How The Pandemic Pushed Millennials And Gen Zs Into Investing
You don’t have to look far to find stories of how the pandemic has impacted young people. They have been among the hardest hit but there have also been positive stories.
How did the pandemic hit young people
According to a report in July 2021 by the Organisation for Economic Co-operation and Development (OECD), about half of young people’s households have suffered some form of job-related disruptions, whilst more than one in three young people reported financial difficulties. They were most likely working roles such as travel and hospitality all of which were severely impacted by the lockdowns.
A Young Minds survey carried out in January 2021 showed that 13-25-year-olds stated 75% agreed they have found the lockdown hard to cope with. 67% believed the pandemic would have a long-term negative effect on their mental health.
Whilst there is a light at the end of the tunnel, the lasting effects of the pandemic are also likely to continue impacting many for some time. However, it’s amongst these gloomy times that positive stories have appeared. When it comes to money management, young people appear to be more engaged and interested in their finances compared to previous generations.
More Young People Engaged In Investments
There are many reasons why the younger generation has a heightened interest in investing. This includes being stuck at home during the lockdowns where information is readily available on the internet, and popular influencers promoting investment activity.
A report by Don’t Disappoint Me reported that 75% of young people in the UK have invested or are considering investing. The report also stated three-quarters of Millennials and Gen Z mentioned they were planning to invest in the following year. Finder also noted that 75% of Millennials and Gen Z are planning to invest, with around 50% saying dedicated platforms and apps made them more likely to do so.
How Technology Is Helping Young People To Invest
A report by Magnify Money in February 2021 mentioned young investors are using online tools, forums, and apps to help grow their money. Roughly 60% belonged to online investment forums while 41% used social media, predominately TikTok and YouTube as a source for investment information. The same report stated that only 27% sought advice from a financial advisor while the majority of Gen Z go to social media. While this may look like a community banding together, it’s also concerning as misinformation can easily be spread.
When To Trade
It’s generally believed that it’s better to start sooner rather than later – investment is a long-term process. By starting sooner, you have more time to watch your money grow. Investing through the stock market, or an IFISA** is likely to yield better returns.
What Are The Young Investors Doing With Their Investments?
The younger generation isn’t just using the money for retirement. According to the same report by Magnify Money, they reported only 36% of young investors plan to use the money for retirement. 35% will use the returns to fund more investments and 19% plan to spend their returns on major purchases such as a home or a car.
With the living cost consistently increasing since the start of the pandemic, there is no denying this is having a huge impact on the financial pressure on the young generation. This is another reason why young people are turning to quick-profit investments to try and grow their wealth rather than letting their savings erode away. To some, this is a way to take control of their future.
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This blog is not intended to give out any financial advice. If you have any queries, you should seek independent advice from professional financial advisors before investing your money.
