Most people would agree that investing is an important part of preparing for future financial goals. That doesn’t mean everyone does it the same, though.
No two generations think about their finances the same way, and that includes how they invest their money. While older generations had a more traditional view of smart investing, younger generations are rewriting the playbook. And now, things that wouldn’t have been considered real investments before are what they gravitate towards.
Each generation invests their money in different ways
Boomers’ biggest investment goal is to be responsible with their money
Young people often look at boomers as the generation that has always had it all, but that’s not an entirely accurate assessment. Although boomers hold more wealth than other generations do, they’re still seriously concerned about their ability to retire.
Kampus Production | Pexels
This has given boomers a more conservative view of investing. They see the wisdom in it, but they also avoid doing anything overly risky. It’s clear in the way that boomers prioritize the stability of their investments over a firm’s political and social leanings.
Experts thought the strong economy that boomers grew up with, combined with the size of the generation, would lead them to become powerful investors. They’re a force in real estate and the stock market, but are probably more cautious than some expected them to be.
Gen X’s mindset is similar to boomers’, but they do invest a bit more liberally
For Gen X, their life circumstances have affected the way they invest their money.
They’re often called the “sandwich generation” because they have to take care of their elderly parents and their kids at the same time. This has left them in a really difficult financial situation with low consumer confidence.
SDI Productions from Getty Images Signature via Canva
Gen X has less wealth and more debt, so they’re careful, but not quite as much as boomers. They’ve seen the stock market at some of its highest points, which makes them feel comfortable investing in it with a more optimistic mindset.
This isn’t a generation that takes a backseat while their financial advisors do what they think is best, though. Gen X wants to play an active role in their investment choices and understand what’s going on with their money. They take more ownership of it than boomers do.
Millennials have more innovative investments that seem to work well
Millennials didn’t have an easy introduction to adulthood thanks to the Great Recession, but it seems like they’re bouncing back.
This generation is benefitting from a healthy stock market and increased real estate ownership. This led financial journalist Sarah Foster to call millennials “late bloomers.”
Dean Drobot via Canva
Although millennials are far from retirement, they’re preparing for it now with healthy 401(k) contributions. Their investments are a bit more varied than previous generations’ because they’re open to new options like cryptocurrency. While this doesn’t work for everyone, it’s certainly helping some of them.
Unlike boomers, millennials are really interested in sustainable investments. They’ve rejected the idea that making more socially conscious choices leads to less money in the long run. There aren’t many millennials who would say they’re thriving financially, but they have carved out a space for themselves.
Gen Z is investing their money in new ways that aren’t always very secure
Unfortunately, Gen Z isn’t nearly as optimistic about money as millennials are. It’s such a big source of stress for them that they try to avoid thinking about it, instead of doing what they can to feel more in control of their finances.
SHOTPRIME via Canva
This probably explains why they’ve turned to some unique forms of investing. Over half of Gen Z regularly bets on sports, and they actually see that as a way to reach their goals. It’s obviously a risky strategy that experts warn against, but that doesn’t seem to be stopping them.
Gen Z’s desire to stand out isn’t all bad, though. They’re also investing in options like crypto that are still new, but also more stable. And their penchant for investing early on might help them get through the challenges caused by sports betting.
Mary-Faith Martinez is a writer with a bachelor’s degree in English and Journalism who covers news, psychology, lifestyle, and human interest topics.
