For most 20th century Americans, the goal was, have a house with a white picket fence, two kids and a dog named Spot. For their future, they imagined flying cars and holographic images, something you would see in a sci-fi film. For those born between the years of 1997-2015, known as Generation Z, the idea of the “American Dream” has completely evolved from what their parents and ancestors imagined as their measure of success. Today young adults experience a level of connectivity that influences their purchases, investment decisions, and overall interpretation of wealth. Holographic images are a reality, but video calls just seem to be more practical.
The way we communicate has come a long way from the ever famous, “You’ve Got Mail.” While email is still the most prominent form of communication in many professional settings, Millennials and, even more so, Generation Z use text messages and direct messaging as their primary form of communication. Platforms like Twitter have championed the distribution of information in bite-size formats like short passages, videos, and GIFs (brief collages of images and/or text). The rapid-fire of information impacts many decisions being made by young adults, whether they are aware of it or not. Furthermore, the demand for up-to-date information is even higher and affects businesses in all industries. There is now a generation that is not only concerned with their personal style and brand but also the cost to bring their vision to life.
Generation Z is regarded as more financially savvy than their big sibling Millennials. Since they were born to Generation X parents, comprised of the do-it-yourself “latch-key kids,” they were raised with the philosophy that nothing will be handed to them. Do your own research and make your own way is the mentality of Gen X. Sometimes the best-orchestrated plan does not work, and you need to have contingencies. That imprint from their parents is what birthed the determined and opinionated Generation Z. They view the world through their personal lens and that of their parents, who have experienced multiple market crashes and withering retirement savings. Gen X parents went to four-year colleges and got the well-paying job (then came the dotcom bubble) and moved out to the suburbs (just before the housing crisis) to start a family. They checked all the boxes in the American Dream checklist and still came up short on the scale of financial security. So, what does that mean for Generation Z?
While previous generations caught on gradually, young adults today make swift moves to take control of their future. These adults have the option of being an “Influencer” as a full-time occupation, which essentially means being a celebrity of social media platforms like YouTube and Instagram. Generation Z has harnessed the demand for instant communication by sharing their opinions on everything over the internet. Coupled with the famous marketing and advertising revenue that businesses have generated for decades, you have yourself a cash cow. There is a level of investment that young adults are putting into themselves that was unheard of for earlier generations. If you can take out a personal loan for an iPhone, ring light, and the aesthetic backdrop of a performing artist’s dressing room, you may be better off now than someone who invested $200,000 in post-graduate education. Both roads are a path to potential success, but the value of success is dependent on the individual.
The metrics measure of success is different for every person. Generation Z is not immune to the feelings of financial insecurity, not measuring up to the success of their peers and having doubts about their future. Those feelings are a part of every generation’s coming- of- age story. The important part is to gain awareness along the way. Generation Z was set up for success in the sense that financial literacy is much more prevalent today. Tools to improve daily living or “life hacks” are readily available in a five-minute YouTube video, instead of an eight-week course. Education about how to protect your assets and ensure that you are growing your financial buckets with purpose are all tools that young adults already have in their knowledge bank. The final piece is living a healthy life with enjoyment and purpose. That means: Build bonds that deepen relationships with family and friends. Set goals with your circle and execute them so that the whole group improves their quality of life in this generation and the next. Please stay tuned for future articles about the impact that our culture has on the financial decisions of young adults and future investors.