Over Half of Gen Z Invests: Here’s What They’re Investing Their Money In

A new study from GOBankingRates offers good news for anyone worried about Gen Z’s commitment to their financial future. Although younger adults are somewhat less likely to invest their money than millennials, Gen Z are investing in nearly equal percentages of middle-aged adults between 45 and 54 — and they’re actually more likely to invest than older Americans 55 and up.

The future of finance: Generation Z and their relationship with money
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The study, which surveyed more than 1,000 American adults, found that 43% of Gen Zers (18-24) are not yet investing. That means 57% are, which might shock those who stereotype the younger generation as irresponsible and myopic.

What’s even more shocking, however, is what they invest — and don’t make — their money in as they grow.

Expect. Yes to real estate, but no to crypto?

The most striking revelation from the study is that only about 11% of investing Gen Zers invest their money in cryptocurrency. Twice as many, about 22%, invest in stocks and about 14% to 16% invest in 401(k)s or IRAs and mutual funds or ETFs. In fact, the only category that attracts fewer young adults than crypto is the 5% who get into collectibles.

Remarkably, the vast majority — just over 24% — invest in real estate.

So how come Gen Z shuns cryptocurrency — which is almost universally associated with young, tech-savvy risk takers — but flocks to real estate, which has always been the domain of mature investors? and stable with assets, income and credit?

As it turns out, assumptions about Gen Z rarely match reality.

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Gen Z missed Tech’s training phase

George Sinis is a lifelong IT professional and crypto trader who owns an educational crypto and financial media company called BuyCryptoSafety.

In his experience, the common assumption that the youngest adults are the biggest crypto fans is simply not based in reality. Today’s 20-year-olds were seven years old when Bitcoin debuted in 2009 — their concept of how we got here is purely academic. Older sets, on the other hand, watched it evolve in real time.

“Older generations, especially us millennials, have had to go through all phases of the internet and technology,” Sinis said. “Before forums, blogs, and social media, we had to figure it all out ourselves, which made us pretty tech-savvy. On the other hand, whenever I give a crypto presentation to a Gen Z audience, the most common complaint I get is that they find crypto too confusing and don’t have the patience to learn how. everything is working. My experience shows that Generation Z is very good at managing social media, but their technical knowledge does not extend beyond that. That’s why they choose a simpler investment model like real estate. Over time, I think we will see a large influx of Gen Z investors into the crypto market as they become more confident and mature.

But they also missed the Great Recession

Sinis’ thesis – that Gen Z shuns crypto until they better understand the technological evolution that spawned it – is certainly valid. But keep in mind that his point of view is that of a blockchain specialist.

Brian Davis, founder of Sparks Rentalalso believes that a lack of pre-2009 context is driving the momentum, but he views the issue through the lens of a real estate professional.

“Those stats make sense when you think about it,” Davis said. “Gen Z was very young during the last housing crash in 2008, and it probably didn’t impress them much. All they have seen is that the value of real estate has skyrocketed since then. But they have been old enough to see the wild volatility of cryptocurrency, and either they know someone or they themselves have lost money on crypto at some point in the last few years.

Or, the study results might only tell part of the story.

John Frigo, a Gen Zer and investor who works as a marketing analyst at BestPriceNutrition.comshows a healthy dose of something else his generation is known for: skepticism.

“I wouldn’t agree with the idea of ​​most of my peers investing in real estate, let alone stocks and crypto,” Frigo said.

“Here’s the thing. It is very easy to invest in crypto. Anyone with a Robinhood account, Cashapp account, etc. can throw $20 into crypto, while very few people my age have the means, credit, or work history to be able to buy real estate. I think a lot of my peers are intrigued by real estate and want to be real estate investors or landlords down the road. But it’s not as prevalent as crypto or stocks, where someone can invest as little as $5 with just a few taps on an app they already own, instead of having to save money. and obtain financing to purchase real estate.

Frigo makes valid points – so how can these points be reconciled with the study results? Several experts offered explanations that might fill the gaps. Frigo mentions owners, credit, work history and down payments. But maybe the Gen Zers who claimed to be real estate investors aren’t reversing foreclosures or buying properties. Perhaps they invest in partial shares of REITs or REIT TEFs, which anyone with a no-fee brokerage account can buy with as little as $1. Or maybe they invest through real estate fraction crowdsourcing platforms like Concreit, which are also cheap and accessible.

On the other hand, many of those same young adults who seem to be avoiding crypto might have invested in digital currencies in 2021 when the market was hot, but sold their stocks in a panic as the crypto winter of this year dwindled their modest holdings before they participated in the survey.

The thing is, Frigo’s sonic logic doesn’t have to be wrong for the study to be good, or vice versa. Whatever the cause, one thing is certain: Gen Z really wants to make their money work.

More from GOBankingRates

Methodology: GOBankingRates surveyed 1,004 Americans ages 18 and older nationwide between July 21 and July 24, 2022, asking six different questions: (1) Where did you learn about personal finance? ; (2) What is the overall amount of debt you currently have? (including student loan debt); (3) How much of your monthly income do you spend on rent/housing? ; (4) What is your opinion on the remote work/work from home policies at your current or future employer? ; (5) Do you invest your money? If so, what are you investing in? Select everything related to it; and (6) What minimum wage would you need to earn to be happy? GOBankingRates used PureSpectrum’s survey platform to conduct the survey.