Wealth and the Next Generation
Money Matters
Gen Z, the youngest generation in our workforce, is already having an effect on the financial panorama. Born between 1997 and 2012, Gen Zers are known for their digital skills, entrepreneurial spirit, and unique approach to money management. Unlike previous generations, Gen Z grew up in a world filled with technology, which has informed their attitudes and behaviors toward many things, including money and building wealth.
Growing up under the impact of the Great Recession, Gen Z saw their parents and siblings struggle financially. They’ve watched interest rates climb, housing prices soar, and our economy deal with uncertainty.
Be Your Own Boss
Many Gen Zers are distancing themselves from the traditional American Dream, questioning the feasibility of climbing the corporate ladder or owning a home with a white-picket fence. This skepticism is partly due to the challenges of navigating the housing market and the realization that salary increases often require a job change.
Remarkably, 40% of Gen Zers, surveyed by Instagram's 2024 Trend Talk, believe the best way to get ahead financially is through “some form of self-employment.” And this wasn’t just Americans who were questioned. The survey included 5,000 Gen Zers in India, Brazil, South Korea, and the U.K. as well.
The youngest workers are generally more economically susceptible since they’re usually earning lower entry level salaries. Combine that with an expensive economy and it can lead to feelings of uncertainty, or the need for overworking to make ends meet. With wages finally just beginning to meet the pace of inflation, it’s likely that Gen Z assumes working for themselves could pay off more than working for someone else.
Learning from History
They’re also taking a cue from other generations who were failed by the system. They realize that, in a quick moment, organizations will cut back in order to maintain or increase their profitability. They’ve seen it happen to their parents, they’ve seen it happen to millennials, and in the last few years, many of them have experienced it themselves.
That leaves Gen Z with a mistrust of companies, combined with recession anxiety, stymied student loan forgiveness programs, and general economic fatigue. Many feel that the economic landscape is different than it was for their parents, that the game has changed, and they fear for their financial future.
The Gig Economy
While still relatively early on in their career path, Gen Z is already tired of the system. An incredible 98% of 18-to-24-year-olds are experiencing worker burnout. They were also the most likely to report being stressed. Perhaps that's partly because a paycheck isn’t always enough to cover the bills these days, forcing young adults into side hustles. Nearly half of them have tacked on another part-time or full-time gig in addition to their main job. And the majority – a full 70% of Gen Zers – consider freelancing a viable alternative to a typical 9-to-5 job.
The entrepreneurial drive among Gen Z has led to a diverse array of side hustles. Beyond social media influencing, this generation is leveraging AI for services, tapping into the resale market, engaging in product reviewing and affiliate marketing, trading stocks and crypto, and so much more. These ventures offer scalability and flexibility, catering to Gen Z's preference for autonomy and digital fluency.
Earning Potential
The earning potential from side hustles varies, with those making over $5,000 a month focusing on scalable models like online businesses, freelancing, and local services. Interestingly, nearly 40% of side hustlers have household incomes of $100,000 or more, indicating that side hustles are not just for low-income earners but also a means of wealth accumulation and diversification.
A Few Examples of the Innovative Side Hustles Embraced by Gen Zers:
AI-Powered Services
Utilizing AI for tasks like video dubbing in multiple languages or professional video editing has emerged as a lucrative side hustle, offering services globally on platforms such as Fiverr.
Resale Ventures
The resale market remains strong, with Gen Zers finding success in selling thrifted items, new products purchased at a discount, or niche collectibles for profit.
Product Reviews & Affiliate Marketing
Engaging with brands for product reviews or utilizing social media for affiliate marketing has become another very popular way for Gen Z to monetize their online presence.
Virtual Event Planning
With the rise of remote work, there's a growing demand for virtual event planners. This can involve organizing webinars, online conferences, and virtual parties, requiring skills in coordination, digital tools, and marketing.
Social Media Management for Small Businesses
Many small businesses struggle to maintain an active social media presence. Offering social media management services, including content creation, scheduling posts, and engaging with followers, can be a valuable service.
Stock & Crypto Trading
According to Money.com, more than half of U.S. Gen Zers are active investors, with 56% owning some form of investment. A significant portion, 55%, prefer investing in crypto, showcasing a strong inclination towards digital assets.
Micro-tasking on amazon mechanical turk
Amazon Mechanical Turk pays you to complete quick, simple tasks online. This platform offers flexibility, allowing users to work according to their schedule on a variety of tasks like data entry or content moderation.
Personal Fitness Training Online
With the shift towards online fitness due to the pandemic, offering personal training sessions via video calls or creating pre-recorded workout plans can tap into the health and wellness market.
Freelance Writing & Content Creation
With a constant need for fresh content online, freelance writing, blogging, and content creation for websites, blogs, and marketing materials can provide steady income and flexibility.
Selling Handmade Items on Etsy
Creating and selling handmade products on Etsy is a popular side hustle for Gen Zers. This platform allows individuals to sell their unique creations, such as jewelry, art, home decor, and custom clothing, to a global audience.
Renting Out Unused Storage Space
A lucrative side hustle for Gen Z involves using Neighbor to rent out unused space like garages or closets. This platform offers an easy way to monetize spare storage areas, potentially bringing in hundreds of dollars per month.
What’s My Point?
For Gen Z, money is not just about earning but about achieving financial independence and realizing personal goals. Their approach to managing finances and building wealth is informed by a blend of skepticism towards traditional employment and an optimistic embrace of technology and entrepreneurship. Side hustles are not merely a trend among Gen Z but a fundamental shift in how the youngest working generation perceives work, life, and success. Through innovative side hustles, leveraging digital platforms, and prioritizing flexibility and personal fulfillment, Gen Zers are carving out new paths to financial stability and professional satisfaction.