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Why investing is a new trend among Gen Z

by Stephanie H.
    Download the report: Gen Z spending habits before and during COVID-19

    Why brands should double down on back-to-school marketing

    This academic year will also be like none other. But for brands (and students), that’s a good thing.

    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

    New Finance Trend: Gen Z is ready to Invest now

    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. 

    How Gen Z are spending their stimulus checks

    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%.

    Leverage these defining Gen Z traits. Download our Gen Z Marketing Playbook.

    How did Gen Z spend the earlier stimulus checks?

    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. 

    • 25% of survey respondents spent the stimulus on everyday expenses
    • 20% paid rent or mortgage
    • 13% used the money to pay down debt
    • 8% of Gen Z respondents said they spent the money on “something else” or “something special”
    • 25% saved it

    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.

    Gen Z investors: The young and the fearless

    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.

    Gen Z investing_image 2-1

    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.

    Gen Z and investing: Brand takeaways

    • As welcoming as Gen Z are, brands should take heed and offer the same. Financial trading and investing is no longer for those with millions in the bank. Gen Z are smart and not waiting for ‘one day’ to make investments. Brands should save a seat for Gen Z and ensure messages and offers don’t overlook them due to their age.
    • If what they’re looking for doesn’t exist (the VC group for example), they’ll create it. Wherever an idea comes from the brand itself, a Gen Zer or better yet, the two working together interacting with and getting the input of this important and powerful group will help brands meet Gen Z’s needs. (This advice applies to all brands, not just financial ones.)
    • Acknowledge reality in the case of stimulus funds, don’t try to make a profit off their windfall. Zers know not everyone can afford to take stimulus payments and invest it all in the stock market so don’t encourage them to do so without any regard for their personal situations and a reminder to save first. Even if they are fortunate enough to have a choice in how they spend the money, Gen Z won’t respect brands that assume everyone can.

    UNiDAYS x Ad Age: Gen Z Marketing Playbook

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