Bloomberg reports that the age of wealthy individuals in America is declining. Investors who have at least $25 million to their name have an average age of 47 years old, an 11-point drop from 2014’s average age. However, Bloomberg remarks that the average age of individuals with at least $1 million remains at 62, as it had been throughout many years.
Sources of Wealth
For the younger segments of the society’s 1%, the sources of their wealth can vary. It is important to note that the transfer of riches from one generation to another is only starting. This means that for the younger rich individuals, wealth may have come from inheritance and even family connections. To ensure that their children and grandchildren inherit much of their wealth, older millionaires and billionaires use estate strategies, including placing their money in one or more trusts.
Aside from generational wealth transfer, a lot of these rich Americans are self-made. Some attribute their riches to hard work, whilst others give the credit to running their own businesses. It is interesting to mention that around 70% of these investors are still in the workforce.
Perhaps one of the most important factors in the increase in young millionaires and billionaires is the rise in the success in Silicon Valley. With technology enabling easy and convenient participation in venture capitalism, more and more young individuals have the means to do so.
Number of Rich Individuals Also on the Rise
Aside from the average age of wealthy Americans being on the decline, Bloomberg also notes that there is an increase in their numbers. From the dark days of the Great Recession in 2008, the number of rich Americans increased by more than twice the original figure.
Citing Spectrem Group’s study, Bloomberg states that around 172,000 households in the United States have $25 million net worth. This is a huge development when compared to the 84,000 households back in 2008.
This increase in younger individuals within the society’s 1%, as well as the increasing number of the rich, more Americans are gaining hope to reach this level of wealth.