The Greatest Generation is in the midst of transferring massive amounts of wealth to their baby boomer kids (and grandkids), the largest generational transfer of wealth in history……to date. This is happening simultaneously to the beginnings of an even larger wealth transfer from Baby Boomers to their kids which will continue for the next few decades as this generation will probably live longer. I am terming these fortunate heirs the SILVER SPOON GENERATION.
I regularly witness parents buying for their kids, sometimes on a lavish scale, but often on a more modest scale whereby parents help with home-buying’s biggest hurdle: the downpayment. This group have become a super-potent demographic of buyers especially in the high net worth individual markets, those with assets of $1 million and above. The Greatest Generation are that generation in the U.S.A that experienced the Great Depression and then fought in World War II, the generation that preceded the Baby Boomers. While many talk of the Millennials inability to be first time home buyers, the kids of wealthier Baby Boomers will be FLUSH with cash to buy a home. These Silver Spooners are cross generational, aged between 20 and 40, and will be amongst the most important luxury home buyers for the next three decades: combine them with their Millennial and Generation X and Y peers who will earn their wealth independently, and you have a potent new buying audience that will have to be catered to differently when it comes to real estate.
- About $12 trillion will be passed from the ‘Greatest Generation”, those born in 1920s-30s, to the Baby Boomers.
- The Baby Boomers will be almost triple in magnitude, transferring around $30 trillion in assets to their heirs over the next three to four decades in just the U.S.A. alone!
- There are roughly 12 million global high net worth individuals (HNWI): Their aggregate investable wealth is around $50 trillion.
- The USA is approaching four million HNWI’s with investable wealth around $13 trillion. Asia-Pacific comes second with investable assets of around $12 trillion.
We know this next generation of consumers is much more tech-savvy. We know some will possibly want to disguise the source of their wealth. We know they don’t like fees and want instant gratification. We will have to spend significant time and effort learning all their buying habits to cater appropriately to this super-potent group of ‘next’ luxury consumers. The Silver Spooners will be a potent force globally as massive wealth has been created outside of the traditional countries in the past two decades. We will have to speak a language that appeals to both the younger and older generations simultaneously, especially when we can be certain the generation providing the wealth will have a say in large purchases. Watch out for the Silver Spooners: they are here already!