Generation Z (Gen Z), the youngest generation of adults, are already big on investing. Nevertheless, they don’t necessarily seem to be conforming to the same trends and values as their predecessors. This article will look at the behaviour and habits of Gen Z in the investment world.

What sets gen z apart from other generations?

It is important to understand the social factors that set Gen Z apart. They are a young, tech-savvy and politically-minded generation. They are the first generation to grow up with smartphones and portable digital technology, meaning that they came of age with iPhones, social media, and online money-managing applications. This factor means they grew up with easier and faster passage to online investment platforms, have access to information and financial education at the click of a button and are socially much more connected to one another than previous generations were. Social media is the leading source for Gen Z regarding financial education, especially through sites such as YouTube, TikTok and Instagram. When compared to other generations they are much less likely to go to financial professionals and advisors.

They are also the most educated and politically-minded generation so far. According to Pew Research, they have the highest level of university enrolment among 18–21-year-olds at 57%, compared to 52% for millennials and 43% for Gen X. They are also most likely to have university-educated parents. They are a major force politically, for example through movements such as March for our Lives, Black Lives Matter, or Fridays for Future etc. This factor has started to have an impact on the content of the investments, with 90% of Gen-Z individuals believing that companies have a duty to address environmental and social concerns. This hasn’t fully translated into their investment habits, however, with only 25% owning ESG investments.

Finally, this generation came of age with the pandemic. Until the onset of the virus, Gen Z was set to inherit a financially stable economy, with relatively low unemployment. However, everything changed during the pandemic, with financial turmoil, recessions and a huge increase in unemployment. Because of this, many more people feel financially insecure leading them to look towards investing as a potential way to make quick money. Most people in this generation won’t have any pensions or saving’s accounts, leaving them feeling especially financially insecure at a time of rising costs.

What are they investing in?

The stock market still remains the most popular choice, with 73% of Gen Z owning stocks according to Nasdaq. As well as this, other traditional investment structures are similarly popular, with 15% using ETFs, 30% owning bonds and 22% buying index funds. There are, however, a number of new trends. Generation Z is a generation raised with portable digital technology and social media. This means that an especially popular investment option is cryptocurrency, with 47% own crypto stocks. Crypto is a common introductory avenue, with more than two fifths of Gen Z starting their investment journeys with cryptocurrencies, compared to 35% of millennials.

Why are they investing?

There are a number of factors driving Gen-Z. Many of them tend to be similar to previous generations, for instance curiosity, which is the most common factor in Canada, or advice from parents and family members. Nevertheless, there are some new developments. The biggest reason, according to the CFA, is the ability to start investing with small amounts of money. This is interesting as for previous generations the question of prior wealth has often been a hindrance to potential investors. According to Wealthify, the average person thinks they need around £41,000 to be able to start investing. Nevertheless, this isn’t true, as you can start investing with as little as £1, a fact to which Gen Z appear much more switched on to. It is very likely that more access to social media and immersion in financial education through YouTube and TikTok has led to Gen Z feeling more comfortable starting to invest with smaller amounts of money.

Another especially interesting driver is a fear of missing out (FOMO). This is most common in relation to cryptocurrency. This is driven through social media and online trends, often regarding newer platforms and investment opportunities such as cryptocurrencies. FOMO has also led to increased risk-taking regarding investments.

In terms of gen z’s long-term goals, there are a lot of similarities between countries. The most common goals were having enough money to go on holiday and travel, retaining some financial security and being able to pay bills and living expenses, and saving for retirement. These trends seemed to be similar in the US, China, Canada, and the UK, except for one exception in the UK. While travel seemed to be the leading factor in the other three countries, the biggest motivation for young Brits was buying a home.


Thus, to conclude, generation Z is already hot on investing. They appear driven and willing to take risks, while looking to secure money for their future. While there does seem to be more risk-taking and more interest in more novel, less secure investments such as crypto, the overall trend of interest by the youngest and biggest generation is an exciting and promising prospect for the future.

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