7/08/24
Gen Z and Investing: A New Wave Of Finance
Author: Abhilash Kaylan
Editor(s): David Sun
Generation Z, commonly abbreviated as Gen Z, born between 1997 and 2012, is making significant strides in finance. Gen Z is known for their superior knowledge in technology-related aspects of life compared to previous generations. As a result, in a world of ever-increasing toughness to stay afloat financially, Gen Z is taking it by storm. The article “Gen Z and Investing: Social Media, Crypto, FOMO, and Family” by the Finra Foundation describes it all. Here are the key points:
A study showed that around 56% of U.S Gen Z individuals own investments. In Canada, 74% of Gen Z individuals own investments, with a sizable portion of Chinese and U.K. Gen Z individuals also owning investments: 57% and 49%, respectively. U.S. Gen Z individuals' desire to own Cryptocurrency, also known as Crypto, is fierce—19% of all Gen Z individuals with investments own Crypto and Crypto only.
Individual stocks and mutual funds participation is significantly lower than Cryptocurrency participation, having 41% and 35% participation rates, respectively. Studies show slightly older men from higher-income households (> $75,000 annually) are the primary investors, with women and people of color investing far less.
Gen Z investors, just like the rest of Gen Z, are faced with the seemingly impossible task of planning for the long term, saving for retirement, and much more. However, they tend to live less paycheck-to-paycheck and lead more balanced financial lives than non-investors.
Gen Z investors also tend to use more resources to learn about finances than their counterparts, who mostly rely on family and friends for guidance. These investors, on the other hand, rely on social media and the internet for financial advice.
Unlike the U.S.A. and Canada, which have investors who are inclined to learn finance, Gen Z individuals in the U.K. usually tend to have the goal of home ownership, with Gen Z in China instead wanting to travel.
Gen Z’s investing approach is shifting financial markets by the day with its unique methods of gaining information and decisions. The market is ever-growing, so it is never too late to join. As the thriving generation continues to gain knowledge, the world could be affected positively for generations to come.