Bank of America’s 2024 Wealth Study surveyed more than 1,000 people with at least $3 million in household investable assets and found that 72% of people under the age of 43 are “skeptical” of investing exclusively in traditional assets. In contrast, only 28% of people over the age of 44 are cautious about holding all their assets in stocks and bonds.
One reason for this is that 94% of Gen Z and millennials are interested in collectibles, with watches, jewelry, and popular wines and spirits at the top of their wish lists, according to the survey. They are also interested in rare cars, antiques, sneakers, and art.
Their interest is perhaps unsurprising: After all, the soon-to-be “richest generation in history” has already demonstrated an interest in the finer things in life. A report released by Bain & Company in January predicted that by 2030, Gen Z will account for 25-30% of luxury purchases, while millennials will account for 50-55%.
Authors Claudia d’Arpizio, Federica Levato, Andrea Steiner and Joël de Montgolfier added: “Fueled by investment sentiment, jewellery’s market value is expected to reach €30 billion in 2023, establishing fine jewellery as an investment bright spot amidst uncertainty… Watches continue to thrive despite increasing polarization around a few industry winners.”
Interest in collectibles, which include items like handbags and memorabilia, declines with each generation, with 57% of Baby Boomers saying they are interested in the asset class falling to 55% of the Silent Generation.
One generation younger, Gen Xers (ages 44 to 59), 80% are interested in collectibles, but their interests are more focused on coins, jewelry and watches.
Younger wealthy people also appear to have different approaches to sharing their wealth in the future. When it comes to inherited art, Gen Z and millennials want others to enjoy it, according to the Bank of America survey: 56% of 21-43 year olds said they would keep some pieces in their own collection, 32% said they would donate one or a few pieces to a museum or private foundation, and 26% said they would share some pieces with non-art-related organizations.
By contrast, 77% of older generations said they would keep their collections for personal use, and 19% said they would donate them to a charity, foundation or museum.
This points to growing tensions between the older wealthy and younger generations: Bank of America writes: “Younger people are highly motivated to engage and support philanthropy…But older generations are much less confident, with only 50% saying they believe the next generation will be motivated to engage and support philanthropy.”
“Younger generations are fairly confident in their own abilities, but even less confident that the next generation will be more effective at philanthropy than they were.”
It feels good
Sentiments among younger generations are also much more optimistic than older generations. For example, Gen Z and Millennials are twice as likely as older generations to rate the U.S. economy as very good or excellent. While only 24% of people over the age of 44 say the economy is doing well, that number rises to 51% among younger generations.
More broadly, the picture is more different, with only 6% of older respondents rated the global economy as good, compared with 46% of those aged 21-43.
But on a personal level, both age groups feel fairly good about their prospects, with 75% of 21-43 year olds rated their financial situation as “very good” or “excellent”, rising to 78% for those 44 and over.
But looking ahead, the wealthy generally have high expectations for the future: When looking at three specific factors — inflation, GDP, and the performance of the S&P 500 — billionaires are expecting good news across the board next year.
First, looking at inflation (currently at 3.3%), 42% expect it to fall, while 33% expect it to remain at the same level. Only 25% expect inflation to rise.
Regarding GDP growth (currently estimated at around +1.3%), 48% expect it to remain the same next year, 36% expect it to increase and only 16% expect it to decrease.
Similarly, 63% expect the S&P 500 Index to rise next year, 27% expect performance levels to continue, and only 10% expect a decline.
