Here's Why Gen Z Gets Its Investment Advice From Social Media
Gen Z uses social media for many things, including learning about investing. Here's why that might be.
Now more than ever, young people are turning to the internet and social media to gain new knowledge on various topics, including personal finance matters.
In April 2021, we conducted a survey of Gen Z and Millennial investors to learn more about what tools they use to learn about investing and how they invest. Results show that 91% of Gen Z (ages 18 to 24) use social media for investment advice. This is more than any other source of knowledge on the topic, including:
- Other sources, such as friends and family, podcasts, traditional investing sites, other (67%)
- Television and newspapers (34%)
- Blogs (25%)
Keep reading to see why Gen Z gets its investment advice from social media:
Four reasons Gen Z turns to social media for investment advice
When it comes to investment advice, here are the popular sources of social media content that Gen Z use most:
- YouTube videos (71%)
- Reddit forums (42%)
- TikTok videos (36%)
- Twitter posts (32%)
- Facebook groups and posts (28%)
- Instagram posts (27%)
Since 18- to 24-year-olds use social media in many aspects of their daily life, it's not surprising that they would turn to social media for investment information. But what are some other reasons why this might be?
Here are some ideas:
1. Social media content may be more relatable
Young people may find that they can relate to the news and advice they're watching or reading when the message comes from people of a similar age and experience. They can spend time sifting through content to find what they relate to most.
For many, social media content may feel more relatable because they feel like a part of a community. They can consume information, while chiming in and sharing their experiences and thoughts. It may feel like they're learning more, because it's a collaborative experience. That kind of participation isn't possible when you read about investing in a book or newspaper.
2. It's easier to digest bits of content at a time
When it comes to social media content, it's often broken down into bite-size chunks of information. This can be easier to digest, especially when it comes to investment knowledge, which can take time to learn.
3. Social media content is entertaining
A lot of social media content is photo- or video-based. That can be more entertaining to look at rather than reading a long written explanation about how to invest. When we looked at our survey results, we found that video content was a popular choice among young investors, especially when it came to Youtube videos.
As mentioned above, 71% of Gen Z uses Youtube to get information on investing. It's likely that the entertaining aspect of these videos keep them coming back for more knowledge.
4. Social media provides a variety of content that can be consumed on the go
Social media is convenient because it can be used anywhere. Gen Z may prefer to consume investment advice through social media because they can do so while on the go. Young people are busy and often on the move.
With the use of their phones, they can easily open apps throughout the day. They can also look at a mix of social media platforms to consume content. In our survey, we found that young investors preferred to use a variety of apps as opposed to just one app or social media source.
Here are two data points that help to prove that theory:
- Thirteen apps were used by at least 10% of Gen Z and Millenials
- No single app was used by more than 37% of young investors
No matter how Gen Z chooses to get their investment knowledge, it's clear that they're prioritizing learning about saving for the future.
If you want to learn more about investing and aren't sure where to begin, we have plenty of resources to help. If you're new, be sure to look at our beginner's guide to brokerages before investing in the stock market.
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