Gen Z & Financial Independence

17 Oct 2022

Gen Z adults (people between 18 and 25 years old right now) prove to be more financially sophisticated than any previous generation was at their age, according to The 2022 Investopedia Financial Literacy Survey

But they also have the most to learn. 

Financial Awareness 💸

More than half of Gen Z adults have already invested, and a big 26% of that group are invested in the stock market. The caveat is that only one in four feel they understand the stock market well enough to explain it to a friend. Of all financial concepts, Gen Z feel most confident about spending and saving. 

It takes a very self-aware generation to know what they don’t know. And members of Gen Z who took part in The 2022 Investopedia Financial Literacy Survey, which polled 4,000 U.S. adults via an online questionnaire, understand that they are only at the beginning of their journey to financial independence. 

Only 46% of Gen Z feel confident about their financial knowledge, for instance, which is a lower percentage than baby boomers, Gen X, and millennials who said the same. Part of the reason why could be that, in 2022, there are so many places for people to consume information—think YouTube, podcasts, and TikTok, in addition to traditional news articles. With so much information around, it can be easy to get confused and overwhelmed. 

Investing in Gen Z 📈

Fifty-four percent of Gen Z hold some kind of investment, ranging from mutual funds, ETFs, cryptocurrencies, NFTs and more. Moreover, everyone seems to be getting in on the action in some shape or form. Forty-eight percent of Gen Z women hold investments, versus 60% of Gen Z men, for instance. And in general, 45% of those earning less than $50,000 per year are investing, compared to 73% of those earning more than $50,000.

It’s no surprise that higher earners are keener investors. Multiple factors are at play here: those earning more are more likely to be in a job where financial literacy is required. Lower paying jobs are probably not going to require you to trade on the stock market… on top of this, people earning more simply have more to invest. When you have more disposable income, you’re less likely to worry about “wasting” any of it. Eg. making poor investments and losing money. 

Perhaps unsurprisingly for the generation who grew up online, emerging financial technologies are particularly popular with young people. About a quarter of Gen Z investors hold both crypto and stocks, and one in 10 own NFTs. Interestingly, men own cryptos and NFTs at a rate nearly double that of women. But despite the high interest and involvement with this market, Gen Z admits crypto is the area that causes the most confusion.

So what now? 🌟

Gen Z are growing up, and and this happens, naturally financial awareness grows. With mistakes comes learning, so if nothing else, Gen Z's willingness to take risks will carry them forward.

However, the rise of new financial products aimed at Gen Z could also help combat the confusion around investing. Apps like Quirk, for saving, Rise, for general finance education and Zeed, for investing.

We built Zeed so that young people have somewhere to learn about investing in the way they learn best - short-form video.

Unlike TikTok and YouTube, we're picky about what we show, and you only need to spend a couple of minutes on the app every day to get real value.

Get Zeed 💸