5 ways Gen-Z investors can turbocharge their wealth planning (2024)

FAQs

5 ways Gen-Z investors can turbocharge their wealth planning? ›

Out of a dozen options, stocks and bonds ranked near the bottom for younger investors in terms of growth opportunities. Real estate, crypto, and private equity topped their list.

Out of a dozen options, stocks and bonds ranked near the bottom for younger investors in terms of growth opportunities. Real estate, crypto, and private equity topped their list.

Gen Z tends to engage in risky behavior less than previous generations—opting for stability and historically-sound investment rather than volatility.

The Economist adds, “The typical 25-year-old Gen Z-er has an annual household income of over $40,000, more than 50% above baby-boomers at the same age.” A Forbes piece, warming to the theme, claims, “In 2022, nearly a third of 25-year-old Americans were already homeowners, outpacing both millennials and Gen X at the ...

Key Points

Millennials (born 1981 to 1996) and members of Generation Z (born 1997 to 2012) have easier and cheaper access to the stock market and other investments than any previous generation thanks to the rise of commission-free trading and user-friendly mobile investing apps.

Diversifying your portfolio can help spread risk and potentially increase returns, providing an advantage in today's rapidly changing financial landscape. Data shows that 55% of Gen Z invest in cryptocurrencies, 41% in stocks, and 25% in NFTs. Most tend to avoid real estate avenues due to perceived high entry costs.

Innovation drives Generation Z investment preferences, with a keen interest in emerging technologies, disruptive industries and cryptocurrency. Environmental sustainability and social impact are central considerations for many Generation Z investors, influencing their investment decisions and portfolio allocations.

Major Spending Categories For Gen Z

Gen Z spending habits show they care the most about fashion, makeup and beauty products, technology, and their pets.

Diversity and Multiculturalism

They value inclusivity, diversity, and equality, and expect brands and organizations to reflect these values in their practices. Gen Z's embrace of diversity extends beyond ethnicity and encompasses gender, sexual orientation, and socioeconomic backgrounds.

Gen Zers face greater obstacles to financial success

Not only are their wages lower than their parents' earnings when they were in their 20s and 30s, but they are also carrying larger student loan balances.

Who is the parent of Gen Z? ›

Researchers and popular media use the mid-to-late 1990s as starting birth years and the early 2010s as ending birth years. Most members of Generation Z are the children of Generation X or older Millennials.

There may be another factor creating so much wealth among millennials: inheritances. In what's known as “the great wealth transfer,” baby boomers are expected to pass down between $70 trillion and $90 trillion in wealth over the next 20 years. Much of that is expected to go to their millennial children.

Through a compilation of Gen Z interviews and studies from Bain & Co, CFA Institute, EY, and others, the article concludes that the youngest generation in the workforce is motivated by competitive compensation and quick career growth, and is quick to move on to other opportunities if they don't get that.

Wealthiest Generation: Baby Boomers

According to the Federal Reserve data, baby boomers – people born between the 1946 and 1964– win the top spot for the wealthiest generation in the U.S. In aggregate, their total net worth is $78.55 trillion.

Chickens (the one who chickens out): A chicken is a stock market investor who chickens out when they see that their stocks are in the ''red''. Chickens tend to invest at random points in the market's journey, make impulsive decisions on their investments, and often end up losing more than gaining.

Meet the millennial 1%

Based on income alone, if you're under 35, you're a “top 1%” earner if your household earns more than $225,000.

When Millennials Make the 1% Mark — For Their Age Group. Consider that millennials are toward the younger end of earners, which plays a role in where they fall on the net worth continuum. “They hit the top 25% at around $50,000 and the top 1% at about $175,000,” Jennings said.

Still, over the next decade this intergenerational transfer could make millennials “the richest generation in history,” according to the annual Wealth Report by global real estate consultancy Knight Frank. These funds come at a time when millennials and Gen Zers are having a harder time making it on their own.

While the average millennial has less wealth at the age of 35 than previous generations, the top 10% of millennials have 20% more wealth than the top baby boomers at the same age.