Here’s When Each Generation Starts Investing. How Do You Compare?

Most financial experts recommend people start investing as soon as possible. The longer a person is in the market with a well-crafted, diversified portfolio, the higher, in theory, their eventual gains will be.

For many years, this was largely ignored. Then millennials and, even more so, Generation Z arrived on the scene. Equipped often with more financial education, greater access to financial markets, cheaper fees, more choice, and arguably more need, these groups bucked the old belief that young people have no interest in stocks, bonds, and investing.

When Did Each Generation Start Investing?

Nearly three in five people in the U.S. are investing today, according to the 2024 Schwab Modern Wealth survey. That’s a record that is significantly more than the 53% recorded by the U.S. Federal Reserve in 2019.

Much of that progress has been credited to technological advances and greater awareness among younger people. Not too long ago, people began investing at around 35. Now, it’s common to see kids investing in their late teens.

Below, we break down when each generation began saving and investing based on Schwab’s data.

Generation Z (19)

Gen Z—generally said to be those born between 1997 and 2012—was the quickest to begin investing. According to Schwab’s data, this generation, on average, started investing at 19, which is far lower than the national average of 30.

Perhaps earlier education about finance is behind this generation’s early start. An encouraging 28% of Gen Z claimed to have been taught about investing at school, compared with 19% of millennials and 12% of Gen X.

Millennials (25)

The second youngest generation, millennials, was the second quickest to start investing. On average, this generation, which was born from 1981 to 1996, began at 25, according to Schwab’s data.

Today, 54% of millennials, the majority of which grew up with the internet, are investing, according to Schwab’s figures.

Generation X (32)

People born between 1965 and 1980, the so-called Gen X, got started much later. According to Schwab, this group, on average, began investing at 32.

Boomers (35)

The baby boomer generation covers people born between 1946 and 1964. Today, 63% of boomers, most of whom are already retired, are investing. On average, though, this generation started investing late—at about age 35.

When Should You Start Investing?

Despite what you might hear or read online, very few people get-rich-quick-off investing. In most cases, success hinges on building a good, well-rounded portfolio and staying invested for as long as possible. That means the sooner you start investing, the better.

Time in the market lets investors take advantage of the fact that assets tend to rise in value over time. It also provides more prospects to benefit from compounding, generating more earnings.

This is best understood through an example. Suppose two investors entered the market at different ages with the same starting capital, the same monthly contributions, and the same average annual return of 6%.

Here is how they would have fared by the time they reached 65:

• Kim, who started investing $10,000 a year when she was 20, would end up with $2.32 million, $1.86 million of which is investment gains.
• Lisa, who started investing the same amount at 35, would end up with $869,529, $559,529 of which is investment gains.

The Bottom Line

The fact people are more engaged in investing and beginning younger than ever before should be celebrated. Younger generations can rely less on the state and their employees to fund their retirement and, in many cases, have less disposable income due to the generally higher cost of living, real estate, and so on, as a proportion of earnings. One way to make up for these shortfalls is investing over a longer period.