Gen Z is Richer than Boomers were

/// THIS WEEK

Earners,

Despite having higher household incomes and net worth than previous generations at the same age, nearly half of Gen Z feel financially insecure. Yet when you look at the wealth data, Gen Z is technically richer than Boomers or Millennials were in their 20s. This week, we’re exploring why the generation with the highest early wealth feels the poorest and what’s really happening beneath the surface.

[ INSIGHT ]

There's a fundamental disconnect between Gen Z's actual wealth and how financially secure they feel. The numbers tell one story: median net worth around $40,000, household incomes exceeding $40,000, and higher 401(k) participation than Millennials at the same age. But the lived experience tells another. Despite earning more nominally, their purchasing power has been gutted by costs rising faster than paychecks can keep up.

When Boomers were in their 20s in 1980, home prices were around 3x annual income. Rent consumed just 20-25% of paychecks, college costs under $400 yearly, and about half of 25-34 year olds headed their own households. The math simply worked. Gen X had it slightly tougher but still manageable—through the 1990s, home price-to-income ratios stayed around 3.2-3.5x, rent remained below 30% of income, and the job market still offered internal promotions and employer-funded training.

Then Millennials hit their 20s, and everything started breaking. Home price-to-income ratios climbed toward 4.0x, then the 2008 financial crisis devastated the job market. Student loan debt crossed $1 trillion by 2012. Youth unemployment peaked near 20% in 2010. Millennials became the first generation where working harder didn't reliably mean earning more.

Gen Z inherited all of Millennials' problems and then some. National home price-to-income ratios now exceed 5.5x—in major cities, far higher. Real wages have stagnated while groceries, transportation, insurance, and utilities all outpace income growth. The job market has been hollowed out by automation and AI.

Here's the paradox: Gen Z is also the most financially literate generation in history. They started investing at age 19 on average, compared to Boomers at 35 and Millennials at 25. They budget obsessively, track spending with apps, and monitor credit scores religiously. But this financial awareness amplifies the pain. They know what a healthy emergency fund looks like, the recommended savings rate, how compound interest works, and understanding the benchmarks makes it painfully clear they're falling short.

/// DATA

• Home price-to-income ratio climbed from 3x in 1980 (Boomers) to 5.5x+ today (Gen Z), with over 50% of renters now spending 30%+ of income on housing

• Gen Z median net worth (under 35): $38,000-$42,000 versus Boomers' $15,000-$25,000 at the same age. Yet nearly 50% don't feel financially secure

• Gen Z began investing at an average age of 19, versus Millennials at 25 and Boomers at 35, with 71% feeling confident in their strategy

• 35% of Gen Z earn money outside their main job, and average fund expense ratios have fallen (Vanguard’s fees have fallen to 0.07%; the lowest on record).

[ BREAKDOWN ]

Gen Z faces a vicious cycle where even nominally higher income gets consumed by costs that have exploded relative to wages. Housing, education, healthcare, and insurance are all rising faster than paychecks. High student debt levels mean less money each month for down payments, pushing back homeownership timelines indefinitely.

But here's where it gets interesting: Gen Z isn't helpless. They have advantages that previous generations never had. They learn about money, investing, and career strategy instantly through platforms like YouTube. This was knowledge that was gatekept or expensive for Boomers and Gen X. Many Gen Z adults are already in the markets, auto-investing even small amounts that compound over 40+ years.

Mobility is another edge. The old stay-in-one-company model is dead, but Gen Z is the most willing generation to chase higher income through strategic job changes. They also invest in the lowest-cost environment in history. The average expense ratios for Vanguard have fallen to 0.07% on average, versus the 1-3% Boomers routinely paid, saving hundreds of thousands in fees over a lifetime.

Income flexibility is a modern superpower. Thirty-five percent of Gen Z already earn money outside their main job through things like freelancing, tutoring, and content creation. These are income streams requiring little startup capital that scale with skill. Even an extra $200-$400 monthly meaningfully boosts savings rates.

The harsh truth is that Gen Z may feel poorer partly because they're more educated, more engaged, and more financially plugged-in than any previous generation. They're fully aware of the gap between where they are and where they believe they should be. That awareness, combined with real cost pressures, amplifies the sense of falling behind.

[ TAKEAWAY ]

Gen Z is the first generation to enter adulthood with full access to the knowledge, strategies, and digital tools needed to navigate it. Gen Z is already doing what they need to do: becoming financially literate, investing early and often, finding income streams outside corporate work, and building skillsets using online resources.

The aspect of homeownership being a luxury is unfortunate, but there's a strong financial argument for renting and investing the difference versus locking up liquidity in an overpriced property. Being nimble, investing in markets, focusing on career growth, and investing in yourself is the way forward. So while comparison creeps up constantly, the truth is Gen Z is equipping themselves to earn more throughout their lives. Despite inheriting one of the toughest economic starting points in modern history, they're building wealth earlier and more strategically than any generation before them.

Earn more and Happy New Year,

TCE

[ MONEY TIP OF THE WEEK ]

As we kick off 2026, set one automatic financial win before January ends. Whether it's auto-investing $50 per paycheck into an index fund, setting up a high-yield savings account transfer, or increasing your 401(k) contribution by just 1%, automate one money move this month. New Year's resolutions fail because they rely on willpower. Automation removes the decision entirely; you set it once in January, and it compounds all year quietly without you thinking about it.

To watch the featured episode, check out the video below: