Evolving Wealth Part 1: Gen Z, Trailblazers of the Digital Investment Era
Life’s tragedy is that we get old too soon and wise too late.” (Benjamin Franklin)
Born between 1997 and 2012, the youngsters of Gen Z are driving change in the investment world at lightning speed. Unlike the rest of us, they’re totally at home in a tech-driven world. For them, managing money via mobile apps and online platforms isn’t just convenient, it’s essential. Forget slow and steady approaches like retirement annuities (RAs) and unit trusts – Gen Z is all about speed, efficiency, and micro-investing.
With nothing more than a smartphone and a 5G connection, they’re fully equipped to navigate global markets, invest spare change, and even participate in crowdfunding bright ideas.
Ethical investors
Gen Z isn’t just looking for profits; they want their money to stand for something. These young investors are at the forefront of the socially responsible investing movement, putting their money where their values are. Sustainability, green energy, and ethical business practices are top priorities, and they’re not afraid to demand change.
By choosing to invest in companies that champion environmental and social causes, Gen Z is pressuring businesses to adopt better practices. Their influence goes beyond financial returns – it’s about reshaping corporate behaviour for a better and more sustainable world.
The gig economy: Gen Z’s secret weapon
Rising living costs and the desire not to be stuck behind a desk all week have seen Gen Z embrace the gig economy with a vengeance. For them, work isn’t confined to a 9-to-5. Instead, they’re Airbnb hosts and freelance providers on Upwork while also holding down a ‘conventional job’ and working digitally from cafes.
This flexibility gives them greater control over their income streams and the freedom to pursue diverse revenue sources. Micro-investing fits perfectly into this world, allowing them to put small sums of money to work for them. It’s an era of adaptability and resourcefulness, where the barriers to entry in investing are lower than ever.
But with freedom comes challenges. While the gig economy offers flexibility, it can send your work-life balance into disarray and erode traditional financial safety nets like employer-sponsored pensions and group benefits. As side gigs become main gigs, it’s essential to weigh the risks of losing core income stability.
Glass half-full
Despite these pressures, Gen Z is relentlessly optimistic about its financial future. They understand that knowledge is power and are fiercely committed to further education, constantly consuming online courses, podcasts, and articles to stay financially savvy. Their hunger for learning (and avocado toast) and their interdisciplinary mindset mean they’re pretty good at adapting to today’s ever-changing financial landscape.
Shadows on the horizon
Of course, no generation is perfect. Gen Z faces some unique challenges on their financial journey, including:
Balancing optimism with caution is crucial. Gen Z must pair their enthusiasm with a good dose of old-fashioned prudence to navigate these challenges.
The bottom line
There’s more to financial planning than just investing. As advisors, we use tech-driven strategies to our advantage. Our value is helping clients weave these modern tools into comprehensive plans that also include risk mitigation and estate planning (no matter how young you are.)
Whether you’re part of Gen Z or just intrigued about how they’re shaking things up, this generation’s innovative spirit is a wake-up call. It’s not just about keeping up with the times – it’s about redefining what wealth means for the future.
Watch this space
Stay tuned for the next article in this series, where we’ll dive into how millennials continue to evolve the financial landscape.
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