Gen Z Gets Into Investing Early

Gen Z and lower-income Americans are investing at higher rates than any previous generation, according to a new study from the JPMorganChase Institute.

The Big Bet: The increase in investing coincides with record declines in first-time home ownership — the most tried-and-true method of wealth building. With housing prices becoming so cost-prohibitive, many young people are realizing that putting all their disposable income toward saving for a down payment isn’t the most financially responsible choice these days.

Behind The Portfolios: It turns out there’s no dopamine rush quite like immediately building wealth — or chasing the hope of getting rich quickly.

• One-third of 25-year-olds now have investment accounts — six times more than a decade ago.
• As of this year, people with “below-median incomes” are five times more likely to be investing than they were a decade ago.
• The surge in popularity has been fueled by people learning about investing during the pandemic, the introduction of apps that made retail trading easier, and the recent wild gains in the stock market.
• Demographically, young men are the most active investors — a phenomenon that also matches growth in crypto and alternative-asset markets.

The Future: Interestingly, the study found that the same people who are pouring money into investments also have low liquid cash. That means some of those investors could be treating the stock market like a slot machine, hoping to strike it rich by chasing trends or buying a dip, per Axios.

That could make Wall Street investing as much a gamble as Las Vegas — meaning a lot of people could lose their shirts if they don’t stick to sound investing principles.

Projection: If some Gen Zers play their cards right, they could save up for a down payment through stock-market gains alone — rather than relying solely on career income.