Generation Z are the largest generation ever, comprising around 20% of Australia’s population and almost 30% of the world’s population. Globally there are almost 2 billion of them.
According to mccrindle, they will make up 25% of the workforce by 2025, and work 18 jobs across 6 careers and live in 15 homes in their lifetime.
The Bank of America predicts that Generation Z (Gen Z) will be the “most disruptive generation ever” and will see their income surpass that of millennials by 2031.
While their potential is great, their skills on saving and building wealth is where the potential problems begin.
Hit the hardest during pandemic
The world’s youngest workforce entered a job market crippled by a 14.7% unemployment rate in May – greater than the 10% unemployment rate the Great Recession saw at its 2009 peak.
Among those who lost their jobs, staff aged 20 to 24 had an unemployment rate of nearly 27% when the unemployment peaked last April according to data from the St. Louis Fed, more than any other generation.
In many cases, this would affect the long-term careers of many impacting the first job out of university and ability to gain experience can have a long term effect on their careers in the workforce.
Alternative ways to create wealth
Good news is, this same generation that has been cut from the workforce are among the highest rated for starting enterprises on his or her own. Many Gen Z’ers have already embarked on an entrepreneurial path as early as their teen years, which could go a long way in wealth creation.
Investing in Real Estate has been labelled a low risk or “safe” investment. However, this generation can expect just 2% average annual real returns on their investment portfolios. By comparison, Baby Boomers, Gen X’ers and millennials have enjoyed real returns of 5% or greater.
To maximise their potential at creating a strong investment portfolio, Generation Z’ers need to have the ability to understand their finances, how to grow them and develop a strategy that will see them exceed the 2% return.
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Want to make your next financial move a good one? Then let’s start with where you’re at, and work out where you want to be. Speak to our Concierge team about developing the right strategy for you or your family to invest in a financially secure future.