I’m a Gen Z Investor: 4 Tips for Success I Want Every Baby Boomer To Know
Written by
Angela Mae
Edited by
Amen Oyiboke
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According to a recent Charles Schwab Modern Wealth Survey, the average Gen Zer starts investing at age 19. This is younger than previous generations (25 for millennials, 32 for Gen X, and 35 for baby boomers).
While investing strategies vary by generation — and even from person to person — older investors can often learn from younger ones.
Aaliyah Kissick, a Gen Z investor and CEO of the Financial Literacy Diaries has tips for older generations — including boomers — looking for financial success.
Here are the four tips to investing success that Kissick believes will get you on the right track.
Embrace Technology
With technological advancements happening every day, investing may not seem like the easiest task. However, technology has made it much easier to invest and build financial success.
“Technology has made investing easier than ever. You no longer need to have a financial advisor to purchase stocks on your behalf. Many apps and websites allow you to directly buy stocks,” said Kissick.
“The reason this is so important is that financial advisors charge AUM — assets under management. You can expect it to be around 1% for a clean number,” she continued. “When you started investing, 1% might have been a small part of your portfolio. As you approach retirement and investments [grow], 2% becomes a significant amount. For example, if you have a $1 million nest egg, you may be paying $10,000 a year to someone.”
For boomers and other older investors, switching to an app or website that allows you to buy stocks could be a good alternative. If you’re comfortable paying a bit more, there’s nothing wrong with continuing down the traditional path — just know that you don’t have to.
“Financial advisors are a great way to have peace of mind that a professional can manage your money if something goes wrong, but as a digital native, I think it’s important to tell older generations that it isn’t required to have one,” said Kissick.
Set Real-Time Notifications
“If you self-manage your investments, you can set notifications on certain apps like Robinhood to notify you if a stock you want has dropped a certain percentage,” said Kissick. “You can’t always time the market, but this may help you buy lower for larger returns in the long run.”
You can also set real-time notifications using Google Alerts. Simply go to the Google Alerts page, select the topic or business you’re interested in, and decide how often you want to get notifications. Select “create alert” and you’ll receive emails whenever a matching result comes up.
This strategy does require a more hands-on approach, but if you have time on your hands — such as if you’re on the verge of retirement or have cut back to part-time at work — it could be beneficial.
Consider Dollar-Cost Averaging
Another tip for success that anyone can follow, boomers and non-boomers alike, is dollar-cost averaging.
“Dollar-cost averaging, which is investing a fixed dollar amount in a security over time, is a way that investors can potentially lower their average cost per share, which leads to higher returns when it’s time to cash out for retirement,” said Kissick.
Dollar-cost averaging can also help you become more disciplined in how you invest, particularly when it comes to buy-and-hold investing. It can also reduce overall risk — again, this is good for your bottom line. Plus, it’s more of a hands-off approach, leaving you more time to handle other matters.
Take Advantage of Your 401(k)
If you’ve been working for a few decades, chances are you’ve had a 401(k) at some point. You might even have one right now. But if you aren’t taking full advantage of it, you could be missing out on some great returns.
One of the most first things you should ideally do is take advantage of employer-matching contributions — it’s the closest thing to free money you’re likely to get. But you may also want to review and adjust how your plan is set up.
“If you have a 401(k) through your job that was set up automatically for you, you may be able to re-allocate your shares based on special interests impact investing goals,” said Kissick. “Many 401(k)s offer a large variety of pre-made options to choose from.”
Ultimately, you should be allocating your shares in a way that maximizes your returns. Some of the more common options are mutual funds and exchange-traded funds (ETFs). These can be as aggressive or as conservative as you’d like. Just be sure to consider factors like your intended retirement age, risk tolerance, and how much money you’ll need to comfortably retire.
Note that not all 401(k) plans allow for asset reallocation.
“To find out if your 401(k) is eligible for reallocation like this, you can contact your provider or HR department,” said Kissick.
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