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Gen Z wants to retire early. They're off to a good start
- jihadjihad 3y ago> For Gen Zs, there seems to be a correlation between gambling and investing—particularly, high-risk investing. In the United States, 61% of surveyed Gen Z investors said they gamble online or in person, compared with 29% of non-investors surveyed. Their propensity for gambling is also associated with riskier investments; 70% of US Gen Z investors who gamble frequently invest in crypto, and 38% invest in non-fungible tokens. (from the CFA Institute survey cited in TFA, https://rpc.cfainstitute.org/en/research/reports/2023/gen-z-investing https://rpc.cfainstitute.org/en/research/reports/2023/gen-z-...)
- picadores 3y agoTranslated: They did not experience a stock-market crash yet and the societal memory of risky behaviour resulting in a stock market crash fades.
- anovikov 3y agoWell, there haven't been real big, bad crashes in the living memory. And anyway, this isn't what investors are worried about - they are worried about protracted bear markets.
- woodruffw 3y agoOther than 2008, you mean?
- mnky9800n 3y agoMaybe 2008 doesn't count because that's when they realized you could just print money any time the economy blinked and that would fix everything.
- apocalyptic0n3 3y agoI was a freshman in college the week that crash happened. Called my dad and asked him how he was faring and he offhandedly mentioned losing $250k in 3 days. He wasn't concerned because he was 10+ years from retirement and confident he'd make it all back with a bit of work, but it was still eye opening and it definitely affected how I chose to invest my own money as I got older. I'm much more conservative and hands-off with it than he ever was. I'm still doing well compared to my peers, but I'm behind where thinks I should be.
- Izkata 3y agoCounter to the other comment, I was in the middle of college and somehow didn't know about that until years later. After I started working in 2011 at least.
- ch4s3 3y agoHow did you miss it? I graduated in 2009 and it was the only thing people were really talking about after the 08 election wrapped up. It took a lot of people I knew over a year to find work.
- anovikov 3y agoThat wasn't a big, bad crash. It was recovered very quickly.
- dirtyhippiefree 3y agoJobless recovery…IIRC… Jobs never really came back.
- dirtyhippiefree 3y agoStarted in 2007, but that’s a quibble…
- jjav 3y ago> Other than 2008, you mean? To state the obvious, 2008 was 15 years ago. So someone who was a senior in high school at 18 in 2008, is over 30 today. So it is true that there's a generation that includes everyone in their 20s and those in their early 30s that have never experienced a significant market crash.
- woodruffw 3y agoThis is a pretty myopic definition of “experienced.” I was in middle and high school through the GFC, and watched my friends and family lose their jobs and worry about their livelihoods.
- jjav 3y agoThe topic is stock market investment expectations which is not the same. The market can be going up even as unemployment rages. The vast majority of middle schoolers were not trading stocks in 2008. To have experienced one downturn, a trader must've been trading back in 2007/early 2008. It is safe to say most traders in their 20s today were not active traders back in 2007. I'm sure exceptions exist.
- coldtea 3y agoWell, from what I've seen the propensity for gambling increases in post-crash poor societies...
- deaddodo 3y agoI was literally going to point this out but missed it in the article. All of my "Gen Z" family and colleagues invest, certainly, but many "invest" in the same way a millennial invests when they visit Las Vegas.
- deleted 3y ago[deleted]
- bitwize 3y agoI'm reminded of the midwit meme. Low end of bell curve: Invest in index funds Hump of bell curve (midwits): STONKS!!! High end of bell curve: Invest in index funds
- sonicanatidae 3y agoTheir increased appetite for risk has to do with the world they were handed. Homes are unaffordable, payroll has not kept up with inflation, politics seems hell bent on ending any and all aid programs, to provide funding for tax cuts to people that pay less than I do in taxes already, while making many, many more 0s.
- gedy 3y ago> Gen Z started saving for retirement at the median age of 19, earlier than any other generation ? Median? These numbers seem unrealistic for anyone I know who went to college, and those who didn't are in low pay jobs with no retirement plan
- uncletaco 3y agoThe study said four in five gen z investors. I wonder how many of those gen z investors maybe bought a little crypto along the way when it was a fad.
- Ekaros 3y agoOr got Robin Hood account and deposited minimum amount of money to speculate on whatever...
- not_the_fda 3y agoYes, thats what they mean by "investing". I don't consider meme stocks investing, but I'm a grumpy Gen Xer.
- unforeseen9991 3y agoThat's because it's not investing, it's speculating at best, and usually just gambling. Investing is just another word we've lost in recent years from people trying to justify to themselves that they aren't acting like fucking idiots. Reminds me of Carlin's bit about the softening of language.
- Ekaros 3y agoAlso median of 19. Meaning quite good bit would have started saving before age of 18 right? That sounds off... Considering what type of jobs they would have had.
- PurpleRamen 3y ago
- randomdata 3y ago> Given that financial advisors say that Gen Z will need roughly $3 million for a 20-year retirement — a high bar even for smart money managers If we assume a 2% inflation rate going forward, that's only ~$600,000 in today's dollars. Seems like a relatively low bar, no?
- hiatus 3y agoI think that is 3 million now, not 3 million by the end of the retirement period.
- randomdata 3y agoIf we assume they have three million now, in 40 years when they have 20 years of retirement left, assuming it sees a 5% annual rate of return, they will have $21 million. Are you suggesting that they actually need ~$21 million for a 20 year retirement?
- hiatus 3y agoI'm saying the article is saying they need 3 million before entering retirement.
- randomdata 3y agoYes, that's right. Assuming a typical lifespan, they will have 20 years left in ~40 years. Assuming a 2% inflation rate, $3 million in 40 years is equivalent to ~$600,000 today. A 60 year old holding $600,000 today does not seem like that high of a bar.
- JohnPrine 3y agoHe means the article is saying they will need $3 million in today's dollars to retire
- 3y ago
- knallfrosch 3y ago1. Does all of this just rely on surveys instead of real data? 2. Investing for old age retirement is seen a necessity, since many people in my generation (Germany, 1989) don't believe they'll get pensions above what everyone gets as social safety net anyway. 3. Since nothing relies on actual numbers, it's hard to tell whether GenZ is just more savings-conscious, as compared to really saving more. A boomer that bought a house on credit in the 70s invested more than a comparable GenZ who invests in an ETF what little money they have left after paying rent. 4. With most GenZ working safe desk jobs - which goes easy on their health and is also easier to do in old age - I doubt they will have to retire as early (let alone even earlier!) as the generations before them.
- sublinear 3y ago"There's a sucker born every minute" - P.T. Barnum
- antoineMoPa 3y agoGen Z's are working now? Makes me feel so old.
- Mistletoe 3y agoI read FIRE subreddits a lot and see a little too much optimism and unreasonable expectations. They are ready to retire with just another decade of incredible stock market returns. It’s rarely that easy. All signs point to another lost decade coming, like after 1968 and 2000, that is going to break a lot of hearts I’m afraid. Unless they plan for it appropriately and have reasonable expectations. https://financial-charts.effingapp.com/ https://financial-charts.effingapp.com/ https://www.currentmarketvaluation.com/models/buffett-indicator.php https://www.currentmarketvaluation.com/models/buffett-indica... https://www.currentmarketvaluation.com/models/price-earnings.php https://www.currentmarketvaluation.com/models/price-earnings... https://www.currentmarketvaluation.com/models/s&p500-mean-reversion.php https://www.currentmarketvaluation.com/models/s&p500-mean-re...
- spacemadness 3y agoI couldn’t stand being around anything FIRE related mid way into The Fed’s free for all near 0% interest rate decade. The influencers were the ones making money by spreading lies and shame and everyone else seemed to be scrambling to be another influencer. A lot of those influencers came from money and had inheritance already, and/or had very high paying tech jobs, but hid that well to give hope to their readers.
- I_Am_Nous 3y agoThe main thing I question about FIRE is...how many people can achieve FIRE and live off the stock market returns, essentially contributing very little to society, before society is unable to sustain the "parasitic" load they generate? Someone retiring "normally" around 60-70 has traded their labor for money, usually in ways that can benefit other people in some fashion. When they retire, there are multiple benefits -- their previous position opens up, hopefully allowing the next generation to be promoted. Their years of experience help shape the way the next generation runs the business, hopefully because they know why things are the way they are (Chesterton's Fence) and can pass that information along. This is pending the retiree not being a serial job changer of course, institutional knowledge requires people staying to learn it. Compare that with someone who worked as little as they had to, achieved FIRE and retired early at 30. They didn't "pay into" an organization, they just extracted value and retired. They didn't help lead anything. They didn't shape the culture for the next generation. And at the risk of stereotyping, I imagine "succeeding" in FIRE would inflate one's ego in very unhealthy ways. I don't want to say "FIRE is evil" but SOMEONE has to create the value they are extracting, and if it reaches a tipping point where more are extracting than creating, it will make for a novel problem. Replacing workers with AI is an obvious stopgap, but that just perpetuates the current, weird monetary system we have and that profit would have to be redistributed as UBI or something for it to replace workers in a way that they don't just starve. Society is changing and it's gonna change even more so it will be interesting to see where we end up.
- eunice 3y agoa disturbing amount of the gen-z i know are full on NEET
- momirlan 3y agoyou mean like youtubers, tik-tokers, influencers ... ?
- I_Am_Nous 3y agoI don't know that I would put youtubers in that category, there are a lot of youtubers who put a ton of effort into their channel and make it a business. Tik Tokers could qualify, guess it depends, but influencers can easily be either or. Making yourself into a brand takes effort but I would argue that most of the time it isn't effort that makes other people's lives better.
- jzb 3y agoGen Xer here. I also want to retire early, but... not off to a good... middle? That's in large part my own fault - it wasn't even a consideration or on my radar for a very long time. I came from a blue collar background, hand-to-mouth background. We were, as John Scalzi would say, "broke" but not quite "poor." My parents didn't retire so much as age out of the workforce and scrape by. Hope Gen Z'ers do better than I have...
- nativespecies 3y agoSame, but broke millenial here. Will be working until day I die, likely. Sucks. Never had the momentum to accumulate wealth, and now I have no idea what to do.