Zoomers grew up with smartphones, the internet, and social media during difficult times like the 2008 economic crisis and Great Recession, and the subsequent protest movement, Occupy Wall Street. And 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’?
First coined in 2021 by Demetri Kofinas, the host of the Hidden Forces podcast, “financial nihilism” is a trend that describes how Gen Z, and even some younger millennials, who are profoundly disillusioned with the traditional financial system, believing its unfair and unpredictable—finding it pointless to save for retirement or invest in the stock market or in bonds, or other conventional ways—given the state of things such as: stagnant wages, the soaring cost of living, massive student debt, and the difficulty of homeownership.
Basically, they believe the “American Dream” is a scam, and 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, Gen Z are gravitating to more rewarding, but riskier strategies like crypto currencies, from bitcoin to “meme” coins, meme stocks, and sports betting platforms, according to CNBC, which reported Gen Z is the most likely generation to say they were 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 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.”