Gen Z outpaces older generations with earlier jump into investing: Report
A growing number of Gen Z adults are stepping into the world of investing earlier than the generations before them, with nearly one-third building portfolios at college age, compared to just 15% of millennials, 9% of Gen Xers and 6% of baby boomers who did the same.
According to a new report by the World Economic Forum, the digital-savvy generation is reshaping the landscape of personal finance even before reaching full adulthood.
"By the time they enter the workforce, 86% of Gen Z have learned about personal investing versus 47% of Boomers, underscoring a generational transformation in financial habits," the findings read.
But younger Americans are flipping the script on investing in other ways – with zoomers and millennials expressing a willingness to accept artificial intelligence-enabled financial advice.
The data, gathered in tandem with Robinhood Markets and Boston Consulting Group, showed a stark comparison between zoomers and their baby boomer grandparents – with 41% of the youngest age group expressing a willingness to accept financial advice from AI-powered sources compared to 14% of baby boomers willing to do the same.
Take into consideration the ongoing struggle to experience the same adulthood rites of passage in the same timeframes – a concern for both Gen Z and millennials as they think about buying homes, starting families, crawling out of college debt or positioning themselves for a decent retirement down the line.
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Natalya Guseva, Head of Financial Markets and Resilience at the World Economic Forum, said the younger generations exhibit a growing interest in investing to "build wealth and enhance their financial stability" at an early age.
"Given this sustained shift in investment demographics, it is critical for leaders to reassess the retail investing landscape and ensure individual investors are equipped with the right financial education and investing tools that support their financial goals," she added.
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According to Financial Times, the uptick in investing is traceable to financial apps that put more opportunities at young adults' fingertips than ever before – with apps like Robinhood, Wealthfront, SoFi and more.
At the same time, the outlet reported a widespread interest in investing in cryptocurrency as beginning investors' first move, and it's making some groups – like the UK’s Financial Conduct Authority – concerned that these investors could potentially lose all their money.