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This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional.
The U.S. Bureau of Labor Statistics data has recorded increasing “quit levels and rates” since 2021 — these resignations have at times been conflated with the idea that people are leaving the workforce entirely. In September of 2021 alone, 4.4 million people quit their jobs. Studies point to Gen Z and millennial workers as the driving force behind the mass exodus.
Though many are leaving their current positions, they are still planning for the future. Twenty-five percent of adult members of Gen Z polled in a recent Goldman Sachs survey said they are planning on retiring before the age of 55. For many, job losses and difficulty finding job prospects, coupled with a desire for better control over work hours, pay, and location, have driven them to quit their current jobs and consider entrepreneurship.
What is the F.I.R.E movement?
F.I.R.E., an acronym that stands for “Financial Independence, Retire Early,” suggests followers set somewhere between 50 to 75% of their income aside to save and invest it so they can retire in their 30s and 40s.
This financial concept, first mentioned and popularized in the 1992 best-selling book, “Your Money or Your Life,” by Vicki Robin and Joe Dominguez, features an extreme savings and investment plan.
Gen Z looks for a new way to manage finances
Access to the internet and social media has been prevalent in the lives of Generation Z, a group made up of individuals born roughly between 1997 and 2012 (aged 10 to 25 in 2022). A recent Bank of America survey found that 70% of adult members of Gen Z focused on savings and gaining financial literacy amidst the pandemic. In fact, among those polled, 70% of the group added to their savings in the past year. Of those, 26% contributed to a retirement account or invested in the market.
The F.I.R.E. movement has experienced a recent resurgence in popularity as adult members of Gen Z are focused on saving money, retiring earlier, and having more control over a potentially shorter career by maximizing time and opportunity.
Gen Z investors look predominantly to social media for information on investing and use a wide range of investing apps to execute their trades. While social media platforms like Reddit, TikTok, or Instagram were used by 91% of Gen Z investors polled in a recent Motley Fool survey, government and industry certified sources (i.e., SEC filings, professional financial advisors), traditional media, and blogs also ranked highly.
Despite sourcing much of their investing information from social media, traditional investing websites and F.I.R.E. blogs were perceived as trustworthy by over 70% of Gen Z surveyees while TikTok videos, Instagram, and Twitter posts were perceived as trustworthy by 30 and 50%.
In a recent survey, 53% of surveyed Gen Z respondents were interested in running their own business. This number rose to 65% for those already in the workforce. Whether you are a Gen Z entrepreneur or looking to hire staff in the Gen Z age range, understanding the range of ways some of this demographic is approaching personal and business finances can help better inform your business decisions.