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Updates
December 8, 2024: within hours after posting the orinal note, Carl posted this note on Bluesky:
Social media comments (aka nattering nabobs of negativity) suggest some / many folks don't realize this is already occurring and will continue to snowball. Less important: a single curve. More important: the sum of the three (four?) curves). A fifth curve will start by 2048.
Simple arithmetic: 46 + 15 + 39 = $100 trillion.
Note: most folks will fixate on the yellow line after 2040. But importantly, right now, the yellow line is around $750 billion, or rounding to $1 trillion. To put that in perspective, MMFs are holding about $7 trillion. MMFs become a "holding tank" while heirs decide what to do with their cash inheritance.
Original Post
Links:
- Merrill Lynch, 2024: link here.
- Japan Times, December 6, 2024: $105 trillion. Link here.
- Bloomberg, December 5, 2024: same story as the Japan Times. Link here.
- Fortune, November 25, 2024. Paywall but note the amount, $84 trillion. Link here.
Merrill Lynch:
IT’S BEEN CALLED THE GREATEST WEALTH TRANSFER in history: $84 trillion in assets is set to change hands over the next 20 years, according to estimates by the consulting firm Cerulli Associates.
The recipients, primarily members of Generation X (those born between 1965 and 1980), millennials (1981-1996) and Gen Z (1997-2012), are expected to inherit $72 trillion of that amount, mainly from baby boomers, with the rest going to charity.
What could this historic transfer of wealth mean for the markets? That depends a lot on important decisions these heirs make as they invest all or part of their good fortune. Will they choose the same mix of stocks, bonds, cash and real estate that their boomer parents gravitated toward? Or strike out in different directions, exploring radically new investment opportunities in search of greater growth? Already, some clues are emerging: 75% of millennial and Gen Z investors surveyed for Bank of America Private Bank’s “2022 Study of Wealthy Americans” believe “it’s not possible to achieve above-average returns solely on traditional stocks and bonds.”
Hmmmm? Crypto?
Rising stock markets and home prices, as well as inflation, have fattened the estates that members of the baby boom generation, born between 1946 and 1964, are expected to leave their heirs. The latest inheritance projection by Cerulli is 45% higher than the 25-year forecast the firm made only three years ago. US gifts and inheritances are expected to total $2.5 trillion next year alone.
Three years ago? Biden was still in his first year of his presidency.
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