Why are super-rich Americans getting richer – and younger?

The rich are getting richer, and younger.

A survey of US investors with US$25 million or more finds their average age dropped by 11 years since 2014, to 47. These fabulously rich Americans, whose ranks have more than doubled since the depths of the Great Recession, are younger than less wealthy millionaires. The average age of those with at least US$1 million is 62, a number that has not budged in years.

The finding suggests a “vast generational transfer of wealth” is “just beginning”, said George Walper Jnr, president of the Spectrem Group, which conducted the study. The sample size was small – 185 Americans with more than US$25 million in net worth – but the findings are consistent with other economic research on the top 0.1 per cent.

Those older than 65 hold more than a third of US wealth, a number that has not risen as quickly as the share of elderly Americans in the population, University of California Berkeley economists Emmanuel Saez and Gabriel Zucman found in a 2016 paper. In fact the very wealthiest group of Americans “is actually getting younger”.

Where is this new money coming from? A new generation of millionaires and billionaires probably owe as much to inheritances as to self-made fortunes. “There may be more Mark Zuckerbergs at the top of the wealth distribution than in the 1960s, but also more Paris Hiltons,” Saez and Zucman wrote.

About 172,000 US households have a net worth of at least US$25 million, Spectrem estimated last year. That is up from 84,000 in 2008.

About nine in 10 investors younger than 38 attributed their success to “inheritance” and “family connections” in the Spectrem survey. But the same proportion also said “hard work” and “running my own business” played a role. About 70 per cent of the richest investors said they are still working.

The rise in super-wealthy young people shouldn’t be all that surprising given the recent boom in Silicon Valley.