Not a million. Not a billion. Not a trillion.
$100 trillion.
That’s how much will be inherited over the next two decades.
Today we’ll look at what the heirs to this fortune plan to do with it…
And why you should do the same.
The Great Wealth Transfer
Over the next twenty years, $100 trillion will be passed down from older to younger generations. It’s called the Great Wealth Transfer, and it’s the largest in history.
Where will all this money go?
Some of it will be spent on fancy cars and vacation homes.
But a large chunk of it will wind up being invested — in particular, into private startups.
Let me explain…
Looking for Something Different
The wealth transfer will benefit investors from every generation.
For example, as you can see in the below chart, Baby Boomers will inherit an estimated $5.5 trillion, while Gen Xers will receive $39 trillion.
But the youngest two groups, Millenials and Gen Zers, are expected to get more than $60 trillion. And these investors plan to do things a little, let’s say, differently.
As Kartik Ramakishnan, CEO of financial services at Capgemini, told CNBC, “What [the younger] generation looks for is different from what previous generations have looked for.”
Let’s see what they’re looking for…
Then we’ll explore why you might consider joining them.
The Three Priorities of Younger Investors
As this CNBC report explains, here’s what younger investors are looking for.
1. Embracing Risk
For starters, younger investors are embracing risk. As Ramakrishnan explained, “It’s a combination of both age, risk propensity and awareness, It’s the ability to find out more, to learn more, to get better knowledge of how they could invest.”
Essentially, they’re comfortable taking risk to get a shot at making greater returns.
2. Digital Access
Young investors are digital natives. They don’t want in-person meetings or phone calls.
Instead, according to Capgemini, they want “nuggets of information” they can quickly consume online, and they want “intuitive tools for decision making.”
3. Alternatives to Stocks and Bonds
Perhaps surprisingly, Capgemini found that younger investors have similar beliefs to our team at Crowdability: that “strong returns can no longer be driven by just stocks and bonds, and that private equity and other alternatives can provide better long-term growth.”
And they’re particularly interested in private equity — including private startups!
Startups Are the Answer
It makes sense that this generation plans to lean into startup investing.
Startups are indeed riskier than stocks or bonds. But with this greater risk comes greater profit potential. Over the last twenty-five years, annual startup returns have averaged about 55%. That’s six, seven, eight times higher than the returns from stocks.
As I wrote about here, even allocating a tiny fraction of your investment capital to alternatives like startups can potentially double your portfolio.
Furthermore, thanks to new investment platforms like StartEngine and Republic, investors can get access to an almost unlimited number of startup opportunities. And thanks to platforms like Crowdability, they have access to easily-consumable education, information, and tools.
Here’s the Best Part
But you don’t need to be an heir to a fortune to invest like one.
Nowadays, anyone can invest in startups, often starting with just $100 or so.
We launched Crowdability more than a decade ago to help every investor, young or old, invest in startups so they can minimize their risk and maximize their profits.
So keep on reading — and set yourself up for a Great Wealth Transfer of your own!
Happy investing.
Best Regards,
Editor
Crowdability.com
