Guide to GenZ and Millennial investors entering in the market

Guide to GenZ and Millennial investors entering in the market

GenZ and Millenials are the most financially aware generations as compared to the earlier people of their age. People from the age of 18 to 35 have numerous sources of information with which they are surrounded in their day-to-day life. From Youtube to TikTok to Instagram, all of our feeds are filled with informational content on finance, motivation, fitness, technology and what not. This generation is smart enough to make use of their smartphones not just for entertainment but for accessing information and understanding concepts as well. 

Finance-related content is at its peak right now, influencers who explain concepts of finance on the internet have got millions and millions of followers, people love them so much that a new term “Finfluencers” is now used to refer to them.

So basically, young people are interested in knowing more about the concepts of finance, investing and simply how to manage their money in a better way. But when asked in a survey,  most of the GenZ are not confident about their financial knowledge. Most of their risk taking and investing capabilities come from seeing other people make money. More than 70% of the young males in the US have invested in NFTs and Cryptocurrency, simply because they saw other people putting their money into it and becoming rich in no time. 

When asked about their knowledge about the crypto space, very few of them had at least a beginner’s knowledge about it. But, one in every 10 teenagers in the US today holds an NFT or have invested some of their money into it. 

The need of proper knowledge and guidance

Although most GenZiers and Millenials like to access knowledge through Youtube videos or social media, they are also keen to learn the concepts of finance through books, teachers, friends and their family. 

Earlier it seemed like a nightmare if a person started to talk about finance or his earnings in a public gathering, especially in India, talking about money or earning was considered a bad attitude. But GenZ and millennials feel comfortable to talk about money with their friends and family and are open to advice as well.

A proper guidance is needed when it comes to investing your money. Around 44% of GenZ have not made a single investment because they don’t know where to start. They either invest under peer pressure or do not make any investments at all.

Here are the topics that the Genz is most confused and want to know more about:

  • Credit cards
  • Debt and Borrowing 
  • Taxes and Tax returns

Most of the GenZiers and Millenials are good at two concepts of finance which is spending and saving. They would rather save their money instead of understanding complex terms like debt or credit cards. While the Genziers are more confident in taking risks by putting their money in cryptocurrency and unstable markets, the Millennials are most worried about saving money, managing debt, and planning for retirement. 1 in every 3 millennials in the US invests in cryptocurrency. 

Millennials are also found to be the most financially stressed generation of all time. Maybe it is because of the events that they have seen in their small life span. While they were learning and going to college, the financial crisis of 2008 had hit us badly. And then in 2019 while most of the Millennials were at their peak of earning money, the Covid-19 pandemic happened. Leaving them with a stressed mind who is always trying to make more money and save it for the future rather than taking a risk like investing in the crypto market. 

Understanding the markets and building goal-based and balanced investment portfolios.

So, it is very clear from the observations done on both the parts of the younger generations today, that just saving for the future or taking risks with your money just because other people are doing it are not a correct way to invest your hard-earned money. 

What should you do?

  • Understanding the market: A proper research should be done before investing into any stock or asset. This helps in understanding the logic behind why you are putting your money there and also helps you in understanding the patterns of the market. 
  • Goal based portfolios: Your financial goals can be anything that you want to achieve like wealth creation, tax saving for child’s education. Goal based investing is investing into your goals for a particular period of time. You can make your portfolio investments according to your goals as well, based on the risk factor and risk capacity of your bank account.
  • Balanced investment portfolios: Balancing the risk of your investments is a great way to manage your long and short term financial goals.

Other than watching videos, you must obtain knowledge from books, older people and people who work in the field of finance, this will help you in building more than one perspective and make better money investments.



Views expressed above are the author’s own.


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