How Gen Z is transforming investing with purpose, passion, and digital power

Currently estimated at over 377 million, India’s Gen Z is not just a demographic but a driving force behind the nation’s evolving consumer and investment patterns. Born into an era of smartphones, affordable data plans, and social media revolutions, this generation has grown up hyperconnected and highly informed. Their digital fluency and fresh perspective on traditional norms are reshaping industries and redefining how wealth is built.

What sets India’s Gen Z apart?

This generation stands out for its celebration of diversity and inclusivity. Be it gender, race, or sexuality, Gen Z thrives on challenging stereotypes and advocating for equality. They leverage platforms like Instagram and Twitter not just for entertainment but also as tools for activism, championing causes such as climate action, gender parity, and mental health awareness.

India's Gen Z is entrepreneurial at its core. With the rise of accessible online platforms, many are monetising their passions—whether through e-commerce, freelance opportunities, or creative pursuits like content creation. Authenticity, transparency, and socially conscious values resonate strongly with them, influencing their consumption and financial habits alike.

Having witnessed economic volatility, particularly during the global financial crisis and, more recently, the pandemic, Gen Z exhibits a pragmatic approach to personal finance. While they are open to experimentation, they also seek stability and purpose in their financial decisions.

Digital Platforms: A Game Changer for Young Investors

In India, new age digital trading platforms have transformed investing into an accessible and engaging experience for young people. Gamified interfaces and engaging educational tools further attract young investors, enabling them to experiment with small budgets while diversifying their portfolios. With low minimum investments, seamless app interfaces, and features like SIP calculators and goal tracking, these platforms appeal to a generation that thrives on instant gratification but also values informed decision-making.

In addition, fractional ownership of high-value stocks or real estate, has allowed Gen Z to experiment with diverse portfolios, even on modest budgets. This democratisation of wealth-building tools is empowering young Indians to break into traditionally exclusive financial markets.

Social Media’s Role in Shaping Investment Behaviour

Social media is both a boon and a bane for Gen Z investors. Influencers on social platforms, including the rapidly growing "finfluencer" community in India, simplify complex concepts like mutual funds, ETFs, and cryptocurrencies, providing accessible financial education to millions of followers.

However, these quick snippets of advice frequently exploit the Fear of Missing Out (FOMO), prompting impulsive investment decisions. Viral trends, whether it is the rush to invest in a hot IPO or the allure of cryptocurrencies can lead to impulsive and high-risk decisions. Moreover, they often do not provide accurate disclosures related to sponsored content or brand marketing. This can lead to significant financial risks for inexperienced investors.

To navigate these challenges, young investors must cultivate a habit of relying on credible resources and practicing due diligence over chasing hype.

Thinking Beyond Traditional Investments

India’s Gen Z is unafraid to explore unconventional investment avenues. Their portfolios reflect creativity and values, featuring several non-traditional options like:

P2P Lending: Peer-to-peer platforms allow Gen Z investors to directly lend money and earn returns through interest payments. There are existing platforms that enable such lending, bypassing traditional banking channels

Sneaker Resale and Streetwear: The sneaker culture is catching on in urban India, with limited-edition sneakers, such as Air Jordans and Yeezys, along with streetwear brands like Supreme, becoming valuable assets. The scarcity of these items, coupled with dedicated resale platforms, has transformed them into a lucrative investment class, generating millions in annual sales

Impact Investments: With a strong focus on social and environmental issues, Gen Z prioritises investments that align with their values. Sustainability-focused projects, from renewable energy startups to eco-friendly brands, are drawing interest from socially conscious Gen Z investors who want their money to make a difference.

The Need for Financial Education is More Crucial Than Ever

Despite their enthusiasm, Gen Z investors often lack formal financial education, relying instead on fragmented information from social media or peers. This knowledge gap heightens their vulnerability to scams, market volatility, unsuitable products, and poor decision-making.

Addressing this requires collaborative efforts, with financial programs tailored to Gen Z's tech-savvy nature. Educational initiatives, credible apps offering robust financial content, and engaging online courses can bridge this gap though Governments and financial institutions must still play a pivotal role in promoting accessible and engaging financial literacy resources.

A New Chapter in Wealth Creation

India’s Gen Z is redefining wealth creation with their innovative investment strategies and bold exploration of non-traditional assets. Their openness to non-traditional investments, adoption of digital tools, and alignment with socially responsible values signal a shift in how wealth is perceived and pursued, setting the stage for a future that combines growth with purpose. However, to fully realise their potential, equipping this generation with comprehensive financial knowledge is critical. With the right support, India’s Gen Z can lead the charge in creating a future that balances innovation with sustainability, redefining wealth for decades to come.

The views are personal. The author is Senior Manager, Capital Markets Policy at CFA Institute