Market Insider – Growing up with social media and stories of overnight wealth, Gen Z investors are chasing unicorns while spending heavily to keep up. Their biggest driver? FOMO — the fear of missing out — which is reshaping how they view money, success, and even friendships.
A Generation Haunted by Missed Opportunities
Ed Elson, a 26-year-old analyst, often hears older investors talk about striking it rich in the stock market — and feels a pang of regret. His podcast co-host, marketing professor Scott Galloway, famously turned an $800,000 investment in Apple and Amazon in 2009 into $40 million. Elson longs for a similar chance with companies defining his generation, like OpenAI and SpaceX, now valued at over $300 billion combined.
But unlike earlier eras, these groundbreaking firms remain private for far longer, keeping Gen Z locked out. The average company now waits 14 years before going public, according to finance professor Jay Ritter. By the time an IPO happens, the fastest growth is usually over.
Secondary markets offer access, but only for accredited investors — those with at least $1 million in net assets or $200,000 in annual income. Just 13% of Americans qualify. As personal finance educator Vivian Tu puts it: “It feels like a private club. If you’re already rich, you get in. If not, you’re left out.”
The “TikTok-ification” of Finance
Locked out of traditional avenues, Gen Z has turned to social media and apps to satisfy their FOMO. Platforms like TikTok, YouTube Shorts, and Discord have transformed complex financial concepts into quick, digestible clips. Financial influencers such as Tori Dunlap and Humphrey Yang mix entertainment with urgency, amplifying the pressure to join in.
Brokerage apps like Robinhood and Public have lowered barriers further, allowing users to buy fractional shares with no commission fees. Investing has become as easy — and addictive — as swiping on Tinder.
The result: participation is surging. A Pew Research report found that by 2024, 53% of Gen Z adults in the U.S. owned at least one investment product, up from 34% just two years earlier. For many, buying meme stocks or trendy crypto tokens is not just financial, but social — a way of belonging to a community and proving they’re “in on the trend.”
The Social Cost of FOMO
The fear of being left out goes far beyond markets. It permeates social life, often straining finances. An Ally Financial survey revealed that Gen Z and Millennials spend an average of $250 per month just to maintain friendships — dinners, drinks, and events — even though three in five admit it hurts their long-term financial goals.
Many would rather go broke than lose friends: 25% said they’d prefer to run out of money than run out of companionship. Behind this is a deeper fear of loneliness, which the World Health Organization now labels a serious health risk, on par with smoking 15 cigarettes a day.
Social media only heightens the pressure. Over half of Americans say they’ve made financial decisions based on others’ lifestyles online, with dining out and travel topping the list.
Double-Edged Sword: Risk and Resilience
FOMO has its dark side. The frenzy around Figma’s IPO showed how retail investors often buy too late, only to watch prices plunge. Private markets are even riskier: pre-IPO platform Linqto collapsed amid SEC investigations, underscoring the lack of oversight.
As Barry Ritholtz of Ritholtz Wealth Management warns: “Everyone wants to find the next OpenAI. History shows the odds of picking it are close to zero.”
But FOMO also drives progress. Surveys show 66% of Americans now actively seek out financial education online, and 71% say seeing others’ success motivates them to improve money habits. Many open savings accounts, build debt-repayment strategies, or start investing because they fear being left behind.
Juliette Richert of The Artemis Fund notes: “There’s a strong desire for control and autonomy. Gen Z feels the system doesn’t serve them, so they’re rewriting the rules.” From crypto and fractional real estate to collectibles like sneakers and trading cards, young investors are inventing their own asset classes.
Redefining the Game
Gen Z isn’t just a younger version of past investors — they’re a product of a unique era marked by inequality, digital connectivity, and constant social comparison. FOMO is both their weakness and their strength: pushing them into risky bets, but also fueling innovation, financial literacy, and new ways of thinking about wealth.
Financial institutions are taking notice, developing mobile-first, transparent, and socially engaging products to capture this generation. For Gen Z, FOMO is more than a feeling. It’s a financial force reshaping markets — and it’s not going away anytime soon.
