4 Realistic Ways Gen Z and Millennials Can Grow Their Wealth by 50% in 5 Years

Achieving financial stability and growing wealth takes time, but you can still make significant progress in just a few years with the right strategy and resources. The Center of American Progress’ analysis of Federal Reserve data found that the inflation-adjusted average wealth of households under 40 years old has increased by 49% from 2019 to 2023.

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In 2019, millennial households had an average net worth of $85,000, but in 2023, it grew to $259,000 despite inflation and record-high interest rates. This means that millennials and Gen Z Americans have seen the strongest wealth increase since the pandemic out of all other age groups. Luckily, what was done once can be done again.

Here are 4 realistic ways to grow your wealth by 50% in 5 years based on the Federal Reserve’s 2023 study.

1. Invest in Stocks and Mutual Funds

Historically, the stock market has provided higher returns compared to other investment avenues. In the past five years, the value of stocks and mutual funds rose by $31,000 for younger Americans.

Take time to learn about the stock market, different types of stocks, and mutual funds. Also, consider speaking with a financial advisor to discuss a plan based on your situation and goals. Realize that you may not need a large amount to invest so consider setting aside money each month to contribute based on your budget.

2. Reduce Debt and Increase Liquid Savings

Debt can significantly hinder your ability to accumulate wealth. In the past five years, credit card and student loan debt decreased by an average of $5,000 for younger Americans. Develop a plan to pay down your consumer debt one account at a time. Then, use the money you free up to increase your liquid savings such as for your emergency fund, sinking funds, and short-term cash.

3. Build More Equity in Your Home

If you own a home, you can make it a more powerful wealth-building tool by gaining more equity in your property over time. Making an extra payment such as bi-weekly mortgage payments will result in 13 full payments over a 12-month period.

Home improvements can also increase your home’s value along with market appreciation. In the past five years, millennials saw an average housing wealth (home value – mortgage debt) increase of $22,000.

4. Consider Starting a Profitable Side Business

If you’re interested in entering entrepreneurship and have thoroughly researched your business idea and planned for startup expenses, having a side business could also increase your level of wealth.

As the economy recovered over the past few years, small business owners saw an average wealth increase of $10,000. Of course, having a business is hard work and not the best option for everyone, but there are several ideas to look into if you are interested in pursuing that path.

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This article originally appeared on GOBankingRates.com: 4 Realistic Ways Gen Z and Millennials Can Grow Their Wealth by 50% in 5 Years

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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