7 Trends that Beacon the Biggest Wealth Transfer in History: Are You Ready for It?
2020 marks the beginning of a new era, setting the stage for one of the biggest wealth transfers the world has ever seen. According to Forbes.com, this massive exchange of wealth is expected to take place in the next three years.
Generally, there are three main types of wealth transfers.
- Generational transfer takes place as one generation passes away and leaves their wealth to the next generation.
- Geographical transfer happens as wealth is transferred from one geographical location to another.
- Technological transfer occurs as money shifts from one technology to another.
Do you think you’re ready for it? Do you know whether you stand to gain or lose during this historic transition? Don’t let it catch you unaware. You need to be prepared so you can safely position yourself on the winning side.
How do you do it? For starters, you need to keep up with the trends. Here are some signs that herald the dawn of the great wealth transfer.
Riches are being made off of the pandemic.
The coronavirus pandemic created some extremely unique and viable opportunities for creating massive amounts of wealth. While most businesses and the majority of the population are struggling to survive, big corporations and people who own assets managed to multiply their wealth several times over.
It is also interesting to note that despite the economic fallout, the stock market continues to thrive – a clear indication that it is not a reflection of the economy but of how big money is being positioned.
Baby boomers are passing off their wealth to the next generation.
The baby boomer generation is getting older by the day and will soon pass on their assets to their heirs. By mid-century, experts estimate that the aging generation will be transferring around $30 trillion to $70 trillion to their beneficiaries. Since most of this money is self-made, it has never been transferred before.
Additionally, the unexpected events of 2020, particularly the coronavirus pandemic, may have accelerated this great wealth transfer. Considering the fact that the members of the older generation are especially vulnerable to the virus, a lot of them may have passed away due to the disease and left their wealth to their rightful heirs.
The government is giving away free money.
Did you know that 22% of all the money in the U.S. was created this year? During a financial crisis, governments keep printing money to prop up the economy. The same is happening today in the midst of the coronavirus pandemic.
Experts predict that the Federal Reserve would have purchased about $3.5 trillion in government securities by the end of the year in an attempt to rescue the economy. Without the infusion of this newly created money, market conditions would not improve and the economy would have probably collapsed by now.
As more money is injected into the economy, banks get more money in reserve, driving down the interest rate to an all-time low and making money available to those who need it. Without these emergency measures, the markets would’ve crashed a long time ago.
However, this comes at a price. The dollar significantly loses its value as the government keeps creating them out of thin air. Moreover, the coronavirus stimulus package, a bill passed by the Congress that aims to bail out industries and small businesses and boost unemployment assistance, increased the national debt by about $2.4 trillion.
Geographical boundaries are quickly fading away.
With the advent of the Digital Revolution, companies are opening up the marketplace and providing opportunities to anyone who can deliver, no matter where they are in the world. And since everyone is coming online and have equal access to the same training and information previously reserved for people in more developed countries, wealth is continuously being transferred beyond geographical boundaries.
Moreover, as the marketplace has shifted to the cloud, big companies are heavily investing in the telecommunications industry. Where the trend goes, business follows.
New money is taking over.
Out with the old, in with the new. The pandemic hit old money with such a force that left them struggling and barely able to survive. To keep afloat, some of them were forced to sell out their assets which, under normal situations, would have been totally out of the question. Who has the money to buy these assets? Who else but the younger generation who uses modern tools and technology to keep growing their wealth.
Consumerism is a booming trend.
People love to buy things. No matter how hard life gets, the desire to buy can be overpowering. Case in point: eCommerce and marketing have experienced explosive growth in the past decade and are poised to become bigger in the coming years.
Consumerism works for the creators, not for the consumers. So, if you want to be on the receiving end and get rich in the process, choose to be a creator.
Bitcoin and blockchain are expected to be bigger than the internet.
If you think the internet is the biggest technological breakthrough we’ve had so far, you probably haven’t learned about bitcoin and blockchain technology yet. Due to the complexity of these technologies, a lot of people do not fully understand them yet but those who do have already amassed immense fortunes out of their investment.
If you find this hard to believe, take a look at these stats.
- Bitcoin is up 125% since the beginning of the year despite the pandemic.
- In January 2011, you can buy 333.33 bitcoins for $100. In April 2019, that investment would be worth $1.7 million.
- Established companies like Intel and IBM are investing in applications for blockchain technology while financial services companies are seriously considering using bitcoin.
One of the biggest wealth transfers is happening right before our eyes, and it doesn’t matter if you’re ready or not. It is bound to happen so you need to keep an eye on the trends and take the necessary actions if you don’t want to lose everything you’ve worked hard for all your life.
The Mauldin Group is an award-winning web design + digital marketing agency that does market research and competitive analysis for our clients so they can plan ahead for the future. For more articles and insights, register for our To The Top newsletter and contact us for a discovery call to get your business going in the right direction.
Alux (2020, November 15), 15 Reasons Why the Biggest Wealth Transfer in History is Happening Right Now [Video], YouTube, <https://www.youtube.com/watch?v=ggIp2k1Z8Mg>.
Gunderson. G. (2020), How to Prepare for the Greatest Wealth Transfer in History, Forbes, accessed Dec. 11, 2020, <https://www.forbes.com/sites/garrettgunderson/2020/08/20/how-to-prepare-for-the-greatest-wealth-transfer-in-history/?sh=68ab8b30322b5>.
Sergent, J. et.al. 2020, 4 Coronavirus Stimulus Packages. $2.4 Trillion in Funding, USA Today, accessed Dec. 11, 2020, <https://www.usatoday.com/in-depth/news/2020/05/08/national-debt-how-much-could-coronavirus-cost-america/3051559001/>.
Schrotenboer, B. 2020, US is Printing Money to Help Save the Economy from the COVID-19 Crisis, But Some Wonder How Far It Can Go, USA Today, accessed Dec. 11, 2020, <https://www.usatoday.com/in-depth/money/2020/05/12/coronavirushow-u-s-printing-dollars-save-economy-during-crisis-fed/3038117001/>.
Finivi n.d., How to Make Money with Blockchain [Infographic], Finivi Financial Advisors, accessed Dec. 12, 2020, <https://www.finivi.com/how-to-make-money-with-blockchain/>.