March 2023
Over the next decade there’s going to be a historic shift in wealth from one generation to another; as much as $84 trillion between now and 2045 will change hands. The source of much of that wealth will come from high-net worth Baby Boomers—although their parents, the Silent Generation, still have over $15 trillion left to give. This, among other interesting viewpoints on wealth, was uncovered in the 2022 Bank of America Private Bank Study of Wealthy Americans. The findings reflect the responses of 1,052 people aged 21 or older, with household investable assets over $3 million. The survey and its findings highlight the evolving approach to investing and the gaps in conversation that are still happening among individuals, their families, and their advisors.
Here are a few key stats we found interesting from the study:
- 51% of wealthy individuals think their children aren’t ready to handle their wealth inherited.
- 27 is the average age when individuals talk about estate planning with their children and only about 68% of the individuals surveyed have these conversations.
- There’s a lack of confidence in traditional investments that is inspiring the use of alternatives (real estate, emerging markets and crypto, for example) and 75% of young investors say it’s impossible to achieve above-average returns solely with traditional stocks and bonds.
- 31% say real estate investments offer the greatest opportunity for growth, and real estate is ranked highest among age groups 21-42 and 43+. The only other opportunity considered higher overall, at 39%, was domestic equities.
- Tax planning is a top financial issue and still a conversation gap for most discussions with advisors; 80%+ said they’d want to talk more to their advisor about this issue.
Reading this study and understanding the perspectives about money and wealth made us think of potential issues for our investors and our own wealth journey with our children and the generations to follow. During our careers we have experienced the Gulf War, the dot com crash, 9/11, the Great Recession, the first pandemic since 1918, and war in Ukraine. Having witnessed the financial fallout from these events in the stock market, we have used our resources and expertise to pursue alternative investments. With the right mindset, planning, and execution, we believe it is possible to create generational wealth that can benefit your family for generations to come. Value-add multifamily real estate consistently surfaced as among the most resilient, risk adjusted returns of any asset class – driven by the benefits of cash flow, appreciation, tax benefits and diversification not found in most competing asset classes. Even during these turbulent times, we believe multifamily continues to provide a way for us and our investors to build a legacy of financial stability and security for our families.
Grateful to have you on this journey with us.
