Questions from my Gen Z kid about money

Recently I asked my son Reid if he had any financial questions. As a writer he responded with a slew which I am addressing in this week’s blog. (Photo is our family in December 2024.)

First of all, Gen Z’s come after Millennials and before Generation Alphas. They were born in the late 1990s to early 2010s, making them about 13 to 28 years old. The older end of Gen Z’s has finished college and are entering the workforce. As with most generations, Gen Z’s think about money and finances differently than prior generations. 

(Not a GenZer? Please forward to a friend or family member who is.)

Here are the questions: 

Q: “Is there any truth to making money in the stock market, or is it all luck and scams?”

For someone who is just beginning to learn about investing and the stock market, it could very well appear to be ‘all luck and scams.’ But there is a reason why so much interest has been devoted to investing in stocks over the past 100 years. Stocks, which represent a partial ownership interest in a company, have provided some of the most attractive returns over the long term. 

For example, the 10-year annualized return for large, US stocks was 12.5% through March 7, 2025.[1] That’s an AVERAGE return of 12.5% over the past ten years which happened to be a pretty good period. Some years were better and some were worse—or even negative—during this period. 

However, with higher potential returns comes uncertainty about whether you will make money at all. As it is often said, ‘past performance is no guarantee of future results.’ In other words, there are definitely periods when you could absolutely LOSE money, especially in the short term. If you can invest for the long-term, e.g., 3-5 years or longer, you improve the likelihood that you will make money by investing in stocks. 

As with any investment, you need to consider your appetite for risk (e.g., ‘Can I afford to lose this money?’), and whether you have other more immediate or important needs (e.g., ‘I need to buy a car next week to get to my new job’). 

Stock investing is best suited to money that you can leave alone for a long time. 

Q: Is stock investing something I can do myself? 

Yes, you can! Today there are many online resources for beginner investors to help you set up an investment plan. You can teach yourself about investing or go with an investment company. 

If you do it yourself, you’ll need to do your own stock research or subscribe to a research service. If you want some help, most large investment companies have online tools to help you get started. Some may charge a fee for different levels of assistance. 

If you are just starting out, doing your own research may be sufficient. However, as your stock assets grow, you may want to get professional assistance to make sure that your investments are diversified, not taking unnecessary risks and earning as much as you can. 

Q: “How much should I be paying attention to Wall Street and other economic indicators? Can they really affect me even if I don’t participate in the stock market?” 

We live in an interconnected world, whether it is the internet, social media platforms, world economies or the stocks markets. The world’s economies are connected in many different ways, whether it is trade, travel, currency or investing markets. 

On a day-to-day basis, much of the stock market does not affect the average non-stock investor. However, the stock market is a forward-looking indicator. That means that if the stock market falls, it may be predicting an economic slowdown or some other weakness. If the economy slows and businesses start laying off employees, it could mean some people lose their jobs. That’s when it might be helpful to pay attention to the stock market and the economy. 

If you are just starting out, give me a call. I’m here to help. While clients generally need significant financial assets in order to work with us, I’m happy to chat for a quick 20-minute call. If I can’t help you, I’ll direct you to someone who can. 

You can schedule a quick call with me by clicking HERE. 

Lyman H. Jackson

Lyman@PlanWithFPS.com

617-653-3303

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Check out our other blogs at www.PlanWithFPS.com/blog

• Should I count on an inheritance?    https://planwithfps.com/blog/should-i-count-on-an-inheritance

• Should I financial support my adult children?  https://planwithfps.com/blog/should-i-financially-support-my-adult-children

• Should I rollover my 401(k) when I retire?  https://planwithfps.com/blog/should-i-rollover-my-401k-when-i-retire

©2024 by Financial Planning Solutions, LLC (FPS), a Registered Investment Advisor. Reprinting or redistribution only by permission. This blog was written by a professional with 30 years’ of real-world experience in finance. AI did not write this article. FPS provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client after entering into an advisory relationship. The information herein includes opinions and forward-looking statements that may not come to pass. Information is derived from sources believed to be reliable. Information is at a point in time and subject to change without notice. Such information may not be independently verified by FPS. Please see the important disclosures link at the bottom of this page.

[1] Source: FTSE Russell 1000 index of large US stocks as of 3/7/2025,

https://indexcalculator.ftserussell.com/ICStep4DR.aspx