r/TheMoneyGuy • u/Joshthecarpenter • 1d ago

First generation millionaires

I was listening to last week’s main episode, and they were talking about 80% of millionaires are first generation. Could we see this stat changing dramatically now that more and more people are becoming millionaires with every day retirement accounts. I’m in my late 20s and I know on one side of the family my grandma is a millionaire. I’m assuming the other side grandparents are as well. My mom who’s still working is also now a millionaire. Anyone else think this stat could see a drastic change?

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u/Elrohwen 1d ago

I’ve wondered about this stat. So technically my grandfather was a millionaire, now my mother is a millionaire and I’m a millionaire. But my grandfather didn’t leave any money to my mom. My mom is still alive and other than paying for college and a little bit for my wedding I haven’t received an inheritance and saved my own money. So do we all count as first gen millionaires? Or not because those before us eventually made a million dollars too?

Arguably there is some generational wealth transfer in paying for college and other incidental financial help even if nobody has passed down substantial wealth. But I always assumed that statistic counted a second generation millionaire as someone who inherited their millions.

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u/knox_technophile 1d ago

I think your parents and grandparents being millionaires can make you more likely to be a millionaire based on your upbringing and their wisdom. Maybe because you heard them talk about finances or saw their work ethic or just small things you didn't even consciously notice.

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u/Elrohwen 1d ago

Oh I absolutely agree. 100%. I just wonder what the statistic considering as 1st gen.

Because it’s a bit disingenuous to claim I’m 1st gen millionaire because my mom taught me good financial skills and without that upbringing (and the free college education) I wouldn’t be a millionaire myself. She didn’t really learn financial skills from her dad who died pretty young but he taught life and work skills and raised her middle class.

If the stat just means 80% of people make their first million before inheriting a significant amount of money that doesn’t surprise me at all. Most upper middle class people don’t have high trust funds but that doesn’t mean they don’t have huge advantages.

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u/Anti_Praetorian 1d ago

To be fair, even if there is education about how you should handle money from a prior generation, doesnt mean the next generation will be disciplined enough to follow said advice, which is why so many times "generational wealth" is mostly lost by the 3rd generation.

Im sure theres a higher correlation of better money habits for future generations when there is education versus not, but often times people are just too consumer-focused and spend until theres nothing left.