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That "80% of millionaires are first generation" stat is a bit misleading - most of those millionaires are older folk who have reached that status via retirement

That "80% of millionaires are first generation" stat is a bit misleading - most of those millionaires are older folk who have reached that status via retirement savings and the explosion in real estate. Those people are not the people being discussed here.

Mezzie 3y ago
It's also questionable how much of that will be passed on at least for Americans. My dad and step-mother are in their mid to late 60s and have ~1 million net worth but a lot of that is wrapped up in their house and retirement accounts, which will probably be taken by the state when they require care in their old age. Nursing home care will eat through all of that without blinking. There's a huge difference between 'retired with a 500k paid off house and about 1 million in net worth' and a 900 million net worth even though both are 'millionaires'.
rchaud 3y ago
...And even that is disappearing. Americans that became millionnaires by doing nothing other than chucking a bit of their paycheck into a 401K each month, are likely to have spent their working lives in a period when financial markets were growing as more and more Americans joined the labour force. The growth of your portfolio then wasn't entirely dependent on earnings and growth, like it is now. Portfolio values grew by a lot simply because more and more people were being added to pension plan contributions each month. Things were so good that pension plans used to be "defined benefit"-oriented, meaning a certain return % was guaranteed. The new generation of workers on the other hand get "Defined contribution" where the only thing guaranteed is how much of your paycheck they can take. There was an LA Times article about this that was discussed here: Article: https://archive.md/2EPal https://archive.md/2EPal HN Discussion:https://news.ycombinator.com/item?id=28140362 https://news.ycombinator.com/item?id=28140362

Mezzie 3y ago

It's also questionable how much of that will be passed on at least for Americans. My dad and step-mother are in their mid to late 60s and have ~1 million net worth but a lot of that is wrapped up in their house and retirement accounts, which will probably be taken by the state when they require care in their old age. Nursing home care will eat through all of that without blinking. There's a huge difference between 'retired with a 500k paid off house and about 1 million in net worth' and a 900 million net worth even though both are 'millionaires'.

rchaud 3y ago

...And even that is disappearing. Americans that became millionnaires by doing nothing other than chucking a bit of their paycheck into a 401K each month, are likely to have spent their working lives in a period when financial markets were growing as more and more Americans joined the labour force. The growth of your portfolio then wasn't entirely dependent on earnings and growth, like it is now. Portfolio values grew by a lot simply because more and more people were being added to pension plan contributions each month. Things were so good that pension plans used to be "defined benefit"-oriented, meaning a certain return % was guaranteed. The new generation of workers on the other hand get "Defined contribution" where the only thing guaranteed is how much of your paycheck they can take. There was an LA Times article about this that was discussed here: Article: https://archive.md/2EPal https://archive.md/2EPal HN Discussion:https://news.ycombinator.com/item?id=28140362 https://news.ycombinator.com/item?id=28140362