Young people with financial nihilism are not making risky investments in America’s dreams

Given Jacob Kaplan’s path to financial security, he believes he needs to take a great risk.

For years, Kaplan has been betting on major sporting events through its online platform. The 25-year-old regularly exchanged tips with fellow enthusiasts through Discord and leveled up his bets by purchasing a membership on the sports data platform Bookie Beats.

“There’s a risk of taking each and every one of you bets,” Kaplan told CNBC. “But if you’re surrounded by the right people and know what you’re doing, the answer is like the question of my generation trying to find some kind of financial security.”

Kaplan is part of a cohort of youth pushing typical investment strategies to side for more risky alternatives. They are looking for a stroke of luck amid a wide after-season sentiment about the economy as home prices skyrocket, loan debts rise and job markets strengthen.

This phenomenon is called “financial nihilism.” It helps to explain the increase in speculative investments such as meme stocks, leveraged exchange sales funds, crypto, and more, as well as interest in forums such as sports betting platforms and forecast markets.

“We’ve been working hard to get into the world,” said Simon Oh, an assistant professor at Columbia Business School.

“It’s become much more difficult to do that using traditional means of wealth accumulation, and relatively, the past,” Oh said. “As a result, some sort of rational thing is swinging for the fence.”

Risk-on trading has continued since the pandemic took over society over five years ago.

The traditional market, sports betting platforms and forecasting markets allow people to gamble on all the results, from the latest NFL games to whether singer Justin Bieber announces a tour this year.

Digital currency trading has also gained relevance. This is an umbrella that includes everything from Bitcoin to “meme” coins. According to a US bank survey released this week, General Z is most likely to say he is interested in cryptocurrencies, plans to invest in them or plans to invest in them over the next five years.

There is a trend in short-class stocks that have begun within the stock market. GameStop and AMC During a pandemic. This year, the so-called meme stock of new classes Open door and Coles It explodes into the scene. Opendoor’s stock has nearly tripled this year. Cole’s stock has doubled in the past three months.

Fund creators aim to ride risk waves using leveraged ETFs. This is to amplify your investment and provide greater returns or losses. According to data from Vettafi and Bloomberg, the launch of leveraged ETFs was recorded in 2024 more than 15 years ago.

Options trading allows investors to bet on whether or not they will consider whether security will go up or down. According to Options Clearing Corporation, the total contract amount exceeded 1.2 billion in August alone, with a jump of 18% from the same month a year ago.

Marketing consultant Marcellous Donyae turned to options to trade about five years ago as she was looking for ways to make money while attending school. He hoped to avoid working on student loan debt for the fate of his counterparts around the country.

“I always wanted to have a source of income that gave me a sense of financial freedom and control over my life,” said Donya, 22.

There is an evolving slate of risk-on investment, but Colombia’s OH said the demand for this type of bet has not changed. Historically, he said goods were once considered a similar way to place high-risk bets.

Still, Donya’s desire for a financial security blanket underscores the unease that this generation of investors feel as traditional economic goals now feel like a distant dream.

With rising home prices and rising interest rates, the dream of homeownership has long been considered a core tenant of financial success, but it seems increasingly unattainable. According to a US Bank survey, three of Gen Z members have given up on buying the house entirely because of the cost.

These investors have experienced young adults during the pandemic-associated inflationary spike and are now facing a slower white-collar job market. Even if they can get a job, fearing the social security cliff gives them a sense of long-term uncertainty. Rising credit card debt levels and continuing overflows of student loans (the loan cessation ends under the Trump administration) can also throw cold water at their outlook.

“Everything you think about in the traditional economic ladder is increasingly out of reach,” he said, “The economy of this economy?” Young people “feeling left out of the market and feeling like there’s no future, so you might just be gambling it.”

Scanlon said the social sentiment of rejection linked to dating apps and university acceptance could amplify the anxiety that young people are already experiencing financially.

Therefore, data tracked by the University of Michigan shows that children ages 18 to 34 have the worst consumer sentiment measures for most of the year for the most part of the year. It shows a reversal from previous trends.

The young adults on this boat acknowledge that this high-risk investment flavor is not necessarily comparable to a lifelong market strategy.

Sports bettor Kaplan said he has heard much of the revenue from index funds or savings accounts. Maryland residents know that one day they have to give up on such time-consuming practice, but he wants to gather enough profits to set up for success by then.

“I don’t think of this as a sustainable, long-term form of income,” Kaplan said. “It’s financially beneficial for now, and at some point I’ll put it down and take the money and run.”