Young Aussie’s plan to become a millionaire by 30 as Gen Z rethinks path to wealth: ‘Essential’
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Michelle Huynh started investing when she was 18 and now invests at least $1,500 a fortnight into mostly ETFs. ·Source: Supplied
The high cost of living and high property prices mean Gen Z are having to rethink the previous pathway to building wealth. While share market investing might have been viewed as “nice-to-have” in the past, many young Aussies now see it as “essential” to avoid falling behind.
Michelle Huynh started investing in shares as soon as she was able to open her own trading account at 18. The 26-year-old is now investing at least $1,500 a fortnight and has grown her portfolio to be worth an impressive $240,000, while also saving up a deposit for her first home.
“What became clear to me was that investing wasn’t really nice-to-have. It might have been maybe 30 years ago when my parents were my age, but it’s no longer something that we can just delay,” Huynh told Yahoo Finance.
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Huynh, who works in tech sales in Sydney, is hoping to become a millionaire by the time she is 30 and says she’s “on track” to reach her goal. Her desire to start investing and build wealth was shaped by her experience helping her parents navigate their own finances growing up and seeing them work pay to pay.
“My parents are immigrant parents that came from Vietnam, so they’re not fluent in English and they don’t have a full understanding of our financial system,” she said.
“So growing up, I was really lucky because I got front row seats to the two hardest working people I know.”
Huynh bought her first home, a $580,000 investment property in Perth, two years ago. She put down a 15 per cent deposit, with her parents acting as guarantor for the remaining 5 per cent, so she could avoid lenders mortgage insurance.
She opted to go down the investor route and is still currently living with her parents at their home. She’s not set on owning where she lives, particularly given how high property prices are in Sydney.
“Truthfully, I don’t see a way for me to get into the Sydney property market with my current salary and savings, so if I don’t want to close the door on purchasing a house I live in for the future, then the best way to do that is to set myself up financially to get there,” she said.
Share investing increasingly seen as ‘essential’ for Gen Z
Recent research from Anyway and Raiz found 69 per cent of 1,013 Gen Zs surveyed viewed investing as “essential” to their financial future.
Financial independence (61 per cent) and long-term wealth creation (55 per cent) were the biggest motivators for wanting to invest, with half “very” or “extremely” interested in investing.
Another 83 per cent admitted they now believed owning a home would be “impossible” without family support.
Despite this, only 32 per cent expected to actually invest in the next 12 months, and half said they simply didn’t know where to start.
Raiz Invest head of product Tom Nguyen said Gen Z were eager to build their long-term financial security. ·Source: Supplied/Getty
Raiz Invest head of product Tom Nguyen said the findings reflected a generation eager to build their long-term financial stability, but feeling overwhelmed by uncertainty and financial pressure.
“It is not a lack of ambition. It is a confidence gap. Young Australians aren’t disengaged from investing, they’re overwhelmed by it,” he said.
The number of young Aussies who invest in shares has been a point of contention in recent weeks, with Treasurer Jim Chalmers unsurely claiming Treasury data suggests only one in 10 people under 35 own shares based on income tax data.
Separate surveys have put this figure higher, including an ASIC survey, which put the number at near one in five for those aged under 28.
Raiz has more than 210,000 users aged between 18 to 39, while half of all new sign-ups over the past year have been Gen Z.
CGT changes loom
There are fears from some that the federal government’s planned changes to the capital gains tax discount will make it harder for young investors trying to get ahead.
The government plans to replace the current 50 per cent CGT discount with an inflation-based discount and a minimum tax of 30 per cent. Controversially, this will apply to not only property, but also shares.
Huynh said she understood the government’s intent behind the changes, which is to make property more accessible for young Aussies. But she said extending the changes to shares and ETFs was where it got “complicated”, particularly for young people who saw shares as the most accessible way to build their wealth.
“The rules have changed, but I always believe that if you’re paying tax on your capital gains, it means you’ve done a good thing,” she said.
Huynh’s investment property has already grown in value and was last valued at $780,000. She is continuing to invest about 60 per cent of her income into shares, with the majority of her portfolio invested in ETFs.
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