The divide between Millennials: This is how the topic of finance divides an entire generation

When you watch interviews with Thomas Gottschalk, you quickly get the impression that the gap between boomers and millennials is unbridgeable. But there is also a gap within Millennials that is growing and dividing this generation. This divide has nothing to do with whether you use the gender asterisk, how you make a heart with your fingers, or whether you wear baggy or skinny jeans. It is the gap between rich and poor that separates millennials.

On the one hand there are those who don't know how they are going to pay the rising rents and on the other there are those who are having their dream house built thanks to Daddy's wallet.

Two children, a dog and a little house in the countryside – that was the formula for happiness for our parents’ generation. But for us Millennials, this formula no longer works. Millennials are often described as the first generation to be less wealthy than the generation before them. This is not because we have less desire to work, as is often portrayed. It's more because all of our money is being wasted on increasingly expensive rents and food, making it much more difficult to accumulate wealth.

Researchers from Cambridge, Berlin and Paris have found that the average millennial at the age of 35 has 30 percent less wealth than the average baby boomer at that age. Additionally, millennials are statistically more likely to work in low-paying service jobs and still live with their parents when they reach middle age.

But that doesn't affect all Millennials, because the situation is completely different for the top ten percent: According to the study, this group now has around 20 percent more wealth than the rich baby boomers of the same age. “The wealthiest Millennials have more now than ever before, while the poor are left further behind,” notes the study’s lead author, Dr. Rob Gruijters from the University of Bristol. For these top ten percent, the dream of owning their own home also comes true because they have something that everyone else lacks: the support of their parents. For 35 percent of 18 to 39 year olds, the equity to buy a house came from the family, according to the results of a survey by the real estate financing company Dr. Small.

This creates a fairly large wealth inequality between Millennials. And with it a generational conflict: young versus old becomes poor versus rich. This could become much more extreme in the future, as a study by the real estate agency Knight Frank shows: In the next 20 years, millennials will acquire wealth of more than 80 trillion euros through inheritance. This would mean that Millennials would become “the richest generation in history.” At the same time, experts refer to Millennials as the “age poverty generation” because, thanks to their poorly paid jobs, they cannot save enough for old age.

Experts are certain that this wealth gap will cause tensions within the Millennial generation. While people of a generation actually feel connected to one another, financial differences create a feeling of inequality. We can only stop this if the state intervenes in the situation, for example through taxes.

This is also what Prof. Dr. says. Anette Fasang, who worked as a co-author on the international study mentioned above: “We have to make it easier for those who are currently lagging behind to build wealth at all. A hesitant approach will not be enough. Significant action is needed to build a more equal society in which more people have the opportunity to experience some form of prosperity."