Gen Z are investing nearly twice as early as Baby Boomers, says new report

The survey by the US financial services firm found Gen Z starts investing on average at 19 years old. This contrasts with previous generations like Baby Boomers who began investing around 35.

A key driver appears to be increased exposure to investment education. Over a quarter of Gen Z respondents reported learning about investing in school, significantly higher than older generations.

Gen Z being investing at an earlier age, survey shows

Nearly 70 percent felt confident about their investment strategy, mainly due to readily available financial advice, education and the ability to research companies online.

Gen Z were most self-assured at 71 percent, many having learned basics in school.

The survey further highlighted this early introduction as a top reason for Gen Z’s confidence in investment strategies.

Improved accessibility to investing was also cited as a factor behind Gen Z’s early adoption.

The generation feels it has more avenues to build wealth and invest compared to prior generations.

While Gen Z’s participation in investing lags older cohorts currently, the younger generation exhibits engagement with recent investing innovations. Moreover, Gen Z cited better access most, reflecting technology making saving and investing more approachable.

The survey also revealed sizeable proportions utilising fractional shares, direct indexing, socially responsible investing, robo-advisors and thematic investing strategies.

The survey data suggests a generational shift underway, with Gen Z poised to establish investment habits from an unprecedentedly young age.

“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,” Jonathan Craig, Head of Investor Services at Charles Schwab said.

“We of course saw the number of Americans investing go up during the pandemic, but there are a lot of factors driving this trend that were in place before that and continue to drive engagement today. Industry changes like lower costs and minimums to invest and get advice, broader access to sophisticated platforms and tools, a proliferation of investing information such as research and educational content, and significant product innovations have all made investing more accessible than ever before. Creating access for more people to become investors was Schwab’s core mission when our firm started more than 50 years ago, and it’s still at the heart of everything we do today,” Craig added.

The survey also found that over 60 percent of Americans feel they are more likely to achieve their financial goals than previous generations.

Optimism is highest among baby boomers aged between 57-75, with two-thirds believing they have better chances of success.

However, just 36 percent possessed a formal financial plan despite their positive impact.