Gen Z And Millennial Millionaires Couldn't Care Less For Stocks And Bonds — Here's What They're Buying Instead

The younger generations don't have the patience to grow wealth the ordinary way. From alternative music and alternative cinema, millennials and Gen Z have moved on to alternative assets. And they're hoarding their way over the recommended amount. A mind-blowing 31% of their portfolios are in alternatives, which would make most financial advisors gasp for air. But are they right to do so?

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Bank of America recently surveyed 1,000 Gen Z and millennial investors with over $3 million in assets, excluding primary residence. The results were starkly different from those of their older counterparts.

A striking 72% of investors aged 21 to 43 "believe it is no longer possible to achieve above-average investment returns by investing solely in traditional stocks and bonds." In contrast, only 28% of investors over 44 share this sentiment.

And the youth isn't just talking the talk: they allocate only 28% of their portfolios to stocks, compared to 55% for older investors. Instead, they are increasingly turning to alternative investments, which makes perfect sense from their perspective. How are you supposed to believe in the stability of stocks after they've crashed twice in your lifetime? First in 2000 and then in 2008. To them, investing your savings in something that can easily go away in a split second is only worth it if it comes with greater potential gains. That's where real estate, crypto, and private equity enter the picture.

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Real Estate — A Solid Foundation

Conventional investment categories include stocks, bonds, and cash, which makes real estate an alternative asset. With the volatility of the stock market, real estate offers a tangible asset that can provide stable returns over time. It has historically been one of the most secure ways to create wealth if you have the patience to wait for five to 10 years. Real estate investments can range from residential properties to commercial real estate, and investing in them has never been easier. By the end of the day, you can become a part-owner of individual properties through fractional investing or invest in funds that can net passive income for many years in the future.

Crypto — The Digital Frontier

Another asset younger investors are bullish on is cryptocurrencies. Since the first Bitcoin was minted in 2008, the crypto market has grown exponentially, making everyone who bought thousands of the early digital coins very rich a few years later. Today, it continues to offer impressive returns, especially after wider adoption. Crypto is being increasingly used worldwide, which grants more stability and higher returns for those invested. Still, crypto markets are highly volatile, so it's important to educate yourself on the topic before you dive in. Luckily, most crypto exchanges offer free courses on what crypto is and what makes it 100x from time to time. 

Private Equity — Tapping Into High-Growth Opportunities

Investing in private equity essentially means buying shares of startups before they go public. Today, they're taking longer than ever to become tradable, which makes them particularly attractive. Add to that the AI transformation and the fact hundreds of future billion-dollar companies have less than 10 employees today, and it becomes easy to see why private equity is extremely popular. However, most private companies aren't open to regular investors. They usually only rely on VC firms, hedge funds, and angel investors. 

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