Does the Social Class You Were Born Into Still Impact Wealth?


One of the fundamental beliefs of the American Dream is that if you work hard, you can become wealthy.  While that is true for many of the Millionaires and Ultra-wealthy households Spectrem has interviewed over the decades, the number of households that become wealthy due to inheritance has increased substantially in recent decades. When Spectrem first began in-depth research among wealthy investors, only 8-10 percent of individuals became wealthy due to inheritance.

In a recent survey conducted with Millennial and Gen-X investors with $100,000 to $25 million of net worth (not including the value of their primary residence), Spectrem found that almost all of these wealthy investors (82 percent) identified hard work as one of the most important factors in obtaining their wealth as well as education (81 percent). This reiterates that American Dream belief, however that is where the similarities start to differ. Luck is something that nearly half of Mass Affluent investors feel contributed to their wealth accumulation, while that percentage increases among Millionaires and UHNW investors to 68 percent and 74 percent respectively. Mass Affluent investors have between $100,000 and $1 million of net worth. Millionaire investors have $1 million to $5 million of net worth while UHNW investors have over $5 million of net worth.

Family connections are often more available to those investors at higher levels of wealth, so it is not surprising that those family connections are a factor in obtaining wealth for over two thirds of Millionaires and UHNW investors. A more direct connection between older generations wealth and younger is through inheritance. Only a third of Mass Affluent investors attribute their wealth creation to inheritance, while two-thirds of Millionaires, and over three-quarters of UHNW investors indicate that inheritance was a factor in obtaining their wealth. It’s also important to note that wealthier Gen X and Millennial investors with more than $1 million of net worth are more likely to attribute “running my own business” as part of the factors in obtaining their wealth.

Working hard remains the biggest factor in obtaining wealth for wealthy investors. Where an investor comes from, and those subsequent family inheritances and connections are playing a larger and larger role in the development of wealth in this country. That does not mean that investors who do not come from wealth are not able to accumulate wealth on their own, it simply means that hard work and education may be a larger contributor to their wealth than inheritance or family connections.