More Than 2 Out Of 3 Teens Plan To Start Investing Before Graduating College Or Earlier

From 14th century Venetian money lenders to the advent of stock exchanges in London and New York, financial investing has usually been considered the reserve of the wealthy. But with the rise of the internet and a growing fintech industry, investing is increasingly seen as an option for the average citizen.

New data analyzed by Moneyzine.com reveals just how far interest in investing has spread. A survey of 13-17 year olds shows that the overwhelming majority plan to invest in the future - as long as they can overcome some core knowledge barriers.

A generation of investors

In a survey of people aged 13-17, just 20% said they were currently investing. But 91% of teens that don’t currently invest say that they plan to in the future, with more than two thirds saying they planned to start before graduating college.

A study from last year found that Gen Z was the least likely age group to participate in investing, with just 36% investing compared to 45% of Millennials, 50% of Gen Xers and 52% of Baby Boomers. Yet these new findings shed new light on those numbers.

While younger people are currently participating less, they also have less money. The world of financial products and services appears to have been normalized for this generation: 50% already use payment apps, while 49% have a bank account. This suggests that more of them will eventually invest when they are more able to.

Addressing knowledge gaps

Despite their keen interest in investing, the majority of teens still feel out of their depth. 55% say they find investing “confusing” and 72% say they have no knowledge of trading stocks and EFTs. At the same time, 47% say investing “feels out of reach” or “takes too much time/attention”. Ultimately, just 23% say they feel “confident” about financial topics.

This should not be surprising: research has shown that financial knowledge increases as people get older, with Gen Z scoring the lowest on financial literacy tests and Boomers scoring the highest. Once again, however, the differences are smaller than we might expect.

Gen Z scored 12 percentage points lower than Boomers - and just 5 points below Millennials. Given that younger generations appear to have greater interest in investing - and far more time to learn - we should expect them to become more literate over time.

It all starts in the home

Much of this will come down to how parents talk to their kids about investing. Younger people trust their family more than professional financial advisers, and teens whose parents talk to them about investing feel 9 percentage points more confident about the topic.

This has a range of knock-on effects: these teens are nearly twice as likely to open a savings account; get access to a payment app; and get a job to earn income outside the home. They are also more than twice as likely to report knowledge of researching investments and trading stocks and ETFs.

Considering the growth of social investing communities across TikTok, Reddit and other platforms, as well as media coverage of meme stocks and speculative assets, it follows that young teenagers would show a growing interest in investing. The data not only illustrates a shift in attitudes towards investing - it shows how important talking about financial matters in the home is. Parents should use this opportunity to improve their own financial literacy, and pass that knowledge on.

Luke Eales, CEO of Moneyzine.com