Gen Z is deep in ‘financial nihilism’: Why young people are betting big on stocks and crypto
It’s no secret that Gen Z has a less optimistic economic outlook, and a different take on investing, than older generations.
Jennifer Mattson
It’s no secret
that Gen Z has a less optimistic economic outlook than older
generations. So it’s no wonder many of them are engaging in so-called
financial nihilism, applying a gloomy outlook to their financial
mindset, resulting in a new and different take on investing.
Zoomers
grew up with smartphones, the internet, and social media during
difficult times like the 2008 economic crisis and Great Recession, and
the subsequent Occupy Wall Street protest movement. As such, they’re
disillusioned with traditional ways of doing things, which extends to
how they invest and conduct their own finances.
What is “financial nihilism”?
Coined in 2021 by Demetri Kofinas, host of the Hidden Forces podcast, financial nihilism
describes how Gen Z and even some younger millennials are profoundly
disillusioned with the traditional financial system, believing it’s unfair and unpredictable,
and are finding it pointless to save for retirement or invest in the
stock market or in bonds or in other conventional ways. It appears to be
a response to stagnant wages, the soaring cost of living, massive
student debt, and the difficulty of homeownership, among other modern
challenges.
Basically, they believe the American dream is a scam, and they’re worried they may have to live with their parents forever, without ever owning a home.
Gravitating to crypto, meme stocks, and ETFs
Instead
of playing the stock or bond markets in traditional ways, Gen Z is
gravitating to more rewarding but riskier strategies like investing in
cryptocurrencies including Bitcoin and “meme” coins, as well as meme stocks and sports betting platforms, CNBC reported.
According to the outlet,
Gen Zers are more likely than their older counterparts to say they are
either curious about or planning to invest in cryptocurrencies over the
next five years, per a recent U.S. Bank survey.
In short, what we are seeing is a loss of faith in the real value of money and the function of the market.
Perhaps Andrew Edgecliffe-Johnson summed it up best when he said: “It’s hard to fault people for wanting to get rich quick if they have lost faith in their ability to get rich slow.”
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