Remix: Why Generation Z Is Considered to Have a Higher Risk Mindset Than Any Other Generation
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Generation Z is of great interest to psychologists and businesses from every field. That is because they are the first digital natives and the most diverse generation in history, who grew up in the social media age and did not know the world before the Internet.
Generation Z members are more likely to pursue higher education, aspire to start businesses and value practical skills over certification. They are also characterized by spending hours in front of computer, tablet, or phone screens, having a propensity to multitask, and being super socially conscious.
Gen Zers are also more likely to identify as politically progressive, advocate inclusiveness, value authenticity over brand reputation, and be open about their mental health. They are super comfortable taking risks online as well. The latter is evident by their propensity to gamble remotely on things like slots and sports and investing in cryptocurrencies, risky propositions in line with their entrepreneurial spirit.
Understanding the Gen Z Risk Mindset
Generation Z members are those born between 1997 and 2012, and their outlooks on life have largely been shaped by their growing up in a time of rapid technological evolution, coupled with the shifts the rise of social media and demographic changes have brought about.
Unlike those before them, Gen Zers have faced unprecedented exposure to news and information via digital platforms. They have gotten bombarded with tales of doom and gloom but also ones of opportunity. That has led them to be pragmatic and willing to embrace new trends. Per a new Stilt study, almost 94% of crypto buyers now are either Millennials or Gen Z members. Moreover, individuals from these two groups seem to buy digital assets, even though they have higher debt levels than the US average.
Many credit their propensity for impulsivity to the video game sphere, which has hooked them to risking financial overextension through products like loot boxes and in-game purchases that enhance the gaming experience, and social media increases their fear of missing out, which, no doubt, has negatively impacted their mental health. This has even encouraged the online casino industry to create a new form of games not based on staking money on bets but that rely on mobile gaming gamification strategies of earning points from competing against others daily, like, for example, free online slot tournaments and play money poker tournaments. These games are called social casinos and are very popular on mainstream mobile stores and social media platforms because they simulate casino games.
However, studies do indicate that Gen Zers are less prone to engage in traditional risky behaviors, such as alcohol and drug consumption. Going by a 2023 Gallup survey, drinking in adults aged forty-five or below has dropped ten percentage points in two decades.
Financial Risk and Entrepreneurship in Gen Zers
Based on a 2020 WP Engine study, 62% of Gen Zers are hoping to get a business of their own up and running today, and more novel Square research puts this figure at 84%, with most Gen Zers stating plans on putting their savings to get their business off the ground. Without question, most young adults now, more than ever, are leaning into entrepreneurial opportunities and are looking at classic nine-to-five jobs as passe. They also display a massive propensity toward online business, as according to the noted Square survey, 84% of those polled plan to begin a business endeavor in the digital sphere, primarily with a mobile component involved.
Also, the Finra Foundation posted a report in mid-2023, which claimed that 46% of Gen Z investors now worldwide are more willing to take risks than previous generations, with the foundation’s researchers noting a massive interest by Gen Zers in cryptos and NFTs. So, they display quick adoption of novel tech and understand their growth potential.
Moreover, unlike those before, they are more likely to act on their impulses. The most common reasons for Gen Z unplanned purchases they have reacted to buying things on a whim are to take advantage of a deal (43%), as a means of self-reward (39%), and to explore new things (37%).