Tejal Somvanshi
In a stunning reversal of financial expectations, millennials are building wealth at an unprecedented pace. Once criticized for their spending habits on items like avocado toast and iPhones, this generation has quadrupled their collective net worth from $3.9 trillion in 2019 to $16 trillion in 2024.
David Fortunato, CEO of Wealthfront, highlights what’s driving this success: “Millennials are investing with strategies that have a higher risk-adjusted return. The majority aren’t interested in risking their hard-earned money by trying to beat the market and recognize that passive investing is the best approach for long-term wealth generation.”
The Millennial Financial Comeback Story
The wealth gains span across several key categories:
- Housing: Millennial real estate holdings grew by $2.5 trillion between 2020 and 2024, with home values increasing more than 40% over five years—outpacing both Gen X (33%) and baby boomers (29%).
- Investments: Millennials are holding more equities than previous generations did at their age, contributing to faster wealth accumulation.
- Savings: Despite economic challenges, millennials are aggressive savers with significantly higher savings rates than previous generations.
- Retirement: Millennial retirement accounts have grown faster than Gen X investors—despite Gen X being closer to retirement age. This growth is attributed to both higher contributions and market appreciation.
This financial turnaround is particularly impressive considering millennials entered adulthood during the Great Recession, faced significant student loan debt, wage stagnation, an expensive housing market, a global pandemic, and high inflation.
Digital-First Payment Solutions Gaining Ground
As millennials build wealth, they’re also changing how money moves. Younger generations are increasingly adopting “pay-by-bank” solutions that allow direct payments from bank accounts to merchants, bypassing traditional card networks.
Christina Potter, head of eCommerce at Trustly, notes that merchants can save up to 50% on transaction costs compared to standard debit card charges. “We’ve seen studies where pay-by-bank actually jumps up to 81% with incentives versus 47% without incentives,” she explains.
These digital payment methods align with millennials’ and Gen Z’s priorities: speed, security, and convenience. The technology also offers practical benefits through simplified recurring payments.
“We do have consumers who are on subscription programs,” says Vivian Chang, vice president of eCommerce at GNC. “The question is, how do we make it easier every single time that they visit?”
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The Wealth Gap Within the Generation
While the overall picture is positive, millennial wealth remains highly concentrated. A significant portion of millennial wealth is held by the top tier of the generational population, according to a 2024 report from Inequality.org, which terms millennials the “most unequal generation” in the United States.
Homeownership tells part of the story. Just over half of millennials own homes, according to a 2024 analysis by The Motley Fool. Those who bought before the housing market surged likely account for much of the wealth growth.
“Older millennials, who bought into the housing market before everything got out of control, are probably driving a fair amount of this overall net worth growth,” says Matt Schulz, chief consumer finance analyst at LendingTree.
Many millennials are also turning to debt consolidation, with Money Management International reporting that millennials make up a large percentage of new debt-counseling clients. The average millennial client carries substantial unsecured debt.
The Generational Wealth Transfer on the Horizon
Looking ahead, millennials stand to inherit a substantial amount from baby boomers by 2045—potentially the largest wealth transfer in history. This inheritance will likely further accelerate their financial growth in the coming decades.
The millennial financial success story reflects both resilience and adaptation. Rather than frivolous spending, their financial habits reveal strategic investment choices, homeownership when possible, and aggressive saving despite economic headwinds.
As Fortunato concludes: “This shows how resilient millennials are, which is largely driven by challenges they’ve lived through. This resiliency, plus their commitment to investing with a long-term mindset, have helped millennials benefit from strong market appreciation over the last five years.”
