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By Mallika Mitra
September 8, 2021
Three teenage boys looking at their smartphones
Getty Images

Today's teenagers are learning about investing in a strange, new world.

Anyone with a smartphone can now buy and sell stocks with no fees in seconds, cryptocurrency prices have soared, and people are forking over millions of dollars for digital art. The stock market can always be confusing, especially for someone who hasn't even yet bought a car or paid rent. But watching the meme stock frenzy unfold earlier this year has given teens very mixed feelings about the stock market, according to a recent survey.

Of teenagers who have been following GameStop's meme stock saga — when an army of retail investors banded together on sites like Reddit to pump up the video game retailer's stock — 39% say they believe the stock market is a great way to make money quickly, 40% say they see buying stocks as a good long-term investment, and 20% say they think buying stocks is too risky.

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That's according to a July survey of around 1,000 13- to 17-year-olds by the audit, tax and consulting firm RSM and nonprofit Junior Achievement USA.

The survey also found that if the teenagers were given money to invest, 43% said they would invest in the stock market, 25% in cryptocurrency, 24% in real estate, and 37% would choose not to invest at all. And where are they getting their information on the stock market? Most (43%) use social media, while 35% turn to their parents. Another 30% say they use websites for information about stocks, and 29% learn from school.

A ton of risk comes along with investing in cryptocurrencies, which continue to prove their volatility. Would-be investors should also know that placing money in individual stocks is also very risky, as opposed to a basket of securities like funds. While young people have time on their side and can often take on more risk, there's always the possibility of losing everything.

The world of personal finance is quickly changing, and young people are playing a huge part in that. Instead of waiting until employers offer them 401(k)s, some are turning to YouTube and Instagram to make money or learn how others are raking in cash. Others are investing for retirement at the ripe age of 15. Some savvy teens are even turning to crypto and non-fungible tokens (NFTs) to build wealth.

The investing landscape underwent a significant shift during the pandemic as lockdowns kept everyone at home and with little to do but bake bread, stream movie after movie and, well, invest. An April study from Charles Schwab found that 15% of U.S. stock market investors said they first began investing in 2020. And 16% of those investors were Gen Z.

But of course, there's risk with investing — especially if young people don't fully understand the stock market and think that it's a way to get rich quickly. There's no guarantee the internet is going to be able to clear up that misconception. In fact, there's bad personal finance advice all over the internet, and if that’s the only way young people learn about money, it could backfire on them, Anderson Lafontant, a financial advisor at Miracle Mile Advisors in Los Angeles previously told Money.

The survey results show that the great meme stock phenomenon of 2021 could be having an adverse impact on how teens perceive what investing in the stock market means, Jack E. Kosakowski, President & CEO of Junior Achievement USA said in a press release that accompanied the survey.

"Given the fact that the stock market plays a major role in helping countless Americans achieve a secure retirement, it's important that we help demystify it for the next generation," Kosakowski said.

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