Key Highlights:
- More than 60% of Americans feel they are in a better position
to achieve their financial goals than the generations that came
before them.
- Nearly three in five Americans are investing today.
- Investing participation is higher among older generations, but
younger generations are beginning to invest sooner.
- More than a quarter of Gen Z were taught about investing in
school, significantly more than older generations.
- Just 36% of Americans have a written financial plan.
More than 60% of Americans feel they are in a better position to
achieve their financial goals than the generations that came before
them, according to Schwab’s eighth annual Modern Wealth Survey, an
examination of how Americans think about saving, spending,
investing and wealth. This optimism is most pronounced among
Boomers, with 66% believing they are more or as likely as older
generations to reach their goals. However, every generation
surveyed showed a similar level of confidence when asked to compare
themselves to previous generations—Gen X (63%), Millennials (62%)
and Gen Z (60%).
One factor likely driving this positivity is a surge in the
number of Americans investing in the stock market. Schwab’s survey
shows that almost three in five Americans (58%) are investing
today, in line with recent Federal Reserve data that shows the same
proportion of American households that own stocks—either in mutual
funds, retirement accounts, or as individual shares. The Federal
Reserve data is up from 53% in 2019 and the highest on record.
In fact, when asked why they are in better financial shape than
previous generations, the Schwab survey indicates that Americans
believe they have more ways to build wealth (50%), increased
accessibility to investing (46%) and additional investment options
available to them (46%).
Among Gen Z in particular, the top reason for increased
financial confidence is improved access to investing. This
generation, which starts with those born in the late 1990s, began
saving and investing when they turned 19 years old on average,
nearly half the age of when Boomers started investing (35),
according to Schwab’s data.
All Americans
Gen Z
Millennials
Gen X
Boomers
Investing today
58%
45%
54%
58%
63%
Age started investing
30
19
25
32
35
Reasons Americans feel they’re
more likely to reach their
financial goals than previous
generations
All Americans
Gen Z
Millennials
Gen X
Boomers
There are more ways to build wealth
now
50%
40%
44%
45%
68%
Investing is more accessible now
46%
42%
40%
43%
58%
There are more investment options now
46%
41%
39%
41%
64%
There is better financial technology
now
45%
38%
44%
43%
56%
Financial education is more available
now
43%
31%
41%
48%
51%
When comparing themselves to their parents at their age, more
than half of all Americans surveyed believe that they are doing a
better job at investing (51%), and they also feel they’re living
their desired lifestyle more than their parents did at their age
(52%).
“There has never been a better time to be an investor, and it’s
a very positive sign to see that more Americans than ever before
are engaged with their personal finances and taking steps to build
long-term wealth, in particular younger generations who are getting
started with saving and investing earlier in their lives,” said
Jonathan Craig, Head of Investor Services at Charles Schwab. “We of
course saw the number of Americans investing go up during the
pandemic, but there are a lot of factors driving this trend that
were in place before that and continue to drive engagement today.
Industry changes like lower costs and minimums to invest and get
advice, broader access to sophisticated platforms and tools, a
proliferation of investing information such as research and
educational content, and significant product innovations have all
made investing more accessible than ever before. Creating access
for more people to become investors was Schwab’s core mission when
our firm started more than 50 years ago, and it’s still at the
heart of everything we do today.”
Investing Information Age
Across all generations, nearly 70% of Americans are confident in
their investment strategy, and the availability of financial advice
and knowledge (51%) and the ability to easily research companies
and investments (37%) are cited as the top reasons. Gen Z, who are
the most confident of the generations (71%), say that learning
about investing at an early age is the biggest reason for their
confidence, and more than a quarter report that they were taught
about investing in school, significantly more than older
generations. In fact, roughly half of all those who are not
confident in their investment strategy say that not being taught
about investments at a young age by parents or family or not being
taught about investments in school are their top reasons for lack
of investing confidence.
Reasons Americans are
confident in their investment strategy
All Americans
Gen Z
Millennials
Gen X
Boomers
Financial advice and knowledge are readily
available
51%
38%
46%
56%
55%
It is easy to access research about
companies and investments
37%
35%
34%
37%
39%
It is easy to access investments
33%
34%
35%
28%
35%
I learned about investing at a young
age
27%
43%
31%
26%
18%
I was taught about investments in
school
16%
28%
19%
12%
9%
In addition to taking advantage of more widely available
investment advice, educational resources, and investing tools,
American investors today, particularly younger ones, are also
exploring a wider range of investing strategies. Though buy and
hold (56%) and growth investing (53%) are the most common
approaches, Schwab’s survey shows Americans are also integrating
more recent innovations in the investing space such as fractional
share investing (37%), direct indexing (32%), socially responsible
investing (31%), automated or robo-advisor investing (28%), and
thematic investing (25%) into their strategies.
“Investing is becoming a passion for an increasing number of
Americans—they are more engaged than ever with their investments
and are taking advantage of all the information and knowledge at
their fingertips,” said Rob Williams, CFP®, Managing Director of
Financial Planning at Charles Schwab. “The result of this
engagement and access to investing education and resources is a
more sophisticated, more knowledgeable, and most importantly, more
financially confident population of American investors.”
Investing strategies Americans
currently implement
All Americans
Gen Z
Millennials
Gen X
Boomers
Buy and hold
56%
57%
59%
48%
60%
Growth investing
53%
57%
56%
51%
49%
Fractional shares investing
37%
48%
48%
33%
25%
Direct indexing
32%
44%
42%
26%
23%
Socially responsible investing
31%
43%
45%
27%
17%
Robo-advisor investing
28%
40%
41%
25%
11%
Thematic investing
25%
41%
41%
20%
9%
The Planning Gap
When it comes to financial advice, Americans are more likely to
engage with a professional financial advisor (59%) or family or
friends (57%) than social media platforms (42%) according to
Schwab’s survey.
In fact, most Americans don’t follow any social media
influencers for financial advice (76%) and remain skeptical about
social media's effectiveness in making it easier to manage their
money. Nearly two-thirds feel that social media has had no impact
on managing their investments, and less than a quarter (24%) feel
it has made it easier. Most grade social media platforms the lowest
relative to other sources of financial advice.
How Americans grade sources of
financial advice
A/B
D/F
Professional financial advisor
76%
9%
Accountant
68%
13%
Investment firm
68%
12%
Family
44%
23%
Friends
35%
28%
Reddit
20%
54%
TikTok
17%
64%
Twitter/X
16%
65%
Despite increased access to investing, education and advice,
those surveyed acknowledge that there’s more they can do, with
fewer than one in five Americans (18%) overall saying they are
currently on top of their finances. Nearly one-third (32%) feel
they are on track to being more on top of their finances and
another one-third (34%) feel they need to make changes in order to
feel more in control.
One key area for improvement among Americans is financial
planning. According to Schwab’s survey, only 36% of Americans have
a written financial plan. Among those who do, three in four say it
makes them feel more in control of their finances and nearly all
(96%) say they feel confident that they will reach their financial
goals.
Among those who don’t have a plan, most say it’s because they
don’t have enough money (43%), it’s too complicated (25%) or they
don’t have enough time (21%).
“Investing and financial planning are more accessible and more
affordable today than ever before, and while we see that Americans
are making great strides with their personal finances overall,
there is still room for improvement when it comes to more
formalized financial planning,” said Williams. “Once clients start
the process, they realize a financial plan isn’t just a document to
file away. Whether you get started with a do-it-yourself digital
financial plan or in-depth conversation with a planning
professional, financial plans today include interactive digital
planning tools to help monitor progress and understand how changes
in your life goals or circumstances can impact your plans.”
About the Modern Wealth Survey
The online survey was conducted by Logica Research from March 4,
2024, to March 18, 2024, among a national sample of 1,000 Americans
aged 21 to 75. An additional 200 Generation Z Americans completed
the study. Quotas were set to balance the national sample on key
demographic variables. Detailed results can be found here.
Disclosures
The information here is for general informational purposes only
and should not be considered an individualized recommendation or
personalized investment advice. The investment strategies mentioned
here may not be suitable for everyone. Each investor needs to
review an investment strategy for his or her own particular
situation before making any investment decision.
All expressions of opinion are subject to change without notice
in reaction to shifting market, economic or geopolitical
conditions.
About Charles Schwab
At Charles Schwab we believe in the power of investing to help
individuals create a better tomorrow. We have a history of
challenging the status quo in our industry, innovating in ways that
benefit investors and the advisors and employers who serve them,
and championing our clients’ goals with passion and integrity.
The Charles Schwab Corporation (NYSE: SCHW) is a leading
provider of financial services, with 35.4 million active brokerage
accounts, 5.3 million workplace plan participant accounts, 1.9
million banking accounts, and $8.85 trillion in client assets as of
April 30, 2024. Through its operating subsidiaries, the company
provides a full range of wealth management, securities brokerage,
banking, asset management, custody, and financial advisory services
to individual investors and independent investment advisors. Its
broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD
Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC,
https://www.sipc.org), and their affiliates offer a complete range
of investment services and products including an extensive
selection of mutual funds; financial planning and investment
advice; retirement plan and equity compensation plan services;
referrals to independent, fee-based investment advisors; and
custodial, operational and trading support for independent,
fee-based investment advisors through Schwab Advisor Services. Its
primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC
and an Equal Housing Lender), provides banking and lending services
and products.
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