In the list of the richest people in the world published by Forbes magazine recently, a trend stood out: faces of unknown young people.
Many of them have not even started working or chosen their career, but they have had a lot of help to get there, because for the first time since 2009, all the billionaires under the age of 30 who appear in the classification inherited their fortune.
Of the 25 billionaires aged 33 or younger in the publication, only seven built their own wealth.
For Forbes, the massive presence of young heirs is a sign that a long-anticipated phenomenon is underway in the world of global finance: the “great wealth transfer,” a period in which much of all wealth of the world's rich will pass from one generation to the next.
It is estimated that by the end of 2029, more than US$8.8 trillion will pass from current billionaires to their young successors.
“And we are not just talking about money, but also about companies,” lawyer Yuri Freitas, a manager in the estate planning team at the Swiss bank UBS, explains to BBC Brazil.
With 15 years of experience in the area, Freitas agrees with the diagnosis that the great transfer of global wealth is already underway at an accelerated pace, and the world's billionaires are beginning to pass their wealth to the next generation at an every age. earlier time.
For Ken Costa, author of The 100 Trillion Dollar Wealth Transfer and one of the most knowledgeable voices on the phenomenon, it is clear that “never before has so much money – in real estate, land, stocks and shares – had changed so suddenly from one generation to another.”
“And never before has the next generation had such different visions about the future of the planet and capitalism compared to their predecessors,” explains the South African banker and philanthropist in an article published last year.
His main thesis, a boomer billionaire himself, is that young people, excluded from the wealth that older generations have enjoyed for so long, are disgusted with current capitalism.
What's more, they blame the boomers (born in the period 1946-1965) for destroying the planet in an unbridled race to get rich in the short term. In Costa's view, boomers made things worse because of their arrogance and resistance to change.
“The zennials [nombre que acuñó para referirse a los jóvenes millennials nacidos entre 1981 y 1996, más la Generación Z, entre 1997 y 2013] They will inherit capital resources, power and influence, and technology will be the tool they use to implement their philosophy,” he predicts.
“There is no way to escape this seismic event and, in fact, the transfer has already begun and is accelerating rapidly. And this will not happen in isolation. It will also create a ripple effect across the economy, technology and culture. What comes out of these changes depends on the new generation.”
“What I hope is that they achieve a stable and prosperous financial future, and I think it is essential that we boomers help make that happen,” says Costa.
This new wave of young billionaire heirs expected in the coming decades comes at a time in history when the concentration of income in the hands of a few families is making life worse for the majority of the world's population.
The Inequality SA report, published earlier this year by Oxfam, notes that the wealth of the world's five biggest billionaires has doubled since 2020, while that of 60% of the world's population – some 5 billion people – has decreased. in the same period.
While seven in ten of the world's largest companies have billionaires as CEOs or major shareholders, only 0.4% of the world's 1,600-plus largest and most influential companies have publicly committed to paying their workers a decent wage.
The impact of such income inequality is overwhelming, the publication highlights.
“The 2020s, which began with the Covid-19 pandemic and then saw the escalation of conflicts, the acceleration of the climate crisis and the rising cost of life, appears to be becoming a decade of division,” the document states. .
“Poverty in low-income countries is even higher than in 2019. Around the world, prices exceed wages and hundreds of millions of people are struggling,” the text warns.
Daniel Duque, researcher in the applied economics area of FGV Ibre (Brazilian Institute of Economics of the Getúlio Vargas Foundation), explains that this effort by the super-rich to transmit their heritage to future generations may be a reaction to recent initiatives in several countries. to debate and implement more progressive tax models, after decades of generous rates for billionaires.
This movement has grown, fueled mainly by the visibility given to the work of the French economist Thomas Piketty, who defends reparations in the capitalist system capable of interrupting this process of concentration of wealth.
“There is a movement in several countries in favor of greater taxation on large fortunes, which generates pressure on the super-rich to pass it on to the next generation,” says Duque.
Another debate that could put pressure on this public is the one that is taking place in the G20 around the creation of a global tax on large fortunes.
“A tax of this type would make it much more difficult for the super-rich to generate this inheritance without paying taxes. Because until then, when a tax was charged, they migrated the money elsewhere,” says the researcher.
Such concentration of income entails economic and political risks for the planet, says Duque, as well as a very unfavorable asymmetry of opportunities for those who have less money.
“One of the main risks is how to deal with such concentrated power in the hands of so few. In the past, the ability of the richest to influence politics was more limited, with less ability to act on the ins and outs of power. With high concentration, this is beginning to change and we see individuals capable of turning the tide,” he says.
As in any generational debate, professionals from all fields have tried to predict the behavior of these young heirs and the changes they will cause in the business world.
Especially banks, which risk losing customers whose wealth they have helped build and share for decades.
The new generation of billionaires is known to be more socially connected, more digital and, at least in their speech, care more than their parents about the positive impact their investments will have on the planet, both climatic and social.
A report by the consulting firm EY estimates that millennial investors are twice as willing to invest in companies or funds that seek social and environmental change.
Additionally, 17% of millennials say they want to invest in companies that adopt high-quality ESG (environmental, social and governance) practices, compared to 9% among non-millennial investors.
Can we expect billionaires to generate positive changes for the world, which suffers, among other problems, from the enormous concentration of income in the hands of a few families?
The UBS report points out that, although there are several high-profile cases of billionaire businessmen who promise to donate a large part of their fortune to philanthropy, it is less known that heirs are more reticent about this possibility.
“While more than two-thirds (68%) of first-generation billionaires stated that pursuing their philanthropic goals and making an impact on the world was the primary goal of their legacy, less than a third (32%) of generations heirs expressed the same intention,” the study notes.
In UBS's experience, successor generations are often reluctant to donate money they have not earned and, in some cases, may simply continue to invest in existing family foundations.
“However, there is a trend to invest in or manage companies in ways that address environmental and social issues, both for commercial and altruistic purposes,” the report notes.
The bank's investigation heard from some of these heirs.
“As much as my father worked in the oil, gas and mining sector, I am trying to reorient the entire business towards issues related to technology, areas that have less impact on the environment,” a billionaire from second generation.
“But I'm not going to sell all these businesses in a single day. It's a journey that I started several years ago, when I took over the family businesses,” he concluded.
*Based on the report by Ligia Guimarães for BBC News Brazil
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