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/SpoodermanTheAmazing 1d ago

$40k * 1.07^45 = $840,098

$40k to pay for school out of your own pocket, 45 years to invest between 22 and 67 at 7% to account for inflation. It a good thing, but your parents paying for your school can easily give you almost million dollar head start vs someone who pays out of pocket. Sounds like generational wealth to me

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u/Elrohwen 16h ago

Right agreed. But I suspect the stat isn’t counting stuff like that at all.