For Gen Z, financial security isn’t enough to feel wealthy

Gen Zers don’t prioritize financial security as much as older generations


For many Gen Zers, feeling wealthy may mean living a fulfilling life instead of having a lot of money.
A new survey shows having “a better quality of life” makes more Gen Zers feel wealthy than financial security.
Nearly twice the percentage of Boomers, though, said being financially secure makes them feel wealthy.

For many Gen Zers, feeling wealthy doesn’t necessarily equal being financially secure.

More Gen Zers consider having “a better quality of life” (38%) a sign of wealth than having a certain amount of money (36%), according to a US Bank survey of 3,000 active and 1,000 aspiring investors from earlier this month. Nearly as many, 28%, say wealth derives from “living life how I want.”

In contrast, 61% of baby boomers said feeling “wealthy” means having financial security, followed by having good health at 33%. On the whole, 52% of active investors say financial security is the defining feature of wealth.

According to the report, Gen Z investors tend to be motivated by experiences and the pursuit of personal interests — a quarter said “being successful” and having the freedom to do what they want define wealth. Gen Z more than any other generation emphasized less tangible definitions of wealth.

This data supports June findings from Schwab in which 61% of Gen Z respondents said “being able to afford a similar lifestyle as my friends makes me feel wealthy,” in contrast to 31% of Boomers. The Schwab data suggests wealth is defined not by reaching some abstract net worth but rather by being able to live life the way one wants.

That’s not to say financial security isn’t important to Gen Zers. Most younger Americans likely cannot reach the approximately $233,000 a year they’d need to feel secure or comfortable with their finances, according to a new Bankrate survey. Only 25% of Gen Z feels financially secure, with most predicting they’ll be financially secure one day.

According to US Bank, upwards of four in five Gen Zers investors reported being highly motivated to invest in new opportunities and experiences, nearly double the percentage of Boomers. As a result, many Gen Zers are willing to accept lower returns so long as the investments align with their beliefs and values.

Nearly two-thirds of Gen Zers reported investing solely in businesses that support causes they care about and take public stances on particular issues — more than double the percentage of Boomers.

Gen Z is perhaps investing more in experiences and passions due to their overarching concerns about the economy, which many say makes it hard to achieve financial stability amid high student loans and rents. Around 89% of active and aspiring investors reported being extremely or very concerned about inflation, followed by the possibility of a recession and rising interest rates.

Boomer and Gen X investors reported being more pessimistic about their investments in the future than Gen Z investors, though nearly all Gen Zers still compare their financial situations to others including their parents, friends, and those on social media.

While Gen Z is concerned about making ends meet, they’re still spending a lot. According to Credit Karma data shared with Insider, the average Gen Z credit card balance is up 45% since March 2022. A Credit Karma survey from July 2022 shared with Insider further found that 21% of Gen Z respondents were willing to go into debt to share their experiences and purchases on social media.

All this is to say Gen Zers may be looking to invest in vacations with friends to feel wealthy instead of saving up every dollar to feel financially secure.

Are you a Gen Zer who has thoughts about what wealth means to you? If so, contact this reporter at [email protected].

Read the original article on Business Insider

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