Gen Z's Wealth Creation Edge: 20s Offer Time, Fewer Responsibilities

On International Youth Day, celebrated on 12 August, experts and individuals share their perspectives on how Gen Z can harness their 20s for wealth creation. People in their 20s have an advantage when building financial independence due to having both time and fewer financial responsibilities.

According to Siddharth Maurya, Managing Director, Vibhavangal Anukulkara Pvt Ltd, the biggest advantage for people in their 20s is not a high income but time. "Most early-career professionals have fewer financial obligations, so the investment amount at this stage doesn’t have to be very high for the investment to grow," Maurya added. Akshay Rao, Head – Product and Strategy, Tata Asset Management, also noted that people in their 20s have an advantage when building financial independence, as they have both time and, in many cases, fewer financial responsibilities.

Investing early allows for a larger amount at the end, but waiting to invest can also be costly. Maurya recommended SIP step-ups to increase investments as earnings grow. A ₹10,000 monthly SIP could become ₹11,000 the next year and ₹12,100 the year after with a 10% annual increase. Rao said those seeking financial independence should increase savings and investments as income rises rather than allowing higher earnings to be entirely absorbed by lifestyle upgrades.

Young investors should focus on building an emergency fund covering 6-12 months of essential expenses. Gen Z should prioritize repayment of high-interest debt such as credit cards and education loans. The theme of International Youth Day this year is 'Different Contexts, Common Aspirations'. Young people want meaningful work, businesses that solve real problems, financial independence, dignity, and the opportunity to create jobs and improve the lives of others.

## Why it matters The perception of Gen Z is changing, with many experts and individuals recognizing their ability to mobilize and create positive change. Filmmaker Prahlad Kakkar believes Gen Z has "come of age" and is proud of their sense of humor and ability to express themselves in their own language. The AGUKA Programme, implemented by UNDP and the Ministry of Youth and Arts with funding from the European Union (EU), has shown that young people want meaningful work, businesses that solve real problems, financial independence, dignity, and the opportunity to create jobs and improve the lives of others.

As the world celebrates International Youth Day, it is essential to recognize the importance of listening to young people and understanding their aspirations. By doing so, we can create a more supportive environment for them to thrive and achieve their goals. With the right mindset and financial habits, Gen Z can harness their 20s for wealth creation and set themselves up for long-term financial success.

## What happens next As Gen Z continues to grow and develop, it is crucial to provide them with the right tools and resources to achieve their financial goals. This includes education on investing, saving, and managing debt, as well as opportunities for entrepreneurship and skill-building. By investing in the next generation, we can create a brighter future for everyone.