BofA in 2024 Study of Rich Americans surveyed more than 1,000 people who had at least $3 million in family investment assets and found that 72% of people age 43 and younger were “skeptical” about investing exclusively in traditional assets. Conversely, only 28% of people age 44 and older were wary of keeping all their wealth in stocks and bonds.
Part of the reason, the study found, is that 94% of Gen Z and Millennials are interested in collectibles, with watches, jewelry, and sought-after wines and spirits topping their wish list. They also have an interest in rare cars, antiques, sneakers and art.
Their interest is perhaps not surprising—after all, the future “richest generation in history” has already shown an interest in the finer things in life. In January, Bain & Co report showed that by 2030, Generation Z will account for 25% to 30% of luxury purchases, while Millennials will account for 50% to 55%.
Authors Claudia D’Arpizio, Federica Levato, Andrea Steiner and Joël de Montgolfier added: “Thanks to the investment mindset, the market value of jewelery was expected to reach €30 billion in 2023, with fine jewelery establishing itself as a vibrant investment destination. amid uncertainty… Watches continued to thrive despite growing polarization around a few industry winners.”
Interest in collectibles, which also includes handbags and memorabilia, has declined with each successive generation, with 57% of Boomers saying they were interested in the asset class, falling to 55% among the Silent Generation.
A younger generation, 80% of Gen Xers (ages 44 to 59) are interested in collectibles, although their interest is more dependent on coins, as well as jewelry and watches.
Younger wealthy people also seem to have a different approach to dividing their assets in the future. Looking at inherited art, the BofA survey made it clear that Gen Z and millennials want other people to enjoy it too – while 56% of people aged 21 to 43 said they would keep some pieces in their private collections, 32% said they would donate one or more works to museums or private foundations, and 26% said they would share some works with non-arts institutions.
This compares with older generations, 77% of whom said they would keep the collection for personal use, and 19% said they would donate the item to a charity, foundation or museum.
This points to wider tensions between older wealthy people and their younger counterparts. As BofA writes: “Young people show a very high willingness to commit to and support charitable causes… However, older generations show much less confidence; only 50% agree that the next generation is willing to engage in and support philanthropy.
“They are even less convinced that the next generation will be more effective at philanthropy than they are, although young people are quite confident in their abilities.”
I feel good
Sentiment among younger cohorts is also much more optimistic than among their older peers. For example, Gen Z and Millennials were twice as likely as their older peers to rate the U.S. economy as “very good” or “excellent.” While only 24% of people age 44 and older said the economy is doing well, that figure rises to 51% among younger generations.
The situation is even more divergent on a broader scale: just 6% of older respondents rate the global economy as good, compared with 46% among people aged 21 to 43.
However, on a personal level, both age groups rate their prospects quite well: 75% of people aged 21 to 43 rate their financial health as “very good” or “excellent”, and among people aged 44 and 44 this figure rises to 78%. older.
However, looking ahead, wealthy people generally have high hopes for the future. Based on three specific factors: inflation, GDP and S&P500 performance, millionaires were expecting good news across the board in the coming year.
Let’s look first at inflation (which currently at 3.3%), 42% expect a decrease, 33% expect levels to remain the same, and only 25% expect an increase.
Regarding the GDP growth rate (currently estimated at approximately +1.3%48% expected this figure to remain the same next year, 36% expected an increase and only 16% expected a decrease.
Likewise, 63% expect the S&P 500 to rise next year, 27% are betting that performance will remain the same, and only 10% expect a decline.