Gen Z may not be able to afford a house or the cost of living now—but give it 10 years. They’re on track to gain $36 trillion and become the richest generation
Gen Z is expected to become the largest and richest economic force by 2035. According to a recent Bank of America report, the youngest generation of workers will amass over $74 trillion in income by 2040. It will be a stark—and welcome—change from their current reality of flying by the seat of their pants.
Gen Z is living the paycheck-to-paycheck twenties lifestyle—splurging on high rent costs and dishing out 99-cent ramen noodles. Yet in just a decade, they’ll be the most powerful economic force.
Only two years ago, Gen Z had amassed $9 trillion in income, but by 2030 they’re expected to have $36 trillion. And by 2040, that number rises to $74 trillion. A recent Bank of America report shows this will place them as the richest—and largest—generation by 2035, as Gen Z is expected to grow to 30% of the global population in the next decade.
Gen Z’s projected economic dominance can feel worlds away from their current economic situation. But there might be light at the end of the tunnel as they climb up the corporate ladder and take on their family’s inheritance.
Gen Z’s current economic woes: no houses and no kids
Many young people are strapped for cash, stepping out of college and into an uncertain job market. Gen Zers are having to turn down job opportunities because they can’t afford commuting expenses. They’re spoiling their pets in lieu of having children, which have become too expensive to raise, and abandoning the pipe dream of purchasing a home—unless they receive an inheritance.
Gen Z is also struggling with holding down a job. Young households receiving unemployment surged 32% year over year in February, according to the report. But it’s not for a lack of trying, despite the naysayers. The report says Gen Zers are “overeducated and underemployed,” and amid a tough white-collar labor market, unemployment for new entrants was up over 9% year over year in February. This results in Gen Z taking gigs that they may be overqualified or not the right fit for, which can have long-term career ramifications.
Yet in just 10 years, this could all flip on its head. The Bank of America report notes that wage growth for Gen Z increased by 8% year over year in February. A part of this bump can be attributed to the generation finally entering the full-time job market, leading to higher wages. But the biggest contributing factor in their financial boost is the Great Wealth Transfer, expected to hit Gen Z bank accounts in the years to come.
The great wealth transfer into the pockets of Gen Z
With the odds stacked against them, Gen Z’s best bet on living comfortably is coming into wealth.
About $84 trillion is anticipated to pass down from seniors and baby boomers to Gen X, millennials, and Gen Z by 2045, according to a 2021 report from Cerulli Associates. Most of the money will be handed over to Gen X and millennials—but 38% of Gen Z still anticipate they will receive an inheritance, according to a separate survey.
Gen Z’s share of the pie, alongside their stark wage increases, will lead to a ballooning of their economic power. Even in the current day, the young generation is a force to be reckoned with. They have higher discretionary spending habits compared to others, and their global spending is expected to reach $12.6 trillion by 2030, compared to $2.7 trillion in 2024. Their spending growth per household has also been stronger than the overall population, including both necessity and discretionary spending, according to the report.
There’s a few reasons why Gen Z spends so much of their money: They’re pouring funds into their high rents and education costs; “doom spending” on essentials and small luxuries, instead of saving up for bigger investments that feel unattainable; and trying to escape their high credit card and student loan debt.
But businesses should take note: Once Gen Zers have money to burn, they’ll be in the driver’s seat of the economy. Companies are already taking note of their preferences: luxury, e-commerce, wellness and beauty, and pets. Gen Z is also deeply invested in fintech, new media, gaming, and big tech, according to the Bank of America report. Their tastes will shape which business will thrive in 2035.
“It’s likely they will be among the most disruptive generations to economies, markets, and social systems,” the Bank of America report says. “Whether it’s due to changing diets or reduced alcohol consumption or saving and housing, Gen Z will redefine what it means to be a U.S. consumer.”
Forty years ago, a self-made millionaire, heart attack survivor, and anti-cholesterol activist by the name of Phil Sokolof went after fast-food chains for their high-fat, deep-fried foods—particularly for their use of beef tallow as a cooking oil.
Eventually, McDonald’s and other chains switched to lower-fat oils—and though they credited research, rather than Sokolof’s campaign, the gadfly ran congratulatory ads anyway.
Fast forward to today, when Sokolof, who died in 2004 at the age of 82, is likely rolling in his grave.
That’s because beef tallow is enjoying a comeback. It’s being encouraged not only by many beauty influencers, who advise rubbing the rendered fat into your skin, but by Health and Human Services Secretary Robert F. Kennedy Jr., who fried his Thanksgiving turkey in tallow, has touted its alleged health properties, and recently praised Steak ’n Shake burger chain for “RFKing the french fries” by switching back to the old-school oil.
Are there any truths to the health-based claims of those greasing the wheels for beef tallow’s revival? Below, what we know.
What is beef tallow and why are people for it?
Beef tallow is made from slowly simmering the fat surrounding cows’ organs; this separates the fat from liquid and connective tissue, allowing the solidified fat to then be collected.
Those who support its use typically do so because it is natural and because they believe it’s healthier than seed oils—canola, corn, sunflower, safflower, grapeseed, etc—which Kennedy has blamed for a rise in obesity.
The American Heart Association, though, encourages the use of seed oils, noting, “The misleading charge is that seed oils are high in omega-6 fatty acids that break down into toxins when used for cooking, causing inflammation, weakening the immune system, and contributing to chronic illnesses.” But that’s not the case, says its quoted expert, Dr. Christopher Gardner, a professor of medicine at Stanford University School of Medicine in California and a nutrition scientist at the Stanford Prevention Research Center.
While omega-3s (found in beef tallow) might be better for your health, he points out, omega-6s are not bad—and in fact constitute a polyunsaturated fat that the body needs but cannot produce by itself, and which helps the body reduce bad (LDL) cholesterol, thereby lowering the risk of heart attack and stroke.
Lisa Young, a nutritionist and an adjunct professor at NYU, told NBC News, “People are blaming the seed oils when that’s not what’s toxic. It’s the sugar and salt in the junk food that they’re using.”
Sen. Richard Lugar, R-Ind., and Phil Sokolof, President of the National Heart Savers Association, in April 1988. (Photo by Lisa Cohen/CQ Roll Call via Getty Images)
Further, Dr. Dariush Mozaffarian, a cardiologist and head of the Food is Medicine Institute at Tufts University, told NPR that “concern around seed oils is really a distraction, and we need to be focusing on the real problems,” which are overdoses of refined grains, starches, sugars, salt and other preservatives, chemical additives, and contaminants from packaging.
“Seed oils are actually the bright spot,” he said. “Seed oils are healthy fats, healthy monounsaturated, polyunsaturated fats that are really good for our bodies.
What science says about beef tallow
Beef tallow is high in—about 50%—saturated fat, which raises LDL (“bad”) cholesterol, which in turn raises the risk of heart disease. It’s why the American Heart Association advises against it, and why Physicians Committee for Responsible Medicine, a group of 17,000 doctors dedicated to saving and improving human and animal lives through plant-based diets, has issued a consumer warning about the beef tallow.
Various studies have found that replacing saturated fat with plant sources of fat has benefits against heart disease. A review in the journal Circulation, for example, looked at 13 studies with 310,602 participants and found that replacing just 5% of calories from animal-sourced saturated fat with vegetable oil, seeds, and nuts—rich in linoleic acid, which is an omega-6 fatty acid—was associated with a 9% lower risk of heart disease and a 13% lower risk of death from heart disease.
A large cohort study published in JAMA Internal Medicine earlier this month found that substituting butter—another high-in-saturated-fat animal product—with plant-based oils, particularly olive, soybean, and canola oils, may help prevent premature death from heart disease and cancer.
The National Institutes of Health, in its guide of healthy cooking oils for parents, urges the use of canola, safflower, sesame, sunflower, corn, and olive oil over all animal-based oils, including chicken fat, lard, and beef tallow—with coconut oil and palm oil, both high in saturated fats, the only plant-based options appearing lower down on the list.
On the bright side, beef tallow does contain small amounts of omega-3s, according to Cleveland Clinic, as well as “fat-soluble vitamins A, D, E, and K,” Abby Langer, a clinical nutritionist and registered dietitian told USA Today, providing benefits including improved skin, eye, teeth and bone health, plus boosted immune function. Still, there are other sources and, because of its connection to heart risk and stroke, she wouldn’t recommend tallow.
Beyond cooking, beef tallow has long been used to make soap and skincare products. But a recent large-scale review of current research around its pros and cons did not find much in the way of recommending it be slathered onto skin.
While tallow was found to offer “hydrating and moisturizing properties,” researchers found, comparative studies found that options including pumpkin seed oil and linoleic acid offered superior moisturizing benefits. Regarding research indicating tallow could be beneficial with skin conditions including dermatitis, dry skin, and psoriasis, it was concluded that more research is needed—particularly since some papers reported that tallow caused severe skin or eye irritation.
Finally, the review sought to determine whether or not beef tallow is healthy for the earth by looking into its reef-safety—something typically examined when rating sunscreens, and meaning that wearing it in oceans and having it wash off would not harm marine life.
Researchers concluded from the evidence that beef tallow is not reef-safe, writing, “This is important because some consumers prefer products that are environmentally friendly. Tallow is also an animal-derived product, and due to a rising trend through social media and increased awareness about how [personal care products] are made, many consumers now prefer products that are plant-based or considered vegan, which decreases the marketability of tallow as a skincare or cosmetic ingredient.”
They added, “Moreover, this could also indicate that tallow may have long-term effects on humans as well, which is something that needs more research.”
Berkshire Hathaway increased its stakes in Japan’s five biggest trading houses, according to a regulatory disclosure published on Monday. The investment comes as the U.S. stock market has endured a major selloff, though analysts doubt asset prices are low enough for Warren Buffett to start deploying his immense cash pile for a big purchase.
Warren Buffett’s Berkshire Hathaway is investing more money in Japan amid the recent selloff in the U.S. stock market.
The conglomerate increased its holdings in Japan’s five biggest trading houses, according to Japanese regulatory filings published on Monday.
Berkshire grew its stake in Mitsui to 9.82% from 8.09%, in Mitsubishi to 9.67% from 8.31%, in Marubeni to 9.3% from 8.3%, in Sumitomu to 9.29% from 8.23%, and in Itochu to 8.53% from 7.47%.
Buffett has likened them to them to Berkshire itself, noting they have a diverse array of investments at home and abroad.
Berkshire began building positions in the sogo shosha in 2019 and recently reached an agreement with them to gradually go beyond an earlier 10% cap on its stakes. At the end of 2024, the market value of Berkshire’s holdings in the firms totaled $23.5 billion.
In his annual letter to shareholders last month, Buffett said that “our admiration for these companies has consistently grown,” citing appropriate dividend hikes, sensible share buybacks, and compensation for top managers that’s “far less aggressive” compared to the US.
“I expect that Greg [Abel] and his eventual successors will be holding this Japanese position for many decades and that Berkshire will find other ways to work productively with the five companies in the future,” Buffett added, referring to his designated replacement as CEO.
While the additional Japanese investments were disclosed on Monday, the exact timing of the transactions is unclear, though the annual letter in late February telegraphed what was coming.
The company didn’t immediately respond to a request for comment.
In contrast, Berkshire sold a net $134 billion in equities in 2024, ending the year with a cash pile of $334.2 billion—nearly double from a year ago and more than its shrinking stock portfolio of $272 billion.
Meanwhile, U.S. stocks began nose-diving in mid-February after President Donald Trump began imposing tariffs; he has since continued rolling out more. So far, he has hit China, Canada, Mexico, steel, and aluminum with higher duties, and reciprocal tariffs are due April 2.
The Nasdaq has tumbled into correction territory, and the S&P 500 also passed the correction threshold last week but soon pared its decline to less than 10% from its peak.
That’s left investors wondering if Buffett will finally make a major purchase of stock or clinch a mega-deal for a company after complaining for years that valuations have been too high.
But analysts told Fortune earlier that a big splash is still unlikely as valuations haven’t gone down far enough, noting that Buffett usually prefers to be patient.
“He has no interest in timing the market’s bottom, nor does he chase short-term rebounds,” Armando Gonzalez, founder of AI-powered research platform Bigdata.com, said. “Instead, he waits for moments when fear drives prices to levels where the risk-reward equation tilts decisively in his favor.”
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