How Will Teens and Gen Z Invest Their Money? Think Low-Risk, ESG and Roboadvisors

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Much has been written about the social consciousness of today’s teenagers, aka Generation Z. Data from Pew Research found that Gen Zers tend to be progressive, pro-government, supportive of the country’s growing ethnic diversity and less convinced than older generations of the United States’ superiority over other nations.

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Find: Teens Are More Knowledgeable Than Their Parents about Cryptos, Survey Says

So how will that translate into the investment world?

It’s not too soon to start thinking about that. Gen Z will surpass millennials in earnings in the next decade, according to Bank of America data that was referenced in an April article on the Blue and Green Tomorrow website. This means today’s teens will become a major force in the investment world in the 2030s and beyond. A June 2020 survey cited by Forbes revealed that three-quarters of Gen Zers and Millennials plan to invest.

One thing you can expect is that Gen Z, like Millennials, will take a more conservative approach to investing than previous generations in terms of the amount of money they can afford to put into stocks, bonds and other assets, and the amount of risk they are willing to take. The reason is simple: Both groups are saddled with heavy student debt that older Americans simply didn’t have to deal with, which means more of their money will have to go toward paying down that debt.

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A good deal of the money they do have available to invest will likely go toward environmental, social and governance (ESG) investments because Gen Zers tend to be more focused on environmental and social justice issues than their older peers. A Bloomberg survey of college students earlier this year found that Gen Zers expect green and sustainable investing to be the biggest investing trend of the year.

One area of the economy that might get a boost is plant-based foods. As CNBC noted in an article late last year, Gen Z is the first age demographic where most people adhere to some kind of meat restriction. This should bode well for makers of plant-based or lab-grown meat alternatives, such as Beyond Meat.

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Find: Building a Green(er) Portfolio

Meanwhile, technology stocks should benefit from the fact that today’s teens have been raised on technology from the crib, and view tech stocks in much the same way that older generations viewed manufacturing stocks.

Gen Zers will also likely embrace roboadvisors and other high-tech investing tools and put more of their money into tech start-ups rather than just traditional assets like stocks, funds, bonds and real estate.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte MagazineStreet & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, will be published in 2021 by Atmosphere Press.

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