Over the next 10 to 20 years, in the wealthiest countries around the world, the ones with the most carbon intensive lifestyles, we will see the largest wealth transfer in history and, most of that money, will go to Generation Y. In the USA alone, Baby Boomers are expected to transfer $68 trillion in wealth to younger generations; for Australia it is conservatively estimated to be $3.5 trillion.
The financial sector, investor groups and business have been gearing up for some time to ensure that they benefit from this intergenerational wealth transfer. They understand that Gen Y prefers to invest in physical assets, such as real estate, gold and diamonds. Gen Y are not as active in the stock market, which is concerning the financial sector. From a business perspective, the Gen Y group on their radar are labelled HENRYs, (High Earners Not Rich Yet). While they are not yet the biggest spenders on luxury goods, they are seen as a priority for this sector, given their future potential.
In the media we are already seeing the property strategy of celebrity Gen Ys being profiled, providing the benchmarks for others to follow. So, Gen Y, as you inherit your wealth in the coming years, how you spend that money will be critical in dealing with climate change, biodiversity loss and social justice.
For those who care about the impacts of these carbon intensive lifestyles, you have to ask yourself, isn’t it time for those with bulging property portfolios to be seen as pariahs? Instead of gaining status, if they lost social status every time they added to their property portfolio, would this change their purchasing behaviour so they would do something more useful for the planet?
As a child growing up in the 1970s UK, I remember a program titled Why Don’t You (just switch off the television set and do something less boring instead). With this in mind, I say to those Gen Y expecting to come into family money in the coming years, why don’t you invest in something much less boring than mainstream property. Here are 2 ideas on how to invest differently.