From Baby Boomers to Gen Zs – Why understanding your money mindset matters

Every generation has its own story. Baby Boomers saw the rise of the modern global economy and the launch of the World Wide Web[1]. Gen Z grew up entirely online and doesn’t know a life before the internet. Our experiences shape our perspective on the world, including our views on wealth, risk, and investing. These generational perspectives don’t just affect our attitudes – they influence our behaviour with money.

At OIG, we believe that understanding your generational “money mindset” is key to building a financial plan that works for you, not just for your age group, but for your values, lifestyle, and goals.

Generational snapshots: how we think about money

Let’s break it down:

• Baby Boomers (born 1946 -1964): Often value hard work, stability, and retirement income. These individuals are more comfortable with traditional investments like bonds and annuities and tend to trust advisors.
• Gen X (born 1965 – 1980): Independent and pragmatic. This generation must often balance kids, careers, and ageing parents. They are risk-aware and focused on retirement readiness.
• Millennials (born 1981 – 1996): Tech-savvy, socially conscious, and experience-driven. They are often cautious investors who prefer flexibility and real-time financial tools. They may over-save but under-invest due to fear of loss.
• Gen Z (born 1997 – 2012): Digital natives. Gen Z learned about finance through social media. They value transparency, sustainability, and access. They are comfortable with crypto, apps, and online platforms.

Why behavioural biases matter

Regardless of your generation, we’re all human, and that means we’re all susceptible to behavioural biases when managing money.

A few examples of behavioural bias include:

• Overconfidence bias: Most people believe they’re above-average investors, which often leads to excessive risk-taking.
• Loss aversion: We fear losses more than we value gains, causing us to sell at the worst times or avoid investing altogether.
• FOMO (Fear of Missing Out): Social media and trending stocks amplify the urge to follow the herd, especially among younger investors.
• Information overload: We are exposed to more financial information than ever, but too much data can lead to decision fatigue and not clarity.

What are the generations doing with their money?

Recent research reveals that Millennials and Gen Z are:

• More likely to invest in cryptocurrency and tech stocks than previous generations.
• Relying on influencers, TikTok, and Instagram over financial advisors.
• Saving for shorter-term goals like travel, not just retirement.
• Highly engaged – but sometimes too reactive to market noise.

Meanwhile, Baby Boomers and Gen X are:

• Focused on capital preservation and income.
• More likely to work with a professional advisor.
• Often under pressure to support children and parents at the same time.

As can be seen in the graph below, research shows that a buy-and-hold strategy remains the preferred investment approach. In other words, investors purchase stocks or assets and keep them long-term, regardless of short-term market fluctuations, which is a positive.

Exhibit 1 | Buy and hold investing most popular across generations

Source: Visualcapitalist.com “Charted: The most popular investing strategies, by generation”. Published 1 October 2024. For illustrative purposes only.

Exhibit 2 | What is in their portfolios?

Source: Fidelity Investments; “It’s time to change your mind about young investors”. Published 2022. For illustrative purposes only.

As can be seen in the graph above, Gen YZ shows a markedly higher interest in modern, values-driven, and high-growth investment themes, while Baby Boomers+ favour more traditional asset classes.

Gen Z is the first generation to grow up fully immersed in smartphones and social media, with platforms like YouTube and TikTok deeply integrated into their daily routines. When it comes to personal finance, Gen Z turns to YouTube more than any other source, followed by discussions with peers, online searches, TikTok, and finance-focused websites, highlighting this generation’s strong preference for visual and peer-driven learning.

Exhibit 3 | “What resources do you use to learn more about personal finance basics (e.g., budgeting, saving money, managing debt/credit)?”

Source: 2022 Investopedia Financial Literacy Study; Investopedia, data as at 29 June 2024. For illustrative purposes only.

Why do these behavioural and bias gaps matter?

Understanding how Gen Z manages their money is becoming increasingly important as we approach a massive intergenerational wealth transfer from the baby boomer generation. With trillions in assets expected to change hands over the coming decades, baby boomers must consider not only the financial legacy they leave behind but also the values and financial literacy that accompany it.

Gen Z, known for their digital savviness and social media influence, are more likely to turn to online sources (including unregulated financial advisers) for financial guidance. This presents a significant risk if not counterbalanced by education, mentorship, and trusted advice. At the heart of a successful wealth transition is open, honest communication between generations – bridging experience with innovation to ensure wealth is not only preserved, but wisely managed.

The value of financial advice and a trusted investment partner

At this critical juncture of wealth transfer, the role of professional financial advice and a trusted investment partner is more paramount than ever. As younger generations inherit complex portfolios, properties, and assets, the decisions they make early on can have long-lasting implications for their financial stability and growth.

Navigating markets, understanding tax implications, and aligning investments with long-term goals requires expertise that goes beyond social media soundbites and trending opinions. A reliable financial adviser serves as both an educator and a steward, helping bridge the gap between inherited wealth and responsible ownership.

With the right guidance, Gen Z can avoid common pitfalls, make informed decisions, and honour the financial legacy entrusted to them, turning a moment of transfer into an opportunity for sustainable prosperity.

How to break behavioural bias and build better habits

• Know your blind spots: Whether it’s fear, overconfidence, or herd mentality, recognising your behavioural tendencies can help you make more rational choices.
• Have a strategy that fits your life stage: Younger investors may afford to take more risk for growth. Older investors may need income and stability, but both need diversification.
• Don’t go it alone: Social media can inspire, but advice is personal. An advisor helps you align your investments with your actual goals, not trends.
• Stay the course: Time in the market beats timing the market. The longer you’re invested, the more your wealth can compound, regardless of short-term market noise

In conclusion

Investing isn’t just about numbers – it’s about people. Your experiences, values, and goals all influence how you view and grow your wealth. Understanding how your generation shapes your money mindset – and how to avoid its blind spots – can help you take control of your financial future.

Each generation has a distinct relationship with money, shaped by the world in which they grew up. As we enter a pivotal period of intergenerational wealth transfer, understanding these different financial mindsets is essential. Gen Z may be digitally savvy, but they are also more vulnerable to behavioural biases and the influence of unregulated online advice. This makes the role of a professional adviser and a trusted investment partner more crucial than ever. With proper education, mentorship, and a personalised strategy, this wealth transfer can become more than just a handover of assets – it can be a meaningful opportunity to align legacy with purpose and ensure long-term financial wellbeing for future generations.

At OIG, we combine personal insight with expert guidance, helping you navigate the markets with clarity and confidence, no matter your age.

[1] Source: Reuters “Baby Boomer inventions that changed the world” published 29 December 2010.