Huang Chongzhe, Dean of the Financial Research Institute.

(file photo)

(Huang Chongzhe is the dean of the Financial Research Institute and the editor-in-chief of "Taiwan Banker" magazine)

When I was taking a general economics course, I asked college students: "Will you invest in foreign currency? Will you buy US dollars? Or mainly Japanese currency?" I didn't expect the answer to be Bitcoin and Ethereum and other cryptocurrencies. The financial innovation in the money and banking textbooks has become the normal investment status of today's college students.

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These young people, known as Generation Z, are also the worst victims of the collapse of FTX, the world's second largest cryptocurrency exchange.

Especially in the United States, studies have pointed out that a large number of young people’s investments have focused on these virtual cryptocurrencies that claim to be decentralized because they have witnessed the distrust of the financial system caused by the financial turmoil of their parents.

26% of Generation Z invested in stocks, but 23% invested in virtual currencies, and the proportions of the two are quite close.

Because of this, the collapse of the currency circle has also worried the US financial industry, and the related ripple effect may make several generations stop investing for a period of time.

In fact, observing Japan’s experience, we can also see that investment failures have hindered the development of the generational investment market. It is precisely because Japan’s Generation X and Generation Y grew up in a period of low growth that lasted 30 years after the bubble burst. In other words, "cash doctrine" has become the most important way of wealth allocation, so despite the long-term negative interest rates on real deposits, it is difficult to adjust the society's preference for cash holdings, so that people lose interest in investing in the stock market and housing market, and even affect the Promotion and application of electronic payment in Japan.

Therefore, we should start caring about the financial attitude and environment of Taiwan's Generation Z to maintain the sound development of Taiwan's financial market.

According to the "Survey on the Financial Face of College Students" conducted by the Financial Research Institute, 40% of these young people, also known as digital natives, have already started investing; A group of Internet celebrities come to provide financial knowledge, but more than half of them feel that they don't know much about financial knowledge, or even don't understand it at all, which has become the financial face of this Generation Z group.

In this FTX incident, although the proportion of Taiwan’s Generation Z investing in virtual assets is still limited compared with that in the United States, it also has an investment rate approaching 7%. If you add the white investors under the violent fluctuation of the Taiwan stock index, it can be inferred that Taiwan’s investment this year will be affected. Generation Z should not be a minority, and they really need more assistance to rebuild their confidence in investing.

Interestingly, this survey also found that whether Generation Z has discussed financial-related issues with their parents has a very positive relationship with their own financial knowledge. Experience exchange, whether it is successful or failed investment experience, can help Generation Z cultivate financial knowledge.

After all, although the Internet is not necessarily full of false information, it is one of the characteristics of Internet information that it is easy to bluff. If the source of a large amount of financial knowledge of Generation Z comes from investment stratosphere and Internet robots push information , the chance of being misled and becoming a financial leek has increased a lot.

It is urgent to cultivate the ability of Generation Z to judge the authenticity of information on the Internet, and it requires the cooperation of the government, schools and financial institutions.

Today's Generation Z will eventually become the main force of the market one day, and the promotion of correct financial knowledge is the key to constructing the future financial market.

The dual-card storm once frightened a generation of young people in Taiwan. We do not want this to happen again on the road to financial innovation in the future.

It is hoped that all walks of life will join hands to carry out dialogues on financial science popularization between generations. The Taiwan Financial Research Institute is preparing to start this work, and invites all schools and units to participate.

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