Are Millennials Rich or Poor? 7 Reasons No One Seems To Agree

The financial status of millennials has been a topic of heated debate in recent years. Are they struggling under the weight of student loans and high housing costs, or are they secretly amassing wealth and driving economic trends? The answer, it seems, is not so straightforward.

GOBankingRates spoke with Brandon Galici, CFP, founder of Galici Financial , and Marc Guberti, CPFC, an expert contributor with Annuity.org , to uncover why there’s so much disagreement about millennial wealth. “I love talking about millennials because I serve many of them in my business. Plus, I am one myself!” Galici said.

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Here are seven reasons no one can seem to agree on whether millennials are rich or poor .

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Wide Age Range

One of the primary reasons for the disagreement is the broad span of ages within the millennial generation. “The debate over whether millennials are rich or poor stems from the generation’s wide age range and diverse economic experiences,” Galici said.

Your age can heavily impact your wealth, so it makes sense that millennials’ wealth varies. “Older millennials, now in their early 40s, have had more time to build wealth, advance in their careers and benefit from homeownership,” Galici explained. “Younger millennials, still in their late 20s, are earlier in their career trajectories and have had less time to accumulate assets or savings.”

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Real Estate Timing

The timing of real estate purchases plays a big role in shaping millennial wealth.

Galici shared a personal example. “Many who purchased homes before recent market surges have seen significant appreciation in their property values. For example, my wife and I purchased our Southern Californian condo in August 2021, and it has appreciated by over 35%.”

This rapid appreciation creates a wealth divide even within the millennial generation. Some were able to buy houses and watch them skyrocket in value, but many missed the boat.

Economic Timing and Housing Market Challenges

The economic conditions at the start of millennials’ careers have significantly contributed to the wealth disparity within the generation as well.

“Economic timing has played an important role in shaping the perspective on millennial finances too. Older members of the generation faced the 2008 financial crisis early in their careers, while younger ones entered a more robust job market but encountered rising student debt and housing costs,” Galici said.

Guberti elaborated on this, particularly regarding homeownership: “Homeownership is a key detail in this debate that pits aspiring homebuyers at a disadvantage.”

A house was worth only 3 1/2 times the median household income in 1984, but now a house is worth almost six times the median household income, Guberti said. That stark difference means it’s harder for millennials to build wealth through real estate.

Geographic Location and Cost of Living

Where millennials live has a significant impact on their financial situation as well. “Where you live also contributes to the financial differences, with millennials in high-cost urban areas often struggling despite higher salaries, while those in more affordable regions may find it easier to build wealth,” Galici said.

This geographic disparity is further complicated by an increased cost of living — and a greater number of costs in general. “Millennials have more amenities than the baby boomer generations and the ones before it,” Guberti explained. “Streaming services, the internet and online shopping are common perks that people didn’t have in previous generations.” These are things that add up and make life more expensive for millennials than previous generations.

Diverse Career Paths

Millennials have more varied careers than any generation before them. They’ve got corporate jobs, gig economy work and entrepreneurship jobs.

Because these jobs pay very differently, some millennials are filling their bank accounts, while others are living paycheck to paycheck.

Changing Consumer Behaviors

The spending habits of millennials are changing in response to economic pressures. “Starbucks and McDonald’s are popular hubs for millennials, and both of those companies reported year-over-year revenue declines,” Guberti said.

He said he thinks this partially reflects the fact that millennials are exhausted by rising prices and are also craving healthier options, but it also says that millennials are getting pickier about how they spend their money. And how different millennials choose to spend their money impacts their wealth.

Debt and Inflation Challenges

The debate over millennial wealth is further complicated by record levels of debt and inflation. “Credit card debt hit an all-time high in the United States. That headline may suggest that millennials are poor, but record credit card debt is also due to record inflation,” Guberti said.

He added that inflation makes it easier for credit card debt to reach new high records. “However, wages haven’t kept up with inflation, which raises the concern that more millennials are falling behind on their bills,” he explained.

The slow wage growth and high inflation make it harder for millennials to build wealth. And because millennials are at various points in their careers, this can impact them and their wealth differently.

This article originally appeared on GOBankingRates.com : Are Millennials Rich or Poor? 7 Reasons No One Seems To Agree