Since Gen Z is the youngest generation, only some members who are above the age of 25 are getting started with investing. In fact, 34% of Gen Z don’t invest at all. This is because most of them are entering their first jobs while others are still in school.
Recent surveys show that Gen Z invests mainly in three areas: Stocks, real estate, and cryptocurrency.
It’s interesting to note that 19% are investing in real estate; usually, only people in an older age category would be able to invest in real estate as it requires large down payments and high income; however, today, many real estate investment trusts, crowdfunding platforms, and new avenues have made it possible for many who might be traditionally ineligible for a loan or not have the capacity to invest in real estate.
Others, nearly 11% invest in collectibles, 12.5% own mutual funds or exchange-traded funds (ETFs). About 17% are investing in an IRA or 401(k) plan. What is hard to believe is that 12.9% of Gen Zers confess that they aren’t sure what they are investing in.
How does Gen Z learn how to manage its finances?
It’s found in recent surveys that 22.7% got informal lessons from their parents or family. More than 38.8% claim that the main source of financial education is YouTube, Twitter, TikTok, and Instagram. Another 7.6% do some research on their own or get help from Reddit. Only 17.6% got financial education from a formal source like a financial expert. This would probably be because Gen Z makes and consume too much information on the internet.
However, as anyone can post something on the internet, it is improbable that the quality of the lessons is sufficient. This could also be why almost 13% of Gen Zers don’t know what they were invested in.
Does Gen Z have debt?
Some recent studies show Gen Zers have taken on a lot more debt to finance their investments than other generations.
However, 34.3% have no debt at all. 3.5% have a debt of $75,000 or more, and 15.5% have a debt of $25,000 or more. Overall, men have more debt than women.
Work-life balance is the top priority, with 24.8% of Gen Zers affirming that they would turn down a tiring job with more pay. Another 19.6% of people believe getting a career in the domain they like is essential. Only 16.5% think money is the most important element they were looking for in a job. Men prioritize pay and performance bonuses, and women value work-life balance and management values in the company.
Gen Zers spend most of their money on food, besides rent. Only 15.9% save or invest most of the money. Other significant expenses are entertainment, clothing, credit card bills, student loan payments, and car-related expenses. Surveys show that women spend more money on food and other expenses while men prefer saving or investing, spending on entertainment, and using a credit card. Moreover, nearly 50% of Gen Z have always lived with their parents or at least moved back to live with them during the covid-19 pandemic — this saves them a lot of money.