Coming out of the pandemic, millennials are economically worse off at 35 than baby boomers with comparable careers and lives were at that age. Conversely, higher-paid millennials with upward career trajectories accumulated substantially more wealth than their boomer counterparts.

Wealth inequality is not just a divisive matter between younger and older generations. New research shows the net worth of millennials varies considerably and presents a “fundamental moral and political challenge.”

The pandemic was characterized by a K-shaped recovery, meaning the gap between the rich and poor grew wider. In the post-pandemic normal, that same K-shaped shadow may linger on to reshape an entire generation.

Millennials are not uniformly worse off than their baby boomer counterparts, but the divergence in their outcomes within their own cohort is starker.

The research conducted by students at the University of Cambridge, Humboldt University Berlin, and Sciences Po, and published in the American Journal of Sociology, analyzed the work and family life trajectories of more than 6,000 baby boomers and 6,000 millennials in the United States, examining their comparative wealth at age 35.

It found that millennials were statistically more likely to work low-paid service jobs or live with their parents as they entered middle age. Experts identified a number of issues this generation will need to tackle, and the emergence of specialist financial advisors for millennials reflects a growing awareness of this generation’s need to get back on track.

Millennial Malaise

Many factors contribute to millennial financial hardship. Many millennials came of age around the 2008 recession, and the same group entered their late 20s and early to mid-30s — an age at which many adults start families — during the COVID-19 pandemic.

Additionally, millennials’ tendency to job-hop may have cost them opportunities to accumulate wealth. Their fortunes have improved somewhat since the pandemic, doubling their total wealth from $4.55 trillion to $9.38 trillion in just over two years.

Yet the gap with their elders remains stark. As of late 2023, boomers still control almost three-quarters of the wealth of U.S. millennials, who hold merely $13 trillion of the nearly $150 trillion total.

What’s more, advisors see this wealth gap heightened by technological forces.

“The wealth disparity is increasingly apparent and is magnified due to the speed of information and the increased usage of social media,” says Terry Parham, Jr., Wealth Advisor & Owner of Innovative Wealth Building.

House of Cards

Housing affordability remains a more politically charged issue among the notable wealth discrepancies between generations.

Millennials still have a lower homeownership rate than the national average for all age groups. Data shows that those millennials who do manage to break into the market tend to be older, earn more, and are likelier to be single or childless than the boomers before them.

“It is unquestionably more difficult for millennials to achieve home ownership goals compared to older generations,” says Daniel Masuda Lehrman the founder of Masuda Lehrman Wealth.

“I advise my millennial clients to consider creative methods like house-hacking to afford homeownership, which involves either getting roommates that pay rent or buying a home with a guest house to rent out on Airbnb,” he adds.

Lehman says others will make short-term sacrifices, like living with parents, to save enough for a down payment.

“While purchasing a home is a commendable goal, it’s important to recognize that a home is both a significant asset and also a liability,” says Parham. “It’s essential to build a plan for making home ownership achievable without compromising other long-term financial goals.”

Indeed, some personal finance gurus, like Jim Collins, frequently remind followers that home ownership is not always the dream they’ve made out to be. Property remains a highly expensive, immobile, illiquid, and leveraged asset, and that combination may not suit every investor.

The Long Game

Despite feeling at odds with the American dream, experts urge discouraged millennials to hold out hope.

“Life is a journey, and it’s important not to get overly excited about being ahead or too disappointed when feeling behind,” says Parham.

He likens the role of a financial advisor to that of a sherpa. With the proper guidance, anyone who saves and invests should be able to achieve their goals.

Millennials face unique structural challenges in generating wealth in their professional lives. However, they still have time on their side, an asset that can positively impact wealth growth.

“Embracing the notion that you can ‘afford anything, but not everything’ is a cornerstone of financial empowerment,” says Arielle Tucker, founder of Connected Financial Planning. “For millennials seeking to enhance their financial future, proactive measures such as investing in education and skill-building, prioritizing savings and investments, and harnessing technology and innovation to diversify income streams are paramount.”

Improving financial literacy among millennials and practicing the basics of budgeting, investing, and saving can provide a solid foundation for making informed financial decisions. With some expert assistance, be it free online resources, courses, or setting aside dollars to cover the cost of hiring a financial advisor, millennials still have time to thrive.

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This article was produced by Media Decision and syndicated by Wealth of Geeks.