Generation Z is getting a jump start on investing. It could pay off.
Younger Americans are beginning to invest sooner than previous generations, thanks to increased access to investing and financial education, according to the latest
Modern Wealth Survey.
On average, Gen Z—generally described as those born between 1997 and 2012—began saving and investing at 19 years old, according to the survey. So-called Boomers—Americans born between 1946 and 1964—didn’t start on average until age 35.
The survey, released Wednesday, sampled 1,000 Americans ages 21 to 75, plus an additional 200 Gen Z members, on their confidence in their investing.
Although younger generations are getting an earlier start on investing, older generations see more people putting their money to work.
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Overall, 58% of those surveyed said they are investing currently, nearly three in five Americans. Gen Z had the smallest percentage of those investing today, at 45%. In comparison, 54% of Millennials (those born between 1981 and 1996) and 58% of Generation X (1965 to 1980) said they are investing. Boomers were the leaders on that front, with 63% investing.
The survey also showed increased optimism about investing: Among all ages, 60% of respondents said they feel they are in a better position to achieve their financial goals than the generations before them.
Among the main reasons for Gen Z’s increased financial confidence are easier access to investing and having more ways to invest. For instance, consumers can open stock-trading accounts and bank accounts online, or can easily invest in a low-fee exchange-traded fund.
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“This is a multidecade evolution where more and more…individual investors have access to capital markets, to stocks, bonds, cash, to build wealth,” Rob Williams, managing director of financial planning at Charles Schwab, told Barron’s in an interview. “And the accessibility and diversity of investment options has expanded greatly.”
In addition, financial advice, education, and research are at the fingertips of prospective investors. Among all ages, 51% of respondents said they feel confident about their investment strategy because financial advice and knowledge are readily available.
For Gen Z, 43% cited learning about investing at a young age.
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However, 76% of Americans said they didn’t turn to social media influencers for financial advice, reflecting some skepticism of how these platforms can help users manage their money.
“Finances are a complex place, and when you’re reacting to social media and working to try to cut through the noise, that can be very difficult,” said Williams.
The investment strategy that Americans of all ages used the most was buy and hold at 56%, with growth investing not far behind.
Write to editors@barrons.com
