Outlook Money turns 24 this year. It’s that age by which most of you would have experimented and explored different scales and melodies of life, and would be settled or ready-to-be-settled soon with the rhythm that you like the most. OLM took off in 1998 and, thus, is among the oldest of the Gen Z (anyone born after 1997). The spurt in investment activity observed in this age group in the last couple of years has pricked curiosity about them in recent times.
But who is an average 24-year-old in India? The answer to that question in a country as diverse as India—not just in terms of culture and identity, but also in terms of social and financial status—cannot be straightforward. A significant research by Jeffrey Jensen Arnett, professor at the Department of Psychology at Clark University in Massachusetts, the US, clubs the age group of 18 to 25 into a group called “emerging adulthood”, a distinct phase between adolescence and young adulthood. In other words, 24-year-olds are at the cusp of change, and on the last legs of “a period characterised by change and exploration… as they examine the life possibilities open to them, and gradually arrive at more enduring choices in love, work, and worldviews”.
In his paper, Emerging Adulthood: A Theory of Development From The Late Teens Through The Twenties, Arnett further explains that “it is in many respects the age of possibilities, a period in which many different potential futures remain possible, and personal freedom and exploration are higher for most people than at any other time”.
If the theory is correct, the increased participation of the Gen Z (not just 24-year-olds) in the highly risky direct equity and cryptocurrency markets in the last couple of years fits into this need for experimenting with their lives and money, based on individual decisions and in a bid to find their own identity. They don’t want to be identified with those in the earlier generation, who were hooked to traditional investments, such as fixed deposits, and got swept by the wave of mutual funds and equities rather late.
The newfound sense of financial independence—because this is also the time when people start their first jobs, or are in the early phase of their careers—gives them further confidence to chart their own path, even in financial matters.
The role that behavioural biases play—especially at such an impressionable stage—can’t be ruled out either. A newfound income flow and lower responsibilities along with higher risk-taking capabilities and a herd mentality in the midst of a choice paralysis becomes an overpowering theme.
After understanding some bits of behaviour patterns of 24-year-olds, the next challenge is to figure out what could steer them away from recklessness to a defining phase for the rest of their lives, at least, financially. After much brainstorming and discussion, Outlook Money team came up with a set of 24 Smart Money Moves that would help the Gen Z put their financial lives in order. The first set relating to financial habits is especially relevant to them, while the rest can fall into place as they go ahead finding their feet and identity.
Luckily for us, we are among those emerging adults who have found their feet and identity. Outlook Money is tightly focused on what’s relevant to the household finances of our readers, and would continue to do so. But even with that focused idea, we will continue experimenting and exploring new ideas and subjects that will benefit the readers.
In that spirit, our list is not just meant for the Gen Z, but will be useful for people from all walks of life and age groups. This is one collector’s issue that readers can rely upon as a ready reckoner for daily use.
nidhi@outlookindia.com