GenZ and Millennial Investors’ Guide to Entering the Market

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Uday Deb
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Gen Z and Millennials are the most financially conscious generation compared to their peers. People between the ages of 18 and 35 have numerous sources of information in their daily lives. From Youtube to TikTok to Instagram, all of our feeds are filled with informative content about finance, motivation, fitness, technology, and more. This generation is smart enough to not only use smartphones for entertainment, but also to access information and understand concepts.

Finance related content is at its peak right now, influencers explaining financial concepts on the internet have gained millions of followers and people like them so much that a new term is now used to refer to them as “financial influencers” .

So basically, young people are interested in learning more about finance, the concept of investing, and how to manage their money in a better way.But when asked in the survey, the majority of Gen Z are not confident in their financial literacy. Much of their risk-taking and investing ability comes from seeing other people make money. Over 70% of young men in the U.S. have invested in NFTs and cryptocurrencies simply because they saw other people put their money into them and get rich quickly.

When asked what they know about the crypto space, very few of them have at least beginner knowledge. However, today 1 in 10 teens in the US holds NFTs or has invested some of their funds in them.

Appropriate knowledge and guidance required

While most GenZiers and Millennials prefer to acquire knowledge through Youtube videos or social media, they are also keen to learn financial concepts through books, teachers, friends and family.

Earlier, if one started talking about finances or his income in public gatherings, it seemed like a nightmare, especially in India where talking about money or income is considered a bad attitude. But Gen Z and millennials are happy to talk money with friends and family, and are open to advice.

Proper guidance is required when investing. About 44% of Gen Z are not making any investments because they don’t know where to start. They either invest under peer pressure, or they don’t invest at all.

Here are the topics Genz is most confused about and wants to learn more about:

  • credit card
  • Debt and Borrowing
  • Taxes and Tax Returns

Most GenZiers and Millenials are good at the two financial concepts of spending and saving. They’d rather save money than understand complicated terms like debt or credit cards. While Genziers are more confident in taking risks by putting their money into cryptocurrencies and volatile markets, millennials are most concerned about saving money, managing debt and planning for retirement. 1 in 3 millennials in the US invests in cryptocurrencies.

Millennials have also been found to be the most economically stressed generation of all time. Maybe because of the events they saw in their little lives. While they were studying and going to college, the 2008 financial crisis hit us hard. Then in 2019, when most millennials were at their peak of making money, the Covid-19 pandemic happened. Makes them feel stressed, they are always trying to make more money and save for the future instead of taking risks like investing in the cryptocurrency market.

Understand the market and build a balanced, goal-based portfolio.

So it’s clear from today’s observations of the younger generation that simply saving for the future or risking your money just because someone else is doing it is not the right way to invest your hard-earned money.

what should you do?

  • Know the Market: Proper research should be done before investing in any stock or asset. This helps to understand the logic of why you put your money there, and it also helps you understand the patterns of the market.
  • Goal-Based Portfolio: Your financial goals can be anything you want to achieve, such as wealth creation, tax savings for your children’s education. Goal-based investing is investing in your goals for a specific period of time. You can also invest in a portfolio based on your goals and the risk factors and risk tolerance of your bank account.
  • Balance your portfolio: Balancing your investment risk is a great way to manage your long- and short-term financial goals.

In addition to watching videos, you must gain knowledge from books, seniors, and people working in the financial field, which will help you develop multiple perspectives and make better money investments.

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Disclaimer

The views expressed above are the author’s own.

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Disclaimer

Views expressed above are the author’s own.

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