Gen Z out-investing other generations in frequency: TD survey

Nearly seven in 10 Gen Z Canadians are investing consistently on a yearly basis, the report found

Published Nov 14, 2024  •  2 minute read

Some younger Canadians, priced out of the housing market while entering their careers, are managing to build wealth through means other than real estate. Photo by Getty Images

Burdened with growing financial pressures, including the cost-of-living, it comes as little surprise that less than half of Canadians feel they’re saving enough money to meet their financial goals.

But there is a wave of younger Canadians investing early in order to get ahead.

A large majority —  68 per cent — of Gen Z respondents in a survey from Toronto-Dominion (TD) Bank, released Thursday, said they have regularly invested funds (at least once a year), the highest of any age demographic. In comparison, only 58 per cent of all respondents said the same, and about a third of Canadians have never invested at all.

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Some younger Canadians, priced out of the housing market while entering their careers, are managing to build wealth through means other than real estate.

In fact, Statistics Canada recently reported that 15 per cent of those under 35 who rented their principal residence and had no employer pension plan had a net worth greater than $150,000. That’s a significant rise from five per cent in 2019.

Younger Canadians are also starting to take charge of their finances at a time when robo-advisors and other investing platforms have become increasingly accessible to entry-level investors who aren’t working with a financial adviser.

However, it’s clear that higher prices are keeping Canadians of all ages on edge. TD reported the cost of living was preventing nearly two-thirds of respondents from achieving their financial goals.

The survey also found Canadians across age groups are relying more on their savings accounts, which offer cash liquidity, in order to cope with their financial responsibilities.

More than a third of respondents said they were contributing to a savings account only, instead of contributing to a tax-free savings account (TFSA), registered retirement savings plan (RRSP), or first home savings account (FHSA). But while savings accounts can help people in short-term emergencies, the other investment vehicles allow for compounding growth in long-term wealth building and meeting goals, such as buying a house or saving for retirement.

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On the other hand, financial knowledge, particularly when it comes to investing, could play a key role in saving money, as well. Respondents pointed to a lack of financial knowledge as a major barrier, with 45 per cent not feeling confident in their investment knowledge.

“Balancing competing saving and spending priorities can be challenging,” said Pat Giles, vice president, saving and investing journey at TD, in the press release. “It’s possible to enjoy the present while also investing and saving for the future. Setting financial goals doesn’t require a large amount to start; it’s about cultivating a habit of investing and sticking to it.”

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