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MC Stories – The Technology Age — The Good, the Bad, and a Little Gen Z

Do you remember the time before cell phones, computers, or even televisions?

The generation who might answer “no” to this question, Generation Z, categorized as those born between the years of 1997 and 2015, is also known as the “Smartphone Generation.” According to a 2018 Pew Research Center survey, 95% of 13- to 17-year-olds have access to a smartphone, and a similar share (97%) use at least one of seven major online platforms.1 Teens surveyed have different opinions on whether social media has had a positive or negative effect on their generation. On a macroscale we are learning quickly to deal with the good and bad that is coming from this new Technology Age.

The Good

Staying connected to family and friends is easier than ever. One major cause for the positive impact is that the technologies traditionally used for business purposes, like videoconferencing and screen sharing, are now being brought into the home for personal use. For example, family meetings over Zoom are the new Sunday dinner meetup and grandparents or parents of Generation Z now celebrate birthday parties, baby showers, and graduations virtually. While in-person is preferred, most are happy they can enjoy each other and still maintain safety guidelines during the current pandemic.

Generation Z can also weigh in on the political conversations happening in this crucial election year on platforms such as Twitter and TikTok, even if they are not old enough to vote. Empowering youth to take an active role in their future is the result of independence and resources not afforded to previous generations. Activism is not unique to Gen Z, but this younger generation is sharing opinions of each other at a rapid pace that is affecting their self-worth.

The Bad

The more time teens spend looking at screens, the more likely they are to report symptoms of depression.2 The current circumstances of 2020 may lead you to believe that there is nothing occurring to feel left out of—but not so fast: FOMO, or fear of missing out, still runs rampant due to platforms like Facebook and Instagram, which show us a skewed view of the world and other people’s lives. Young adults who are looking for ways to monetize themselves and make cash fast are using technology to invest more easily which could have a good return or very bad returns depending on the market environment.

New online trading platforms such as Robinhood reported an increase in new accounts, spurred mostly by new investors who saw the market downturn in March of 2020 as an opportunity to start investing. Traditionally, financial professionals who trade stocks are required to pass an exam to obtain their securities license and are regularly monitored according to industry regulations. Millennials and Generation Z, while not as experienced in the investing space, still felt confident buying familiar big name tech stocks.3 If investors employ a buy-and-hold strategy, they may come out successful; but if individuals are allocating mortgage payments or student loan debt to a risky portfolio, they are in for a roller-coaster ride—emotionally and financially.

Generation Z

The Smartphone Generation may be young but they are mighty. They are coming of age during a volatile economy and an unprecedented technology age. The percentage of teens that reported they are online “almost constantly” virtually doubled in 2018 from a couple of years prior. This data makes them prime targets for online advertising and social media campaigns. With the access and speed currently available to this generation, the need to be a prudent investor is even more important. For the parents and other adults affected by this plugged-in generation (i.e., All of Us), it would be advantageous to learn the habits of this new generation and listen to their viewpoints, which are just as bold as past generations but reach much further. Making a wave is much easier with a touch of your smartphone and we are all now finding ourselves in the splash zone.

 

 

1 https://www.pewresearch.org/internet/2018/05/31/teens-social-media-technology-2018/

2 https://www.pewsocialtrends.org/essay/on-the-cusp-of-adulthood-and-facing-an-uncertain-future-what-we-know-about-gen-z-so-far/

3 https://www.cnbc.com/2020/05/12/young-investors-pile-into-stocks-seeing-generational-buying-moment-instead-of-risk.html

MC Stories – Gen Z’s American Dream

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.

Technology Age

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.

Financial Literacy

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?

Wealth Transformation

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.

In Conclusion…

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.

Financial Bites – Tax Planning for Individuals Video and Update

Tax Planning for Individuals, the third event in our new Financial Bites lunch series, was a huge hit. In this session, our advisors explained why tax planning is vital to a healthy financial life and how to put money back in your own wallet. Thank you to all our attendees as well as our outstanding wealth advisors, Bryce Snell and Wade Calvert, who presented.

Click on the above image or visit this link to watch our tax planning session: https://vimeo.com/mortoncapital/fbtaxplanning

We hope you find this video valuable. Please feel free to share this link with family and friends and on your social media channels. Any feedback you have would be extremely valuable to our team, including any recommendations of topics you would like us to present on in the future. Financial Bites is a complimentary series and our upcoming sessions are filling up fast, so we encourage you to RSVP soon. Click on the link below to view all sessions and RSVP today!

https://mortoncapital.com/financialbites

We hope to see you soon and thank you for your continued support of Morton Capital.

The MC Team