Americans under 40 saw a massive increase in wealth since 2019
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Americans under 40 saw their wealth rise by a staggering 80% since pre-pandemic — a far higher rate than any other age group, per new data from the Federal Reserve Bank of New York.
Why it matters: This is about "stonks and stimmies" — as well as the risk-taking proclivities of youth.
- In other words: During the pandemic, those under 40, many flush with stimulus checks, took to the stock market and saw big gains.
Zoom in: The big differentiator between the young and the old was in financial assets, according to the NY Fed's analysis.
- Those under 40 saw the value of their financial assets rise more than 50% from Q1 2019 to Q3 2023. Those who were 40-54 saw a 3% increase, and those over 54 saw their financial assets rise 20%.
- The under-40 crowd's share of financial assets invested in stocks and mutual funds rose by 39%, while the share for those 40-55 decreased, and for the 55+ crowd, it grew by 12%.
- Of note: The data doesn't distinguish between changes in asset allocation and changes in returns (more money gained from those investments). The results are a combination of both.
What they're saying: The shift "likely reflects the fact that younger adults, being farther away from retirement, can afford to invest in risky assets at a higher rate than older adults," the researchers write in a blog post published Wednesday.
- "The youngest age group is also the poorest and thus received much of the COVID-era fiscal stimulus, granting them excess savings to invest in equities."
- Many of these folks also didn't have to make a student loan payment for most of that period.
Meanwhile: All age groups saw gains in the value of their homes — real estate assets increased about 40%.
Reality check: Overall, the older cohort is far wealthier than the young. The net worth of those 55 and over was $97 trillion in the third quarter of 2023.
- That's compared to $8.6 trilly for Americans under 40.
- Plus: That wealth — and these wealth gains — were not distributed evenly. Plenty of younger people spent their stimulus checks right away on immediate needs.
The bottom line: If you just measure it in dollars, young adults won the pandemic.
