Business

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

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8 hours ago

March 17, 2025

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.”

This story was originally featured on Fortune.com

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Business

Americans see growing risk they’ll get turned down for loans

Published

1 hour ago

March 17, 2025

Jace Porter

A growing share of US consumers say they’re not seeking loans because they expect to be refused amid tight credit conditions, according to data from the Federal Reserve Bank of New York.

The share of discouraged borrowers, defined as respondents who said they needed credit but didn’t apply because they didn’t expect to get approved, climbed to 8.5% in the New York Fed’s latest Survey of Consumer Expectations. That’s the highest level since the study began in 2013.

The perceived likelihood of being rejected increased across different forms of credit, from cards to secured loans to buy homes and cars. Roughly one-third of auto loan applicants expected to get turned down, the highest share since the start of the series, while nearly half of all respondents in the February survey said it’ll be harder to get credit in a year’s time.

The data adds to a picture of increasingly fragile household finances for many Americans, as a cooling job market slows wage gains while high borrowing costs are making bills harder to pay. Delinquency rates remain low by pre-pandemic standards but they’ve been edging higher in most categories, and lenders are turning cautious.

More than four in 10 US homeowners who sought to refinance their mortgages had their applications rejected, according to the February survey, quadruple the share in October 2023.

With mortgage lending rates still much higher than a couple of years ago, many people seeking a refi are likely trying to tap equity accumulated during the recent housing boom in order to meet other debt costs or expenses, rather than to reduce their monthly payments. Inability to do so could put some under pressure to sell their homes.

Meanwhile, the share of consumers in the New York Fed survey who said they could come up with $2,000 in the event of an unexpected need declined to 63%, a new series low.

This story was originally featured on Fortune.com

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Business

Gavin Newsom is welcoming prominent conservatives on his new podcast, but critics say it’s risky to align himself ‘in a slightly unpredictable middle’

Published

2 hours ago

March 17, 2025

Jace Porter

California Gov. Gavin Newsom holds a fireside chat with Stephen Cheung, the President and Chief Executive Officer of the Los Angeles County Economic Development Corporation (LAEDC) and its subsidiary, the World Trade Center Los Angeles (WTCLA) at the 2025 Economic Forecast and Industry Outlook convening on Wednesday, Feb. 26, 2025, at the East LA College in Los Angeles.

Damian Dovarganes—AP Photo

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Business

Multimillionaire musician Will.i.am invested early in Tesla, Twitter, and OpenAI—now he’s betting on Gen Z MIT and Stanford grads for his next investment

Published

4 hours ago

March 17, 2025

Jace Porter

Will.i.am has an estimated net worth of $50 million, thanks to hit singles and solid investments in the likes of Anthropic and Pinterest. In a conversation with Fortune, he reveals where he’s investing next.

Black Eyed Peas front man Will.i.am has built a fortune off chart-topping hits like “Scream & Shout” and “Where Is the Love?” As of 2025, he’s reportedly worth around $50 million, according to Celebrity Net Worth—but it’s not just music that’s made him millions.

Beyond his success in the studio, he was an early investor in Tesla, Pinterest, and OpenAI, proving his business instincts are just as sharp as his songwriting. Now the rapper, producer, and The Voice UK judge has revealed what he’s looking for from his next investment.

“I did some pretty cool investments in the past,” Will.i.am (real name: William James Adams Jr.) told Fortune, while listing Pinterest, Dropbox, Open AI, and Anthropic as some of his smartest bets.

“I invested in Tesla in 2006, before Elon [Musk] took over the company, and he’s done great, taking it to where it is. Hopefully, he can figure out a way to get it back to its glory,” he added. “I invested in Twitter early on. When Jack [Dorsey] left, I sold it. Made good there.”

So, what’s Will.i.am looking for in his next investment? “I’m hunting for what they call large concept models,” the 50-year-old Grammy Award–winning artist revealed.

“Right now, we’re in large language models, but they’re not concepts. It’s just language—they’re just regurgitating our imagination and our concepts,” he explained.

“Around the corner, someone’s going to build large concept models. So you want to hunt for that. You want to hunt for the people that are out there doing that. They’re students right now, they’re at MIT, they’re at Stanford. They’re young kids, and they’re native to this. So you want to hunt for that. That’s the only thing I’m focused on.”

Will.i.am has a long history as a futurist and tech entrepreneur. In 2011, Intel named him its “director of creative innovation.” His startup, i.am+, raised $117 million in 2017. Now, Will.i.am has set his sights on AI. He most recently founded FYI—an AI-driven productivity and communication platform for creatives—where he serves as CEO.

Will.i.am was speaking to Fortune in Rome for the rollout of Raidio.FYI radios in Mercedes-Benz cars.

Will.i.am’s biggest investment mistake

For all his successes, there’s one missed opportunity that still haunts Will.i.am: declining to invest in Airbnb when he had the chance.

Its founder Brian Chesky approached the rapper in the company’s early days with an opportunity to invest up to $200,000 in a fundraising round, but Will.i.am was skeptical.

“When you travel and you have success, you get used to the best hotels, the best service, right? So sometimes, when you’re used to the best, and you’re used to being pampered by the best, that could cripple you because when new experiences come, like Airbnb, you’re gonna base it off of the best,” he explained.

“You’re gonna say, hey, so you guys have concierge, and he’s gonna say, no. That ain’t gonna work. So you guys have room service? No. That ain’t gonna work. So I was tunnel vision and pampered by luxury.”

Airbnb went on to have one of the most successful IPOs in history in December 2020. Had he taken Chesky up on the offer, Will.i.am’s $200,000 stake could be worth millions of dollars today.

This story was originally featured on Fortune.com

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