What's the driving force behind the increasing wealth of younger Americans? More often than not, it's a dual income family, not a dot-com success story or a bulging stock portfolio, according to a new report from Spectrem Group, an NFO WorldGroup company. Spectrem, a Chicago-based consultant specializing in the affluent and retirement markets, reports that in 2000 there were 3.5 million U.S. households with annual income of $100,000 or more and/or net worth of $500,000 headed by someone under 40 years old. This was an increase of 40% from 1997, when there were 2.5 million young affluent households.
"Nearly three-quarters (72%) of these households had two earners," says Scott Slater, a Spectrem Director and author of the report, "Movin' on Up: A Profile of the Emerging Young Affluent." Slater says that's up from 60% in 1997. Not surprisingly, 83% of the young affluent indicate that earned income is the primary source of their wealth. Among the group, 43% said employer equity contributed to their wealth, while 55% indicate that investment returns were a source of wealth.
Despite their wealth, few of these households have a financial plan, notes Slater. "Only 21% of the young affluent have a financial plan, yet more than half think they could use one," he says. "It's clear from our research that these households benefit from planning," he adds. "Young affluent households with a financial plan have average investable assets of $210,000, more than double the $100,000 average for those without a plan."
The Young Affluent are far more likely than older affluent households to use the Internet for all types of financial activities, the report says. Over two thirds of the Young Affluent use the Internet to conduct some type of financial transaction; around half seek financial information and manage their accounts online; and nearly one third seek investment advice online.
"Movin' on Up: A Profile of the Emerging Young Affluent" is one of several new reports on affluent and retirement market topics published by Spectrem Group. The reports are available online through the company's web site (www.spectrem.com).
Spectrem Group is an innovative consulting firm specializing in the affluent and retirement markets. Spectrem integrates fact-based information with expertise in building business, marketing and M&A strategies for clients.
NFO WorldGroup is one of the world's leading providers of research-based marketing information and counsel. "Marketing minds who specialize in research"(TM), NFO has facilitated Fortune 500 clients' business decisions for more than 50 years by providing in-depth knowledge and understanding of consumers and brands through research. Their services include comprehensive counsel on market evaluation, product development, brand management, customer satisfaction, pricing, distribution and advertising effectiveness. NFO is a worldwide leader in Internet-based research and maintains one of the world's largest interactive panel communities. They are one of The Interpublic Group of Companies (NYSE: IPG), and have majority-owned operations in 40 countries. Visit NFO WorldGroup on the web (www.nfow.com).
Jeffrey Close
Spectrem Group
860.688.8821
jclose@spectrem.com
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