Gen Z Making money: From Social Media Influencers to Gig Economy

They’re the most diverse, savvy, well-educated and socially responsible generation, and are expected to inherit trillions during the upcoming Great Wealth Transfer. So how are Gen Zs making money and what can we expect them to do with it?

The newest generation in town is already making big bucks, rapidly adapting to the changing times and forcing the financial services industry to fit their priorities and characteristics. So much so, that the internet is already filled with articles such as “5 money lessons millennials can learn from Gen Z”, explaining how those who were born after 1995 are improving the ways in which they make a profit. 

These include placing a strong emphasis on savings: 57% of Gen Z said they would rather save their money than spend it immediately, according to a study by Earnst and Young. And while this is also true for Millenials, often considered to be cautious and intentional with their money having entered the job market during the Great Recession, there’s much more awareness to finances coming from the Gen Zs: “Having learned from the millennials’ experiences, Gen Z may be better prepared (or resigned) to handle many of the same challenges… members of Gen Z are likely to be more proactive in addressing their debt, creating a real need for expert advice focused on debt management,” a marketwatch op-ed states.

They’re also considered good negotiators, as they try to do their research, compare prices and negotiate, and prioritize a better balance of their financial securities with personal fulfillment. To that end, travel and leisure are an important part of the work-life balance (presumably this lifestyle will return after the world sees an end to the global COVID-19 pandemic) as is sharing these experiences. 

Show me the money 

So how are they making their big money?

Generation Z young professionals are already prioritizing making money and having a successful career over having close friendships and getting married, according to a 2019 Morning Consult report. 

In fact, when applying for their first full-time job, pay continues to be the most important thing to Gen Z (54%), followed at a distance by working for a company that does meaningful work (32%) and employee benefits (30%), according to a Workforce Institute research.

Known as “Digital Natives”, Gen Z are obviously also extremely comfortable with technology, and about a quarter of them are making money online. 

From birth, Gen Z has had a unique relationship with a powerful force: modern technology. Unlike Millennials, who witnessed the introduction and rise of social media, tablets, smartphones and the mobility that allows them to access it all in an instant, Gen Z was born into it. They are true digital natives… They have never known a world where they couldn’t instantly connect and look up the answer to any question that crossed their mind. There is no need to ask anyone, or to hide from the unknown. They can figure it out for themselves in their preferred domain: online. 

-Marcie Merriman, EY

Now nearing and entering their early 20s, these young people entering the workforce place much more emphasis on individualism. Also noteworthy from the Morning Consult report is that Gen Z members are more likely to define themselves by their work, and a larger proportion has aspirations of being famous. 

Which is why their money making choices make sense, for example: Youtube as a career.

Gen Z members like to be engaged by “real people”, though two dimensional ones.  According to a 2015 Cassandra Report: Gen Z, 85% said that YouTube is their favorite site, where their time is largely spent watching young “YouTubers” — online personalities, commentators or video bloggers — rather than commercially produced content. 

According to the EY study, YouTuber Felix Kjellberg, better known as PewDiePie, is one of the biggest hits. PewDiePie dropped out of college and sold hot dogs to finance his game playing. He earns over $4 million a year in ad sales by playing video games and narrating along with the action, and over 107 million subscribers watch.

When it comes to content creators, Gen Z wants more than aesthetics, write Open Influence. 19 year-old Youtuber Emma Chamberlain, for example, is considered the most important YouTuber today.  She was initially dubbed the “anti-influencer” by breaking into the industry with random and vulnerable stories, filming herself on a whim and without a fancy graphic designer or editor. 

Influencer culture has become the trend among Gen Zies. These days, 86% of them say they follow influencers who try to make the world a better place, and prefer those that are closer to their own age and could very well be their close friend. Almost half (44%) of Generation Z has made a purchase decision based on a recommendation from a social influencer, compared with 26% of the general population, researcher Kantar found in a consumer study.

And while headlines were quick to proclaim that the COVID-19 pandemic had ended the influencer culture (Wired. Vanity Fair. The New York Times.) it is still very much so the golden age of influencer marketing 

What’s the Gig Idea?

However the Gig Economy isn’t as synonymous with Gen Zs as one might think. The Workplace Institute research that examined attitudes of Gen Z in workplaces, found that “Gen Zers are split down the middle on whether they prefer traditional or gig work.” In fact, less than half (46%) of Gen Zers work gig jobs today and the majority (75%) work just one job. 

Still, they crave the independence, flexibility and fast pace of the gig economy, and though they are surprisingly universally eager for stability, they’d prefer the absence of a boss or management to impress.

Their emphasis on salaries, cash rewards and bonuses is also a big factor in dissuading Gen Zs from engaging with gig work: Nearly half (46%) cite unpredictable pay, or lack of a “steady paycheck,” as a key hesitation, compared to less than a third (29%) who consider pay one of gig’s appealing qualities.

The pandemic year of 2020 might have changed that course, though, whether freelance or gig work was Gen Zs first choice or not. “despite these fears, more employees in this younger workforce are making the leap to gig work due to concerns about COVID-19,” writes Amanda Ampierrez, with traditional office work seeming less and less appealing. 

When it comes to investing

Remember tech savviness? The fintech world is aware of those numbers too, and companies like controversial brokerage firm Robinhood had targeted young potential investors with mobile-first offerings. With trading done on its app and via a simple interface and no customer fees to buy stock, no wonder it’s considered one of the pandemic’s standout economic successes, dubbed the “Robinhood Phenomenon”. 

One of Robinhood’s ads (currently available only in the US)

But the low-cost American trading platform has also seen backlash, “described as “financial dynamite” for its potentially dangerous mix of marketing to inexperienced investors and its low barriers of entry to the market,” writes Aleks Vickovich, resulting in the suicide of 20-year-old student Alexander Kearns (and Robinhood’s founders since responded by pledging major changes to their options trading), an investigation of the company and its founders hauled in for questioning in the US Congress.   

Generally speaking, Gen Z is often more conservative with their investments than Millennials and other generations that came before them. “They tend to go for smaller but more consistent wins and are likely to see their efforts pay off over time” said Dallen Haws, financial planner at Haws Financial Planning. Yet the COVID-19 outbreak has once again changed usual trends, and now many Gen Zs started investing during the pandemic because they “had no other employment” and saw trading stocks as a method of earning an income, according to an eToro survey.

Robinhood of course is not alone in its attempts to reach out to Gen Z investors. “E-Trade, TD Ameritrade, Charles Schwab, Interactive Brokers, Fidelity and even Merrill Lynch have all embraced commission-free trading and zero-minimum balances in an effort to attract younger customers, many of whom have little understanding of the securities and markets they are dabbling in,” Sergei Klebnikov writes for Forbes.

Other digital solutions aimed at Gen Z include crowdfunding and specific banking platforms which offer technology, access and convenience, such as Step – the no-fee digital bank for teenagers – which recently announced its latest brand ambassador campaign, partnering with mega TikTok influencer Charli D’Amelio.

Gen Zers also tend to focus on the impact of their investments and seek for socially responsible investing. The era of information they were born into had yielded access to knowledge of where the money actually goes to, and these young investors want their financial gains to include a positive impact on the world.

Shachar Peled is a foreign affairs multimedia journalist, currently the Europe Correspondent for Israel’s News 13 and a contributor to Haaretz newspaper. She’s a former CNN producer and writer and part of the launch team of media startup i24news. For over six years, Shachar had served in Israel’s top intelligence agencies; as a lieutenant and team manager in Unit 8200 and a technology analyst for the Shin-Bet. She holds a Masters degree from the Columbia University School of Journalism.
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