Generation Z (or those born between the late 1990s and early 2000s) may be the youngest adult generation, however, that doesn’t mean that investing has to wait until your typical retirement age of 65. The key to investing is starting as early as possible to build assets over long periods. Compared to older generations, Gen Z is taking advantage of the tech boom and utilizing new investing platforms to build their wealth. While some young adults are sticking to traditional stocks, some are investing in digital assets such as cryptocurrency. With the help of a financial advisor in Orlando, investing can begin at any life stage.
Read about the different ways Gen Z is investing so you can understand how this generation of investors is inspiring abundant changes in personal finance.
Cryptocurrency
Cryptocurrency, or digital currency, began as a means to decentralize government finance and create global assets that could be traded worldwide. Due to the ease of access and progressive approach to investing, many individuals in the Gen Z crowd are drawn to the virtual-first approach when investing in different coins or NFTs (non-fungible tokens). However, it’s important to remember that similar to some traditional methods of investing, cryptocurrency is extremely volatile and is still in the process of becoming regulated. While some still view crypto investments like gambling, it is possible to make large value gains through crypto, if you are ready and willing to take a risk.
Stocks
Some Gen Z adults are learning the more traditional route of investing from their parents or guardians who grew up in previous generations. Stocks, namely, are helping new investors diversify their portfolios. With growth and dividend stocks, this investment style is still the most popular for new investors with dreams of financial independence. While there have been some recent losses in the stock market, for many, this tried and true method is still a great option for those looking to learn about the basics of investing. An advisor could help you determine which stock options may be worthwhile based on your age and lifestyle.
Mutual Funds
While mutual funds are not as popular for Gen Z-ers as stocks or cryptocurrency, they are still a great way for young people to “pool” their money from previously invested securities. This could be everything from debt acquired, bonds, or stock trades. Since mutual funds are not as complicated to buy, many young people are getting mutual funds so they can compound their investments for later use in their adulthood.
Conclusion
Generation Z has seen a fair amount of financial turbulence in their young lives from the COVID-19-induced recession to the recent bear market. Despite these challenges, this generation is ready to take the leap and start planning for their lives. While some aspects of the future remain uncertain, one thing we do know is that many young adults today are ready to embrace digital investments and pave the way for not only their livelihood but the livelihood of their loved ones.