The article from the Wall Street Journal titled “Why My Generation Is Turning to Financial Nihilism” by Kyla Scanlon argues that Gen Z is embracing high-risk financial behavior out of despair and detachment. Of course, it is essential to recognize that Kyla, although well-intentioned, is a young twenty-something influencer with limited real-life experience, and sees things for “her generation” through a very narrow lens of “recency bias.”

Let’s start with understanding that “Financial Nihilism” is a term used to describe an attitude where people believe financial decisions are meaningless because the system is rigged, the future is hopeless, or traditional paths to wealth are broken. The term “Financial Nihilism” was first coined in 2020 by Demetri Kofinas, a podcaster, who used it to describe his belief that speculative assets lack intrinsic value, driven by a loss of faith in traditional economic systems.

However, while this phrase has gained popularity in recent years, particularly following the GameStop short squeeze, crypto mania, and the rise of meme trading, it disappeared when all of that collapsed in 2022. However, after three years of unprecedented market gains in every asset class, from stocks to cryptocurrencies to precious metals, “Financial Nihilism” has resurfaced to rationalize “speculative excess” and justify abandoning long-term investment strategies that have withstood the “sands of time.”

While Kyla produced a bombastic article to gain social media exposure by suggesting that Gen Z and Millennials no longer believe in saving, investing, or following traditional financial paths, the data shows something very different.

• Over half of Gen Z holds investments in traditional financial products, according to FINRA and the CFA Institute.
• A 2023 Vanguard report showed Gen Z participants in retirement plans were increasing contributions, not fleeing traditional investing.
• Charles Schwab’s Modern Investor Study found Gen Z prefers low-cost ETFs and index funds, strategies built around long-term returns.
• Pew Research data shows that Gen Z and Millennials are investing at earlier ages than previous generations.

None of these behaviors is nihilistic. They are practical and reflect economic constraints, not philosophical despair.

Yes, there is undoubtedly a pool of young investors throwing “caution to the wind” and aggressively investing in speculative assets to “get rich quick.” But even my children, at the ripe old age of 22, think they are unique and different and that no one understands their challenges. We parents, of course, have “no idea” about their situation. Of course, this is the problem with our youth who have no real-world experience or a sense of history. We, the “old people,” were the ones speculating on Dot.com investments in the late 90s, just before it all went bust. As I wrote in“Retail Investors Flood The Market,”

“Is it 1999 or 2007? Retail investors flood the market as speculation grows rampant with a palpable exuberance and belief of no downside risk. What could go wrong?

Do you remember this commercial?

That commercial aired just 2 months shy of the beginning of the “Dot.com” bust. We “youngsters” at the time thought Warren Buffett was an idiot for avoiding technology stocks because “he didn’t get it.”

Turns out he was right.

But that wasn’t the first time that we youngsters had to learn the risks of chasing “hot investments,” and why “this time is NEVER different.” The following E*Trade commercial aired during Super Bowl XLI in 2007. The following year, the financial crisis set in, markets plunged, and once again, investors lost 50% or more of their wealth by refusing to listen to the warnings.

Why this trip down memory lane? (Other than the fact that the commercials are hilarious to watch.) Because what is happening today is NOT “Financial Nihilism,” it is the typical outcome of exuberance seen during strongly trending bull market cycles.

While young people, like Kyla, may think that “this time is different,” they lack the historical experience to support such a conclusion. Ask anyone who has lived through two “real” bear markets, and the imagery of people trying to  “daytrade” their way to riches is all too familiar. The recent surge in speculative excess, leverage, and greed is not a new phenomenon.

With that said, let’s examine the issues with Kyla’s article and why “Financial Nihilism” is a myth.

“Meme Stocks and Crypto Aren’t Jokes Anymore. They’re Cries for Help.”

I loved this line from her diatribe as it suggests that Gen Z uses risky financial products as an emotional outlet. She implies that young people are not seeking returns but rather relief from feelings of hopelessness. While that framing sells well, it doesn’t hold up under scrutiny. While speculative assets like cryptocurrency and meme stocks attract younger buyers, that’s not proof of despair. Instead, it reflects broader exposure to digital markets, higher risk tolerance, easy access to trading (via platforms like Robinhood), leverage, and the rise of a gambling mentality.

But this is a newer development.

“Historically, access to capital markets was highly mediated, available only to institutions or individuals who had the time, money and resources to manage their assets with the help of brokers and financial advisors. Today, market data is readily accessible online and new technologies have significantly reduced the cost of trading and other barriers to entry. This means that more people can trade, at any time, from anywhere.” – World Economic Forum

Since 2016, the volume recorded at platforms that match orders from brokerages, a proxy for retail activity, has posted its third consecutive annual increase, rising by 15%. Meanwhile, the average daily volume of US-listed stocks has been ~12.0 billion shares since 2019, which is ~75% above the levels seen over the prior six years. Most notably, just over the last 12 months, daily volume has averaged a massive 16.7 billion shares.

Yes, retail investors are piling into the market. But why wouldn’t they after watching 15 years of market returns that are 50% above historical norms, and seeming “no risk” for speculative activities?

However, there is a difference between risk appetite and recklessness. As noted above, the data indicate that Gen Z is starting to engage with investing at a younger age than previous generations, and many hold investments for the long term while utilizing digital tools to experiment with their investments. That may include crypto or options, but it’s not a binary between discipline and nihilism.

Emotional narratives about “cries for help” obfuscate the data. Investors in their 20s often take more risk because they have longer time horizons. But where they are going wrong is through the amount of speculative risk and gambling behaviors they have adopted without financial guidance and education.

As noted above, “youngsters” gambling with investments is not new. Every generation throughout history has speculated on risk assets through every bull market cycle. But, unfortunately, regardless of age, speculative bubbles all ended the same way.

Gen Z didn’t “reinvent” the market; they are just entering a market that incentivizes risk-taking. Until it doesn’t.

“People My Age Don’t Think the System Works, So Why Follow Its Rules?”

Scanlon asserts that Gen Z has lost faith in traditional finance and institutions, and assumes systemic distrust is translating into a rejection of personal responsibility.

That isn’t an argument. It’s an excuse for “victimization.”In other words, my personal financial situation is not a result of my personal behaviors, spending habits, work ethic, or savings process, but it’s the “system’s fault.” Yet there is vast data to the contrary, showing that successful young individuals who follow the tried-and-true process of financial pathways succeed. Do they have as much wealth as their parents? Of course, they don’t, because they haven’t had the time to accumulate it. However, they are early on the path to success, which will likely outpace their peers.

Furthermore, this argument falsely equates skepticism with nihilism. Many young investors distrust centralized finance due to real-world events, including the 2008 crash, rising debt burdens, and stagnant wages. But rejecting blind trust in institutions is not the same as rejecting financial logic. Despite disillusionment, Gen Z invests at higher rates than Millennials did at the same age, according to Pew and the WEF. They also save a larger share of their income, using digital apps and platforms to automate their financial behavior.

Yes, Gen Z tends to distrust the government and financial media, but do you blame them, given the garbage that is produced daily on social media and YouTube by people with an agenda to promote? While skepticism fuels caution, it is not chaos. Gen Z is more likely to question fees, demand transparency, and seek passive investment tools, and that’s a smart move. Traditional rules of finance, such as saving consistently, spending less than you earn, and investing for the long term, are still followed; they just don’t generate “media-grabbing headlines.”

Calling this behavior “Financial Nihilism” misses the point. Gen Z is engaging with markets on its own terms, and while not all methods are necessarily healthy, it represents adaptation, not rejection.

“If the Future Feels Doomed, Why Not YOLO Trade Into It?”

Lastly, Kyla suggests that existential dread leads young people to treat the market like a casino. The idea is that if nothing matters, risk doesn’t either. This is the article’s weakest argument. While social and economic pressures are real, they are not driving widespread self-destruction. They are driving innovation in how people build and manage their wealth.

The idea behind this line is that young people, facing what feels like a bleak financial future, are throwing caution to the wind to gamble on crypto, options, and meme stocks to build wealth fast, rather than creating “lasting wealth.” This is where the term “YOLO trading” comes in, making aggressive bets with the mindset that there’s nothing to lose. However, as noted above, there is certain logic to that mindset, given that over the last 15 years, every market downturn has been met by either fiscal or monetary interventions. Repeated bailouts of bad investment decisions have created a “moral hazard” in the marketplace.

There’s truth here, but only part of it.

Yes, a subset of young investors is engaging in reckless speculation. They take on excessive risk, invest in volatile assets, and often trade on hype rather than fundamentals. Many borrow money to do it. This group exists, and their outcomes won’t be good. Some will lose money, and likely most will wipe themselves out entirely. The market is unforgiving when paired with leverage, inexperience, and emotional trading.

Here is a great example of the “YOLO” trading fallacy. Since the end of the “Meme Stock” craze in 2021, retail investors on Robinhood have made no money, even after accounting for the $4-5 billion wipeout in the January rout. That’s 5 years of their investing time horizon gone, whereas just investing in the S&P 500 index would have produced far superior results.

But this behavior doesn’t define the generation. It represents the tail end of the distribution—the loudest, not the largest.

What’s left out of Kyla’s article is what happens after the eventual realization that “trading” is a losing exercise over the long term. Early losses are the price of financial education, and, hopefully, if they survive financially, they will change their approach and revert to more traditional principles that have endured over the decades. In other words, they grow up and learn from the experience just as every great investor in history has.

The future is not doomed. But it is fragile for those who ignore risk. Financial outcomes depend on staying in the game long enough to benefit from compounding. If you blow yourself up in your 20s, you lose that opportunity.

The lesson is simple. Speculation is fun while you are winning, but that is not “Financial Nihilism.” It is simply greed masquerading as investing. However, the people who win in the long term are not gamblers. They’re grinders. They keep costs low, automate savings, and make decisions that allow them to survive market cycles. That’s not as flashy as YOLO trading, but that is how wealth is built.

What Gen Z Should Do: Build Survivability, Not Sensation

Despite the bad headlines, most young people are serious about their money. But seriousness alone doesn’t build wealth. The key is survivability, the ability to stay in the game long enough to benefit from compounding returns.

Do yourself and your financial future a favor: turn off bombastic, emotionally charged headlines and focus on what matters for building long-term wealth. Crucially, whether you agree with the current financial and economic system or not, learn to take advantage of it.

The only thing YOU can change is YOUR future. So stop worrying about things you can not control.

To get there, start here.

• Turn off the social media, influencers, and other financial goblins and focus on your goals and behaviors.
• Keep fixed expenses low
• Build cash reserves that cover 6 months of spending
• Use retirement accounts like Roth IRAs early
• Allocate most of their portfolio to index funds or ETFs
• Limit risky bets to no more than 5% of their total assets
• Learn through action, not theory, and track everything
• Avoid the leverage period.

The goal is not to outperform every year or get rich quickly. The goal is to stay solvent long enough for your savings to generate a return.

Financial nihilism is a myth. What’s real is volatility, income pressure, and distrust. The response shouldn’t be disengagement, but rather financial discipline. Long-run wealth isn’t about hope; it’s about repeatable behaviors that work consistently through market cycles.

The biggest problem for most young investors is the lack of research on the stocks they buy. They are only buying them “because they were going up.” 

However, when the “season does change,” the “fundamentals” will matter, and they matter a lot.

Such is something most won’t learn from “social media” influencers.

As Ray Dalio once quipped:

“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.”

Investing is a game of “risk.” 

It is often stated that the more “risk” you take, the more money you can make. However, the actual definition of risk is “how much you will lose when something goes wrong.” 

Following the “Dot.com crash,” many individuals learned the perils of “risk” and “leverage.”  

Unfortunately, for Gen-Z’ers, such is a lesson that is still waiting to be learned.