Is it too complicated to invest in?
Asking Proakatemia students about their financial habits, I found out many people already invest in something. The average found was 5 out 10 people have some sort of money applied. It can be in stocks, cryptocurrency, or something else. Still, I was surprised by the familiarity of this group with investments and the “taking action” investing. My assumption at first was that Millennials and Gen Z (Generation Z) don’t invest at all because I haven’t seen a lot of movement in applying for money in my bubble of known people. It turns out that Gen Z is quite aware of their possibilities and a good percentage is confident to invest.
There are many new terms to learn around the finance world. Stock, share, bond, rate of return, mutual funds, hedge funds, capital gains or losses, day trader, margin, etc. If you don’t some of these terms, don’t worry. You don’t need to have deep investment knowledge to start an adventure in investing world. An article on Investopedia showed that 54% of Gen Z invest in something and only 31% feel confident to explain what and how the investment market works.
I was happy to find this research result and learn that my small survey among my classmates was pretty accurate. If around 50% of Gen Z is already investing, why the remaining group still doesn’t do? (Investopedia, 2022) As we saw, only a low percentage of the group feel confident to explain the stock market. While there are the pros sides of access to the internet and information, the cons act directly with the positive side. Way too much information available, way too many options to follow, and way too many opinions to trust. It is hard to know where to start and who to trust.
Only 46% of the Investopedia interviewee feel confident about their financial knowledge.
FIGURE 1. Gen Z is Least Confident About Their Financial Knowledge (Investopedia, 2022)
There are many plausible reasons why there are so many young people not investing yet. I include myself, even being a Millennium. After moving to Finland, I found myself having no idea where and how to invest. In Brazil, I started early. In my first official job, back at 20 years old, I followed the market, I knew trustworthy websites, and I invested in cryptos and mainly in governmental funds. I sold everything to buy my flight ticket to Europe and keep my expenditures for the first months. It has been now 4 years since I arrived in Finland and only now I decided to find out how to invest because I simply don’t know how to start.
FIGURE 2. Most Gen Z Who Aren’t Investing Say It’s Because They Don’t Know Where to Start (Investopedia, 2022)
My first step in this investing learning journey was to ask around. I’m not going to lie, I received quite poor knowledge from my school’s colleagues. It was always like talking about something too distant, too dangerous that I should not get close to. Even when we had some investing dedicated classes or paja (training sessions in Proakatemia), it was still too distant to support my first steps.
The second step was to search on the internet. I’m a software developer, to Google something should be my core skill once I do it most of the day. Although, I still failed. The low quantity of information in English and my Finnish skills are far from the financial vocabulary level. The best I got was a list of Finnish websites to trade but it didn’t give me enough trust to simply open an account and send money to it.
My third try was an accident. Talking about investments with a work colleague, he shared about a platform called Lysa. It is a Swedish company that makes investment decisions automatically based on your investment profile. So, after opening an account, you reply to questions about taking risks to understand how conservative is your behavior towards investments. For example: Would you remove all your money from the account in case of a 3% drop? This was simple. Someone I trust gave me the service, the creation of an account was easy (connected to the Finnish bank ID) and I don’t even need to decide where I will invest.
Writing this essay, I felt I still lack on investing in Finland knowledge. I was still concerned about taxes and wondering about what platforms people are on when they day-trade or want to make a long-term investment for their loved ones as their kids. In my work, we use Slack to communicate. We have dedicated channels for teams, clients, and specific subjects. Some of them are quite random just like #futu-random or #remote-life. So, I wondered: is there a personal finance-related channel? Yes.
Here there is a “turnover”. Tips, ideas, discussions, videos, concerns, etc. All the information I had researched so far was lying there all this time. As in the company we have many foreigners living in Finland who shares the same struggles it was easy to share the same questions already brought up. Everyone in the channel is looking forward to making their financial life healthier and finding the best way of doing it. For me, a community is when there is not a facilitator replying to all the questions but when people support each other in an open platform organically with their knowledge. I felt a huge sense of community and I wished I would have found this channel in Proakatemia’s Teams other than in my work environment.
I’m still learning a lot about how to invest in the best way in Finland. I will try to share these thoughts around the school and find out if there’s the relevance of opening spaces for personal finance dialogues in Teams. I’m part of SYNTRE which is the second international team of this Proakatemia. It’s understandable there was no demand so far, but I want to make sure that not only about 50% of my team is taking action on investing. An open space to discuss and share our experiences in personal finance is valuable.
Lauria, P. 2022. Generation Z: Stepping Into Financial Independence. Read on 03.5.2022.https://www.investopedia.com/generation-z-stepping-into-financial-independence-5224362#:~:text=More%20than%20half%20of%20Gen,confident%20about%20spending%20and%20saving.