Move Over Millennials, Confident Gen Zers Investing at an Earlier Age
INDUSTRY TRENDS AND RESEARCH
While most Americans are confident in their investing strategies, Gen Zers, who are the most confident of the generations (71%), say that learning about investing at an early age and improved access to investing are among the biggest reasons for their confidence.
Among Gen Z, in particular, the top reason for increased financial confidence is improved access to investing, according to Schwab’s eighth annual Modern Wealth Survey. This generation, which starts with those born in the late 1990s, began saving and investing when they turned 19 years old, on average, nearly half the age of when Boomers started investing (35) and six years before Millennials started investing (25), according to Schwab’s data.
Additionally, more than a quarter of Gen Zers report that they were taught about investing in school, significantly more than older generations. Meanwhile, roughly half of all those who are not confident in their investment strategy say that not being taught about investments in school or at a younger age by parents/family are their top reasons for lack of investing confidence.
Most Americans (60%) also feel that they are in a better position to achieve their financial goals than the generations that came before them. While this optimism is most pronounced among Boomers (66%), every generation surveyed showed a similar level of confidence when asked to compare themselves to previous generations—Gen X (63%), Millennials (62%) and Gen Z (60%).
When asked specifically why they are in better financial shape than previous generations, the Schwab survey indicates that Americans believe they have more ways to build wealth (50%), increased accessibility to investing (46%) and additional investment options available to them (46%).
Another factor likely driving this positivity is a surge in the number of Americans investing in the stock market. Schwab’s survey shows that nearly 6 in 10 Americans (58%) are investing today, in line with recent Federal Reserve data that shows the same proportion of American households that own stocks—either in retirement accounts, mutual funds or as individual shares.
“There has never been a better time to be an investor, and it’s a very positive sign to see that more Americans than ever before are engaged with their personal finances and taking steps to build long-term wealth, in particular younger generations who are getting started with saving and investing earlier in their lives,” said Jonathan Craig, head of Investor Services at Charles Schwab.
Investment Strategies
In addition to taking advantage of more widely available investment advice, educational resources, and investing tools, American investors today—particularly younger ones—are also exploring a wider range of investing strategies, the findings show.
Though buy and hold (56%) and growth investing (53%) are the most common approaches, Schwab’s survey shows Americans are also integrating more recent innovations in the investing space such as fractional share investing (37%), direct indexing (32%), socially responsible investing (31%), automated or robo-advisor investing (28%), and thematic investing (25%) into their strategies.
“The result of this engagement and access to investing education and resources is a more sophisticated, more knowledgeable, and most importantly, more financially confident population of American investors,” observed Rob Williams, managing director of Financial Planning at Charles Schwab.
Social Media Skepticism
Meanwhile, when it comes to financial advice, Americans are more likely to engage with a professional financial advisor (59%) or family or friends (57%), as compared to social media platforms (42%), the survey further reveals.
In fact, most Americans don’t follow any social media influencers for financial advice (76%) and remain skeptical about social media's effectiveness in making it easier to manage their money.
Nearly two-thirds feel that social media has had no impact on managing their investments, and less than a quarter (24%) feel it has made it easier. Most respondents grade social media platforms as the lowest source, relative to other types of financial advice.
One area for improvement among Americans is financial planning. According to Schwab’s survey, only 36% of Americans have a written financial plan. Among those who do, three in four say it makes them feel more in control of their finances and nearly all (96%) say they feel confident that they will reach their financial goals.
Among those who don’t have a plan, most say it’s because they don’t have enough money (43%), it’s too complicated (25%) or they don’t have enough time (21%).
The online survey was conducted by Logica Research from March 4–18, 2024, among a national sample of 1,000 Americans aged 21 to 75. An additional 200 Generation Z Americans completed the study.
Detailed results of the survey can be found here.