Gen Z Seeking Investments that Align with their Values, but Unsure How to Begin Investing, U.S. Bank Survey Finds
- Gen Zers prioritize social impact over high returns, potentially leading to a shift in investment trends.
- Over 75% of young investors are influenced by social media, indicating its growing influence in investment decisions.
- Investors feeling overwhelmed and more pessimistic than last year may lead to decreased market activity and reduced investment confidence.
- Gen Zers view wealth differently than older generations, will sacrifice returns to invest in causes they believe in
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More than
75% of young investors say social media makes investing look easy - Half of all investors feel overwhelmed, more pessimistic than last year
Members of this generation, who range in age from 18 to 26, are overwhelmed by recent economic news, are unsure how to start investing, compare their financial progress to others – including their parents, people they see on social media, and people better off than they are – and are highly motivated by experiences and the pursuit of personal interests and opportunities. Members of the Millennial generation, aged 27-42, share many of these same feelings.
“Younger generations are dealing with inflation, high interest rates, and high prices, but they also inherited a much different world than older generations: since 1980, college tuition has increased by
“We did this survey to better understand the challenges the younger generation is facing, how they are (or aren’t) investing and why, and how we can help them start investing before they lose too much time. Some of the findings that really stood out for me are that financial worries and decision fatigue are impacting young investors’ confidence, they are overwhelmed and unsure how to begin investing, and nearly
The new data is from a proprietary
Additional key takeaways from the survey:
1. The pursuit of a better quality of life, personal interests, and new experiences drive younger generations’ investment decisions
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38% of Gen Z active investors say having a better quality of life defines their view of wealth (vs.35% of Millennials,34% of Gen Xers and27% of Boomers) -
25% of Gen Z active investors define wealth as being successful (vs.14% of U.S. investors overall) -
All generations agree that financial security is a crucial factor in defining wealth (
36% Gen Z vs.61% of Boomers vs.52% of all U.S. investors)
2. Gen Zers view wealth differently than older generations and will sacrifice returns to invest in causes they believe in
- Top things that make Gen Zers feel wealthy: a better quality of life, living life how they want and being successful (vs. Boomers’ top picks: having good health, being able to afford what they want and not just what they need, and living life how they want)
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65% of active Gen Z investors want to invest in causes they care about -
85% of active Gen Z investors would accept a return on their investment that’s significantly less than the average return of the S&P 500 (12% for the past 10 years);30% would accept a3% to5.9% return; and29% would accept a return of 6-8.9%
3. Investors are overwhelmed by recent events and are losing faith
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34% of active investors are more pessimistic about the future of their investments than they were last year -
79% have changed their investment strategies over the past three months -
69% of aspiring investors feel negative emotions (frustration, anxiety, helplessness) when thinking about starting their investment journeys
4. Younger generations compare themselves to others and social media
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Just
6% of all Gen Z investors said they do not compare their wealth and investment goals to anyone else’s (vs.26% of Gen X and40% of Boomers) -
Gen Z active investors are most likely to compare their investment goals to their parents (
35% ), their friends (34% ), and to people on social media (27% ) -
3 in 4 of aspiring Gen Z and Millennial investors say social media posts and influencers make investing look easy; this isn’t necessarily translating to their own lives, however, as
73% of Gen Z and70% of Millennial investors still don’t know where or how to begin investing
5. Relationships hold the key to building trust
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62% of Gen Zers trust financial advisors to give financial advice – more than any other generation -
50% of Gen Z investors get financial advice from family;40% get it from advisors; and36% look for advice on YouTube. Millennials turn to family (44% ), financial advisors (42% ) and friends (34% ). Gen Xers look to financial advisors (44% ), traditional investment sites (38% ) and family (38% ). Boomers seek advice from financial advisors (54% ), family (31% ) and traditional investment sites (29% ) - Gen Z and Millennials look for advisors who are diverse and share their values more so than older generations, who value an advisor who takes time to listen to them and is results-oriented
Methodology
About
U.S. Bancorp, with approximately 77,000 employees and
Investment products and services are: NOT A DEPOSIT • NOT FDIC INSURED • MAY LOSE VALUE • NOT BANK GUARANTEED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801819852/en/
Kristin Kelly,
Kristin.kelly@usbank.com; 303.585.4129
Source:
FAQ
What are Gen Zers' priorities when investing?
How are young investors influenced in their investment decisions?