Gen Z could use their stimulus checks on cool gear but they’re not. Instead, many plan on saving or investing the funds. Here's everything to know about this new trend with Gen Z and money.
"The UNiDAYS finance survey of 24,000 students reveals one in four of which now own cryptocurrency. Gen Z are the professionals of tomorrow, and fast becoming the investors of today." Josh Rathour, CEO UNiDAYS
Don’t let Gen Z’s catchy ‘Gimme the stimmy’ give the wrong impression. A large portion of Zers are responding to the latest round of Economic Impact Payments (aka stimulus checks) with anything but frivolous behavior. Sure, some are spending on wants (and really who could blame them given 2020) but many Gen Zers are, in fact, investing the money.
In a recent survey, Deutsche Bank queried 430 people who use digital broker platforms and found that among the 18- to 24-year-old retail investors included in the survey, this group planned on putting 40% of any stimulus checks they receive into stocks. Of the other generations surveyed — Millennials, Gen X and Boomers+ — only Millennials would invest more at 50%.
To date, there have been three rounds of stimulus aid. Not all Gen Z got all three checks and not all Zers are eligible (still a dependent, no tax return on file). According to a CNBC survey conducted in February, 41% of Gen Z had received stimulus funds.
Which brings us to investing. With the pandemic limiting outside activities, Gen Z has had more time to research and trade; digital platforms like Robinhood and E*Trade have made it easy to trade from home.
Along with that ease of trading, there’s been growing activity. That Deutsche Bank survey found that more than half of all respondents increased their investments in stocks over the past year, with nearly half (45%) investing for the very first time.
Like student Sam F., “When in-person classes moved online, I moved back home. I’ve been able to save money that way but make a little money too in the stock market. I’m new at online trading, it’s fun. I’m not leveraging large amounts — but I’m getting more comfortable doing so.”
While some Gen Zers are just dipping their toes into the investing world, others are leading entire groups of venture capitalists (VCs). In November 2020, 23 year-old Meagan Loyst started a Gen Z VC group on Slack. Her intention was to simply create an easy way to connect with her friends and other young investors. In 4 days, the Slack community she created grew from 30 people to 1,000. Now, six months later, Gen Z VCs is an inclusive and global collective of 6,000+ Gen Z VCs, founders, angel investors, startup enthusiasts and aspiring VCs.
It’s interesting to note that pre-Meagan, the term “Gen Z VC'' didn't exist. Search for the term on Twitter today and you’ll find a long scroll.
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