Money

Gen Z Has a New Side Hustle: Stock Trading

Their future seems as uncertain as the market itself, so young investors are cashing in on the post-pandemic bubble.
July 6, 2021, 11:28am
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Photo: Getty Images

In early July, stock market influencer Kyle Fairbanks was banned from TikTok for calling the CEOs of Robinhood “a bunch of cocksuckers.” 

The 23-year-old self-taught investor insists the problem wasn’t the profanity; it was that he’d made a “controversial” statement about the trading app to his 132,000 followers. 

Fairbanks’ criticism of Robinhood isn’t unpopular – the company is being investigated for several reported violations, from its decision to prevent retail investors from trading during the GameStop short squeeze, to its alleged gamification of the trading process.

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“I want the best for my followers,” Fairbanks told VICE over a Zoom call from Dallas, U.S.. “When someone comes live on my TikTok and asks me, ‘Is Robinhood a good broker?’ I am going to be straight-up honest with them: I don’t think so.” 

Fairbanks is one of the finance world’s newest breed of disruptors: the Gen Z stock gurus. 

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Kyle Fairbanks is one of the finance world’s newest breed of disruptors: the Gen Z stock gurus

They are both products and critics of financial services like Robinhood, which have made commission-free trading accessible and friction-free, and caused an unprecedented rise in the number of amateur retail traders in the market. 

Fairbanks, who is now back on TikTok as @assettrades with 120,000 followers, intends to educate new investors so they aren’t taken advantage of.

“The education system doesn’t teach you how to set a passive income, or invest in stocks, and I think that’s a huge gap,” he said. “I see my mom struggling; she worked a nine-to-five [job] since she was 24, and now she is 60. I don’t think it’s okay for someone to have to push themselves like that.” 

Fairbanks learned about investing through online courses, books and podcasts, and started investing with money he earned through various side-hustles like personal training and freelance videography. He is now one of four owners of Asset Entities, “a community of like-minded individuals” that convenes on community chat platform Discord to discuss everything from potential stock opportunities and side-hustles to long-term investments. 

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On TikTok, where they have over a million followers, @assetentities posts videos with hooks like “Stocks that got me out of the suburbs” and “Stocks that are gonna make me rich by 2022” – some of which have received nearly three million views.

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It is easy to be cynical about the decision-making abilities of Gen Z: scrolling through the subreddit r/wallstreetbets, best known for spearheading the GameStop stock surge, brings up posts that read: “tl;dr: I put the wrong Expiry Date for a put order that I had done DD on, and essentially yeeted 3 years of my savings.” 

It is also easy to ridicule the unfounded confidence of the meme-era stock trader, who has not yet witnessed a teachable-moment market crash like the millennials had in 2008. 

However, there is a lot more to the Gen Z bull ride than meets the eye.

“There has always been an exposure element to investing,” Munich-based insurance expert Patricia Pelayo-Romero told VICE. “The only difference is that Gen Z is receiving this exposure through different channels: TikTok, Reddit and Twitter. This is especially alluring right now because their chances of getting a well-paid job are way lower than they were even one year ago. The stock market is basically an avenue to make money.”

Take for instance Vivian Sam, who once aspired to be a chef. At the age of 19, he enrolled in a hotel management course in the southern Indian city of Bengaluru, but soon realised the physical and mental strain that came with being a chef wasn’t for him. Out of curiosity, he calculated the kind of wealth he could hope to generate with a hospitality-sector income. 

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“It would have taken me nearly 40 years to make just a million dollars,” he told VICE. 

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“It would have taken me nearly 40 years to make just a million dollars." – Vivian Sam

During his final year on the programme, Sam was already reconsidering his career path. Then, in the spring of 2020, the pandemic made the choice for him. He learned about stock trading through online courses on YouTube, and started making small investments with some saved-up pocket money. 

Today, at 22, Sam is a full-time trader, working from his home in the city of Bhilai in Chhattisgarh state, India. “I am part of the COVID generation of stock market investors,” he said, identifying with over ten million Indians who opened trading accounts between April 2020 and January 2021. “I found it is really addictive to see my money grow like this, so I stuck to trading, and it’s going well.”

Meanwhile, in Switzerland, 22-year-old Santiago Mezzano started trading to take advantage of the market upswing post-pandemic. He borrowed money from his parents and spent the quarantine short-selling all day. “I had no idea what I was doing back then, but somehow, I invested in all the right companies, and left at all the right times,” he told VICE. 

Now, Mezzano is investing for the long-term, hoping to compound his gains over the decades as a safety-net for the future. As a student of psychology, who will be pursuing a master’s degree in neuroscience in the coming semester, he has learned enough about neuro-degenerative diseases and the costs of old age to already be concerned about his post-retirement well-being. “Who is going to take care of me when I am 80?” he asked. “Pension funds are not going to be sustainable because no one is going to be able to pay for them. I am not going to trust the system. I want to live happily when I retire.”

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"I had no idea what I was doing back then, but somehow, I invested in all the right companies, and left at all the right times." – Santiago Mezzano

While financial stability is the primary concern for many investors, Elena Broglia is thinking a lot bigger. A 22-year-old entrepreneur based in Milan, Italy, Broglia is developing a platform for people to share and discover products that have been manufactured sustainably, and that work towards a circular economy. With her investments, which she makes with pocket money and income from previous jobs, she wants to reflect her commitment to a sustainable future, and put money into companies that practice eco-responsibility. “I want to use my money in a way that is purposeful, and invest in other people’s ideas,” she told VICE.

Broglia is picking up on a changing sentiment among consumers: more people are starting to patronise companies that practise sustainability, and those are the ones she believes are poised to do well in the future.

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Still, sentiment is a curious thing. Most Gen Z investors tend to buy stock in companies they recognise, specifically in the technology sector. 

However, many investors believe the future lies in the most enigmatic investment strategies of all: cryptocurrency. 

Justine Castillo, a 24-year-old language educator based in the Philippines, first saw the potential of the investment in 2017, when the price of one Bitcoin went up to nearly $20,000. The subsequent crash in 2018 made a lot of people scoff at the legitimacy of alternative currencies, but post-pandemic, the market has seen a rebound. 

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“At the start of the pandemic, people were holding on to their money, and economies were suffering from all the lack of production,” said Castillo, who sets aside a portion of his income each month for investments. “I saw cryptocurrency as a way to hedge against any fluctuations in fiat currency.”

Castillo is not alone in seeing cryptocurrency as a safety net in the case of a market crash. Even Robert Kiyosaki, businessman and author of investment bible Rich Dad, Poor Dad, has urged people to invest in more “gold, silver and Bitcoin.”

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“I saw cryptocurrency as a way to hedge against any fluctuations in fiat currency." – Justine Castillo

“We still have a long way to go when it comes to determining the value of something,” said Castillo. “I don’t think we will get to a point where stocks or cryptocurrencies or any sort of investment escapes speculation. We can’t determine the next big crisis, or the next big boom. You’re just trying to see into the future.”

Insurance expert Pelayo-Romero’s concern is that while previous generations – including millennials – typically invest in the market only when they have adequate financial literacy, Gen Z investors tend to take more risks than they can afford to. 

A lot of the information on “StockTok,” as the stream of stock-market related content on TikTok is known, simply isn’t accurate, she says. If people didn’t have the right mentorship, they wouldn’t know better. Gen Z has also only seen a bull market post-COVID, and may have developed a false sense of what stock trading can do for them. For the long term, however, the increase in financial literacy is wholly positive. 

“The more exposure you have, the more proficient you become, just like with anything else,” said Pelayo-Romero. “What makes Gen Z so bold is that their situation is already quite dire. So really, they have nothing to lose.”

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