investment for Gen Z.
The best investment strategies for Gen Z. I will debrief my findings for this AP Macroeconomics Final Project here. Please enjoy!
What are the best investment strategies for Gen Z?
Why did I choose this topic?
I gave my dad $6000 because he said that he would start investing in stocks. it was everything i earned from 7th to 12th grade. Because I know how hard it is to make money, I wanted to be sure that I would get something out of investing my money for 3+ years. I thought that I could apply what I learned from this project to get more involved in investing my own money (instead of leaving it with my dad mindlessly).
connecting to the principles of economic thinking:
Investment for Gen Z can be analyzed through Costs vs. Benefits, as it deals with comparing different investment strategies. Analyzing the costs and benefits of each strategy is intrinsic to my topic; an example would be how Berstein recommends saving at least 15% of your salary, cutting back on unnecessary spending, and “paying your future self”. The cost would be the inconveniences of cutting back on spending in the present, but the benefits would be having money to be able to invest in the future.
Another principle of economic thinking that can be connected to investment for Gen Z is “Incentives”. There are many incentives to investing that are made very clear to my generation. Whether it is through social media like #fintok on TikTok, or it is through the very prominent self-development videos on Youtube, I feel that my generation notices all of the incentives to investing.However, I feel that many members of Gen Z are afraid to start investing, or they feel that it does not apply to them because they are still young.
The last principle of economic thinking that is applicable to investing for Gen Z, is the concept of how “trade” and specialization increases the quality and quantity of choices we are able to make. The best way to connect these two topics would be the fact that all of the resources I found for this project were created by journalists and financial experts. Without specialization, there would be far less resources available on the internet, and investing would not be such a big topic of interest for Gen Z.
The investment demand curve relates to investment for Gen Z, as it covers many of the important factors involved in investing. The investment demand curve shows the amount of investment per year depending on the rate of interest. As the interest rate increases, the volume of investment decreases, and vice versa. This is very applicable to the topic of investing for Gen Z, as it is relevant when comparing the pros and cons of each investment strategy.
The business cycle relates to investment for Gen Z because it can be used to analyze changes in the short term and long term economy. Expansion and contraction can show the economic trends and value of real GDP in the economy. This relates to investing for Gen Z, as investment is a large part of what impacts the business cycle. During an economic expansion, investment increases at a rate much faster than consumption, usually without much regard to the interest rates. This can lead to an economic contraction further down the line.
how does this topic relate to my life?
This relates to my experiences because it deals with managing and investing money. Since I’ve always been interested in saving and managing my money, I thought that researching this topic would be fitting for this project. I came upon many of the success stories that people really close to my age had with investing. I feel that was very inspirational, and a good way to learn more about what other people my age are doing with their money. I feel that through this research, I have also learned about the economic trends for my generation, and how Gen Z affects the consumer market. Additionally, because I am not really given the opportunity to research things pertinent to my own life in other classes, I wanted to take advantage of this project prompt by choosing a topic that was related to my own interests.
“If you can’t manage $1,000, you’ll never be able to manage $100,000 or $1 million.”
— Dylan O’Bryne (age 24)
“[Gen Z] is the most disruptive generation ever”
— Bank of America
current state of affairs.
The state of affairs for investment strategies for Gen Z have not explicitly been addressed in policy and legislation. The closest thing that I could find to this topic in relation to the government was the ongoing debate about how Social Security would look for my generation. Other than that, I found that the investment strategies for my generation are influenced by social media outlets more than ever - with TikTok garnering over 296 million views for TikTok videos about financial advice. The effect of this is that a lot of the consumer market is catered to my generation, as it has the most influence in terms of affecting what Millennials and Gen X consume. An increase in technology is also significantly affecting consumerism in Gen Z, which led to Gen Z being termed the “most [economically] disruptive generation ever.” The trends and preferences of Gen Z can be used strategically to predict future consumer trends.
where is this topic headed?
Investing for Gen Z will continue to look different in all of those different sectors. Due to the rise of technology and influence of social media for Gen Z, it is expected that investment will continue to be a valid and effective means of making money. Additionally, with Gen Z holding so much influence in the consumer market, businesses will continue to cater to the trends of the generation. As of now, Gen Z is the youngest generation to start getting involved in investing. In terms of the context of investment for Gen Z, I feel that the incentives to investing will continue to increase, and investment will be a topic discussed even more for future younger generations.