How Rich Millennials Created a New Path to Wealth
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Millennials are finally getting rich, but their newfound wealth looks a little different than it did for baby boomers and other previous generations.

Some industries have just really pulled away from others in terms of pay. If you look at millennials who are software developers or financial analysts, those people are roughly four times as likely as any given millennial to be in their generation's top 5% of households by income. And millennial workers like Ryan Hoff say they're already feeling the effects of this tectonic shift.

It really feels as though there's a bimodal distribution, if you will, within the millennial generation of folks who are doing very, very, very well. And then folks who rightfully worked very hard, but still can't quite find ways to get ahead due to student loans, increased real estate values, interest rates and things like that.

where and when they started their careers determines so much about millennial workers and their future. We'll talk more with Ryan and with Wall Street Journal reporter Joe Pinsker about where this generation goes next. That's after the break.

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Shop Abercrombie's new long weekend collection online or in-store. Millennials aren't broke anymore. Well, some of them. The top 5% of millennial earners are doing better than even baby boomers were at similar ages. But what does that mean for everyone else? Wall Street Journal reporter Joe Pinsker joins us to talk more. Joe, you're a millennial. I'm a millennial. What's happening to us?

Although millennials have this reputation of struggling financially, they've actually in the 2020s really turned things around. Millennials are now on average wealthier, even adjusting for inflation than baby boomers and Gen Xers were. And for this latest story I was working on, I was looking at millennial high earners. And again, they're making more money than, as you said, high earning baby boomers were when they were a similar age back in 1990.

And the data in your story paints this really interesting picture because high-earning millennial households are making more, but at the same time, pay isn't growing as fast in lower-wage industries.

So what's driving the divergence there? Some industries have just really pulled away from others in terms of pay. Tech and finance and science and engineering are a few of them. If you were a millennial who had a well-paid job in one of those industries, you've likely done pretty well financially.

And based on the data analysis that my colleague Paul Overberg did for this story, if you look at millennials who are software developers or financial analysts, those people are roughly four times as likely as any given millennial to be in their generation's top 5% of households by income. That's something that immediately jumped out to me in your story. Millennial doctors and lawyers don't have the same earning power their counterparts in earlier generations did.

Why aren't these professions paying off like they used to?

To be very clear, millennial doctors and lawyers are on average still doing quite well. They're very well represented among the top 5% of earners in our generation. But the interesting change that we tracked is that a baby boomer with one of those jobs was more likely to make it into that group of top earners than a millennial doctor or a millennial lawyer was. In the case of lawyers, one important development is that there are just a lot more lawyers than there were 30, 40 years ago.

And one law professor I interviewed was talking about how a lot of millennials who didn't really know what they wanted to do with their careers and their lives ended up going to law school as a default career path. But it didn't turn out to be the sort of sure thing that people imagined it to be. You interviewed several millennial workers for this story. Are they seeing this shift play out in their own lives and the lives of their friends?

Definitely. The key idea I was pursuing for this story is just how many successful millennials have done so well because they either had the strategic insight or the good luck to end up in a thriving industry, in a thriving metro area. And as I was interviewing people, I came to think of it as almost this gravitational pull that certain industries and certain cities have had on millennials who were shooting for financial success.

And I am fascinated by the theme of what's deliberate and what's chance. And some of the people I spoke with were so deliberate, like the guy who as a middle schooler enjoyed reading companies annual reports is maybe not surprisingly working in finance now. But some of the other people I spoke with, they just drifted into these careers almost in that gravitational sense.

And it really paid off for them. And one thing that stuck out to me is just how these big shifts in the economy are changing young people's ambitions. I was talking with Lauren Rivera, who's a sociologist at Northwestern University, and

And she was saying that just anecdotally, the undergrads that she teaches there are really, really tightly focused on the three areas of banking, consulting, and tech. It's fascinating how these shifts that I was tracking in the story have this way of focusing young people's attention in a few very specific areas when they're trying to think about how to make a good life.

Another millennial worker Joe spoke to for this story is Ryan Hoff, a 35-year-old business consultant living in the San Francisco area.

Ryan said he was aware of his generation's financial reality and the accompanying pressures from a very early age. Ryan, talk me through what you were noticing and how that shaped your career plans. Growing up in a rural Rust Belt town in the 90s and early 2000s, as a kid, you started to see it. Most of the public parks were funded by the big steel companies, and they started to have less maintenance.

You started to see your friends and family struggle financially. And then when the financial crisis hit, it just felt like most folks around you were financially nervous and then would openly express their inability to find a job. Even before I started thinking about college, school, things like that, I knew I needed to get out of the area to have any opportunity to get ahead. You referenced the 2008 recession.

Millennials as a generation are in this interesting position where we're now contemplating a third recession in one generation's working life. How were those recessions impacting you and your family? Very directly. My mom, stay-at-home mom for five kids. My dad was a factory worker. My father really could only

make ends meet in a reliable way by working 50, 60 hours a week. When the hours get cut to 35, 40, you're barely scraping by. That continued right around the time I was going to college for two or three years. And so not only am I taking on the potential debt burden of looking at student loans, but I'm also

Adding a financial burden to my parents who are already struggling just by asking for the basics to pay for books, a laptop, gas to get me there.

So it was a big factor in both the bigger picture of my household, my parents and my siblings, but also for me and my future because I felt pressure to take as much burden off them as I could. And I knew continuing with school and the decision to take on debt would just make that even more stressful for them. Zooming ahead to now, what do you and your wife want for your financial future?

clear stability without stress that involves housing affordability, lack of worrying about child care. We're actually expecting our first child. And to a certain extent, one parent almost has to work a full-time job just to afford the child care to work that full-time job. And so we've made a lot of intentional decisions to create a foundation for ourselves to have the

Purchasing power to put the down payment on the home and have the money set aside so that we can make conscious decisions about our professional careers, our family lives, and not have to worry about being able to afford whatever decision it is that we make. When you talk with your friends and your peers, what do you all think is next for the millennial generation?

When I talk to most of my friends, my peers in their mid-30s, there's a lot of consternation about how will I be able to afford the home from one, a down payment, and two, with interest rates, just the monthly payments. But there's a lot of focus...

in our generation between the cohort that will not be receiving money from their parents to afford a down payment or buy home and the cohort of millennials who will. That's not necessarily discussed as much in the general zeitgeist, but between people in the privacy of their own friendship groups, that's something that actually comes up quite a bit and it's something that's on a lot of people's minds because

You feel like you're already at a disadvantage just with the run-up in real estate values, the increase in interest rates. You're effectively getting priced out of a home that you thought you could afford three, four years ago. But then there's this other feeling of, I'm going to be competing with buyers who are going to have 30, 40, 50% down payments that are coming from wealth transfers from their parents. And one of the most interesting parts of Joe's story is,

just how accessible these things are for one half of the generation and how inaccessible they are for the other half.

It really feels as though there's a bimodal distribution, if you will, within the millennial generation of folks who are doing very, very, very well and then folks who rightfully worked very hard but still can't quite find ways to get ahead due to student loans, increased real estate values, interest rates, and things like that. It weighs on your mental health.

That's WSJ reporter Joe Pinsker and Ryan Hopp, a 35-year-old business consultant from the San Francisco area. And that's it for your Money Briefing. This episode was produced by Zoe Kolkin with supervising producer Melanie Roy. I'm Julia Carpenter for The Wall Street Journal. Thanks for listening.