks overvalued, or waiting for a dramatic crash to invest, research suggests the best approach is to just consistently invest and ride out the volatility.<\/p>\n The S&P 500 has delivered a positive return in every 10-year rolling period over the past 82 years, according to analysis by Capital Group. [3]<\/p>\n A typical investor\u2019s chances of a negative return are 33% if she remains invested for one year but that slides down to just 7% if she holds for five years and further down to 0% if she can hold for 10 years or more.<\/p>\n To be fair, it\u2019s easier to ride out the volatility when you\u2019re younger. If you\u2019re retired and don\u2019t have much time to wait for markets to recover you may need a more conservative approach.<\/p>\n But if you\u2019re younger or a millennial, a long-term and patient approach should serve you well.<\/p>\n At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.<\/p>\n We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines<\/a>.<\/p>\n [1]. Wealthfront<\/a>. \u201cHow Millennials Have Thrived in the Five Years Since Covid-19\u201d<\/p>\n [2]. Wall Street Journal<\/a>). \u201cA New Generation of \u2018Buy the Dip\u2019 Investors Is Propping Up the Market\u201d<\/p>\n [3]. Capital Group<\/a>. \u201cTime, not timing, is what matters\u201d<\/p>\n This article originally appeared on Moneywise.com<\/a> under the title: Americans in their 30s, 40s are getting richer faster than boomers \u2014 here\u2019s how they\u2019re outpacing their parents<\/a><\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Shutterstock Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. Millennials…\n","protected":false},"author":3,"featured_media":343366,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,7780,79,67,132,68,128188,61447],"class_list":{"0":"post-343365","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-dave-ramsey","10":"tag-economy","11":"tag-united-states","12":"tag-unitedstates","13":"tag-us","14":"tag-wealth-accumulation","15":"tag-wealthfront"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115463722588477443","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/343365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=343365"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/343365\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/343366"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=343365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=343365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=343365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}