The Royal Mint has released its ‘Gen Z Investment Report’ that shines a light on the investing habits of young people. Interestingly, the paper reveals that eight in 10 of this generation are investing in their futures. It also says the majority are putting away up to £200 per month. Let’s take a closer look at the findings.
What did the report reveal about young people’s investing habits?
According to the Royal Mint, 80% of 16-25-year-olds are choosing to invest in their futures, with the majority (57%) stashing away up to £200 per month. It’s suggested the value of investments made by young people will amount to £9.4 billion over the next financial year.
With regards to investment choices, the report highlighted that 23% of young investors are followers of Financial Influencers, or ‘Finfluencers’. This refers to individuals on social media who may shout about a particular meme stock or a new type of investment option. Such tips often come without a disclaimer and can sometimes promote unregulated investments.
Despite this, the report also pointed out that gold is the choice of investment for 15% of young investors. Precious metals, such as gold, are typically seen as a reliable way of holding wealth, especially during times of economic uncertainty. In fact, any young investor who has invested in the precious metal since the beginning of the year is likely to be sitting on a tidy profit right now.
Unfortunately, not all young investors have been successful with their investment choices. The report highlights that a massive 64% of the 16-25-year-olds surveyed have experienced some form of investment loss. The Royal Mint suggests some of these losses could be blamed on a misguided ‘get rich quick’ mentality.
What else did the report reveal?
Aside from outlining the investment choices of young people, the report also suggested that almost a quarter of young investors (23%) do so to alleviate future financial worries.
To help further support their finances, young people are also seemingly cutting down on everyday expenses. Of those surveyed, 88% are cutting down on restaurant visits. On a similar note, 67% of young people say they are travelling less, while 39% say they drink less alcohol.
In addition to highlighting changing spending habits, the report suggests that Covid-19 has contributed to young people’s changing financial outlook. That’s because 40% of respondents said the pandemic has ‘brought to light’ the value of having secure finances. Meanwhile, 34% said the pandemic has made them eager to learn more about investing.
Can you be too old to invest?
The earlier you invest, the longer you have for your portfolio to grow. This is because of compounding returns, and the simple fact that younger investors have longer to add to their wealth. That said, for as long as you’re healthy, it’s never too late to invest.
Of course, depending on your age, your portfolio may look very different to one held by a typical young investor. For example, young investors may prefer to hold a higher number of equities. That’s because they have a longer period to ride out any bumps in the stock market, so they can take on more risks. Older investors, on the other hand, may prefer to hold more bonds that are less risky.
To help determine your personal tolerance for risk, take our investment style quiz.
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If you’re an investing newbie, it’s a good idea to take the time to read the investing basics to help get you started.