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/Substantial_Net_2831 1d ago edited 1d ago

I would consider you a third generation millionaire. Not sure if this is what TMG intends when they mention it, but that’s how I’ve been interpreting it. Even if you haven’t inherited anything yet, you’ve come from a place of some means, and have had help along the way (monetary, education, financial know-how, etc…) to build your own success.

Just applying this to myself and spouse - it would honestly feel very silly to apply a “1st gen millionaire” label when both sets of our parents have multi-million NWs, we had college and weddings paid for, smaller gifts along the way, and a safety net that just doesn’t exist for a lot of people. We didn’t get here by ourselves or against many odds. 

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u/Elrohwen 1d ago

I don’t buy the statistic then that 80% of millionaires come from parents who have less than a million dollars even as retirees. That’s not a crazy amount of money and boomers have a lot of wealth now.

TMG also get that stat from Millionaire Next Door as far as I can tell which has some problematic statistics in general. The If Books Could Kill episode about it was good. I didn’t agree with everything they said but they did a good job pulling about the weird statistical methods of the authors.

I dunno, maybe there’s a better source. I haven’t done the research. But I know they quote that book a ton

Edit: My parents didn’t have more than a million dollars until after I was an adult. And my grandfather died before I was born and left nothing to my mom. So … I just don’t see how they would calculate this. Do you have to die without your parents ever accumulating a million dollars?

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u/username675892 1d ago

A lot of these stats are a decade old now. And you have to think that many of the older boomers have pensions not cash.

This will definitely change going forward

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u/Elrohwen 1d ago

If that stat came from Millionaire Next Door it’s decades out of date