Generation Z starts investing and saving already in their teens

By: Trademagazin Date: 2024. 10. 21. 08:31

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Generation Z begins to invest earlier and to a greater extent than any other generation: they start as early as 19 years old and, compared to previous generations, they also invest before the age of 21 in a higher proportion. Although simplicity and risk-taking are important to them, they are also looking for responsible investments. In one semester, the assets managed by responsible funds in Hungary increased by three and a half times, although this is mostly due to the classification of government bonds as responsible funds.

Generation Z (those born between 1997 and 2012) prefer digital financial solutions such as cryptocurrencies and online investment platforms. They are characterized by an interest in quick and easily accessible tools, as well as the fact that information obtained from social media and influencers significantly influences their investment decisions. The average concentration time of Z’s is 8 seconds and almost half of them are constantly online, so they need to be offered as simple messages and understandable products as possible.

Digital tools and technology preferences

Members of Generation Z are committed users of fintech solutions, who prefer investment platforms that enable simple investments that can be managed from a mobile phone. Generation Z is more open and risk-taking in the area of borrowing, saving and investing, while every second young person belonging to the generation has some kind of permanent investment. The mentioned report of the MNB reveals that high-risk products are prioritized when choosing investment products, within which their most popular investment product group is cryptocurrencies (49%), followed by equity investments (35%) and mutual funds (34%).

Risk taking and return expectations

Based on the MNB’s fintech report, Generation Z often looks for alternative investments, such as cryptocurrencies or technology stocks, while they find traditional, risk-averse investments less attractive, but they are also characterized by investment decisions driven by FOMO (Fear of Missing Out). When it comes to mutual funds, Generation Z prefers ETFs, mainly because of their low cost, simplicity and diversification.