I think that’s something that it’s really difficult for people to understand if they’re not growing up in Gen Z or younger. We’ll lump millennials in there too. So what does that mean that the rules of the games have changed in practical terms for Gen Z and older generations trying to understand today’s financial environment?
Lillian Zhang: I think a lot of the changes that have happened for Gen Z and millennials, or just a lot of the external factors, look a lot different compared to other generations before. Maybe like 40 years ago, you can live on one income. And now it’s not the case anymore because wages have not increased at the same rate as cost of living has.
I’d say also in terms of technology and how it’s much easier to gain access to information, which is a really positive thing, but also can promote impulsive behaviors or misinformation because of the technology. It’s easier for Gen Z now to make a lot of money, but it’s also the generation that can lose a lot of money the fastest. So all those factors combined contributes to how Gen Z is really facing a different reality from previous generations.
Money can buy happiness
Marlena Jackson-Retondo: And you kind of say in a soft way that you disagree with the general statement that money doesn’t bring happiness, in quotes. Can you walk me through your stance on seeking security and freedom through personal finance?
Lillian Zhang: Yeah, of course. Money is such an integrated part of all of our lives whether or not you think about it on a daily basis there was a previous study from a decade and a half ago that states that the average income needed to be quote happy is around 75,000 but a more recent study says that happiness actually caps off closer to 500,000 a year which is surprising but then at same time, not really surprising.
I’ve also questioned this myself in terms of how much money would I need to feel happy and I just think about what are my goals, what are my values like, what do I appreciate spending money on; that’s how I think about it.
Marlena Jackson-Retondo: Yeah, I think it’s really frustrating for young people to hear older generations say, “You don’t need money to be happy. You don’t need all these things to be happy.” And that’s not the reality when you’re talking about really big financial gaps that a lot of people are facing in the U.S these days. So I really appreciated your openness and your stance on this, especially as a young person that other young people can look up to.
FOMO and how to stop comparing yourself to others
Marlena Jackson-Retondo: Some of what you talk about in the books is about FOMO or the fear of missing out. You’re an online influencer and you found an unusual amount of financial success for someone in their 20s. What would you say to a young person who follows you and feels like they’re. Quote unquote, falling behind and need to keep up with what you’re doing or maybe with another influencer that they’re seeing.
Lillian Zhang: Yeah i’ve also compared myself to other people as well i think no matter what stage you’re at in your career or in your personal life.I always have to tell myself that the only thing that really matters is if you’ve improved from your past self and everyone’s on their own journey just because someone is 10 steps ahead of you doesn’t mean you should be comparing your first step to someone’s 10 steps…that’s sort of how I’ve Um, positioned it in my head. And so everyone’s just on their own journey. Everyone has different circumstances and situations and it’s not apples to apples comparison.
Online safety for digital natives
Marlena Jackson-Retondo: We hear a lot about how Gen Z and younger generations are, quote unquote, digital natives. But I don’t think we hear enough about how we can still support younger generations in moments when digital spaces are really hard to navigate.
You know, young people are still young people. They’re still learning how to navigate the world, figure out who they are. What are some of your quick tips for online safety, specifically maybe avoiding um, scams online or using safe platforms?
Lillian Zhang: So yeah, the scams are getting a lot better and something that’s happened to me personally is I would get emails from a PayPal or an Amazon saying like so-and-so was charged on your card. Click now to undo the charge and as usually someone who is pretending to be a company trying to like get to your email address or your personal banking information and that’s something that I think is important to look out for.
Marlena Jackson-Retondo: Yeah, I think we have this idea that older people are the people that are targeted the most for these types of scams, which they are, but I think also young people are very vulnerable, especially if you have that anxiety about your financial health and you might be learning how to implement impulse control. I know that if I was 16 and I got an email like that, I might automatically click on that link, not even thinking about someone trying to scam.
Lillian Zhang: Oh, yes, that’s definitely true.
Financial (dis)advantage
Marlena Jackson-Retondo: Okay. So let’s talk about finding financial stability as a young adult. That is a huge topic that contains lots of subtopics and can be super intimidating for a young person to even begin to think about.
Lillian Zhang: Yes.
Marlena Jackson-Retondo: One of the things that really popped out to me is that understanding the inequities of the financial playing field can be really helpful. Especially for young people who might be experiencing that FOMO when it comes to spending money. What would you say to these young people who might not understand that the people who look like they have it all in real life or online are most likely greatly advantaged financially?
Lillian Zhang: I see this a lot like you mentioned on social media a lot of people post what they’re wearing where they’re going out to eat where they are vacationing and i think for a lot of young people who are aspiring to that lifestyle it can be really easy to compare yourself to what other people are doing and for a lot of people they worked for it. And for some people, they’re not showing how they’re affording it, whether that’s through debt; through their parent sponsorship. There are many factors in which you don’t know how they are doing something unless they tell you.
Finding financial stability through internships
Marlena Jackson-Retondo: There’s also a lot of different ways you can go about finding financial stability as a young adult. One of the really great ways that I saw you point out in the book is how internships create a pathway to financial stability, especially for people looking to find a career in the corporate world.
Can you talk a little bit about some of the practicalities of finding an internship even when you’re in high school or in the early stages of your post-secondary education? And how that can kind of set you up for some financial success early in your 20s.
Lillian Zhang: Yes, so my career path has mostly been the internship and then later on my corporate career, which I am a few years in now.
I learned about internships when I was a freshman at college, and so I saw internships as a way to get my foot into the door, and I honestly didn’t really think about the financial aspects of internships because… I do think the main purpose of internships is to gain experience so you can land a higher paying role in the industry you want to be in after college, which is where many people see their real earnings come in.
In terms of resources for finding internships, when I was in school, I relied on a lot of networks like LinkedIn. I rely on Handshake, which is sort of like a LinkedIn for finding opportunities, but they’re specifically created for college students. And so I really appreciate the opportunities that I found through Handshake actually. Sometimes like professors or classes have jobs or opportunities that they’re connected to. Also relying on the peers in your school, perhaps the alumni that you can reach out to. Those are some of the tips that I have found super helpful when I was in school.
Staying motivated
Marlena Jackson-Retondo: Let’s talk about motivation. It’s easy to lose motivation, but especially if you feel like you’re never going to reach your financial goals and especially as a young person whose frontal lobe is not fully developed and you’re just starting to think about your personal finances, you’re starting to learn about future planning. What is a strategy that you like to use when you feel yourself losing motivation to keep your personal finance goals in sight.
Lillian Zhang: Yeah, I think it’s really interesting because especially for a lot of young people, we live in the culture of FOMO as well as YOLO culture. So, doing things without thinking long term or not understanding that there is a path long term. And I think a lot us get stuck in the cycle of, oh, I’m not going to hit my goals next year, therefore it’s gone to waste.
But we forget to realize that we have a long life ahead of us. And just because we don’t reach our goals next year doesn’t mean that we’re a failure or that we shouldn’t plan for the future and so i think we just need to be more intentional with what do you really want in five years or 10 years.
What I do is I’m very adamant on tracking a lot of my progress just like month to month not all the time because I think that can be a little stressful but just like knowing where you’re at and seeing like which parts of this process can I control? And what are other parts of the process that are more external factors that I might have to let go?
So I think it’s just understanding your situation and what specific things can you control in the process that will bring you more of that relief around the topic instead of feeling that you don’t have control over that.
The pitfalls of buy-now-pay-later
Marlena Jackson-Retondo: Let’s talk about Buy now, pay later. This has been a really big topic over the last couple of years, and I feel like that would be a really enticing tool for especially a young person to use, whether or not they have the finances to keep up with it. What are some of the risks and also rewards associated with these types of payment systems like Klarna or Afterpay.
Lillian Zhang: I’ve never used a buy now pay later service ever and it’s just something that I personally have a negative stance against because I think it can do something that is very dangerous. In a way it makes debt seem cute and it makes it not feel like a big deal because you’re not technically getting charged interest and the payments look smaller. So I think that’s what entices a lot of people.
But I mentioned in my book too that it’s kind of like the impulsive behavior that once you start doing something it could unlock something in your brain that it would be okay to do the same process or bnpl service for larger purchases even if you can’t afford it I think that’s the biggest pitfall is spiraling into something bigger than what you perhaps intended it to be be for.
And one of the most shocking things I’ve seen online about BNPL is that one of bnpl providers was actually on restaurants like Chipotle. “Get your burrito now and pay it later.” Which I think is really, I’m not sure about that, you know?
Marlena Jackson-Retondo: Mm-hmm, yeah, that does seem like a really slippery slope.
Investing versus gambling
Marlena Jackson-Retondo: I wanna also ask you about making the distinction between investing and gambling, especially when it comes to things like cryptocurrency and meme stock and sports betting that might blur the lines between investing in gambling behaviors.
Lillian Zhang: When it comes to short-term gambling or investing based on hype it usually involves a high form of luck. It’s not dependent on these specific technicals of how investment would grow over time, it’s more about did you get in at the right time and you get out at the right time. The entry points and the points that you leave is crucial whether or not you lose a lot of money or gain a lot money, and I don’t believe that is the wisest way for most people to build wealth long term.
And when you’re investing in something in the long term, you’re investing in the fundamentals of a company or the economy as a whole. And that has its own guardrails. And studies have shown that if you invest for the long term, over a 20 year period, you’re basically guaranteed to profit off your investment.
And so I think a lot of people, young people, don’t think about what their life would look like in X many years from now, because a lot of us want that instant gratification, just like when impulse shopping. And a lot of people want to see immediate gains in their money or investment growth. And so we just have to temper our expectations a little.
Meme stock versus meme coin
Marlena Jackson-Retondo: In the book, you tell a story about losing money to a risky investment in a meme coin.
Marlena Jackson-Retondo: I mentioned meme stock.
Marlena Jackson-Retondo: Can you explain to us the difference between the two?
Lillian Zhang: Yes, so the theory behind a meme stock and a meme coin is very similar. In the sense that it’s driven up by hype and there’s no real logic behind this particular asset. And so the difference is a stock is basically a portion of a company.
So an example like a real stock is like Google, Amazon, Apple, like established public companies, and a meme stock is a stop representing a company that is driven up artificially by media hype, by social hype, with no real logic to why the stock would increase.
In a normal situation when a stock increases, it’s because perhaps the product did well in sales. Or the earnings report was good, like something tangible behind that And a meme coin is a similar concept also driven by hype and the media except it’s for cryptocurrency. So digital currency that is worth money if you sell it. It’s driven by urgency in hopes that you will also enter in this investment and the people who actually benefit know when it’s gonna top out and they sell.
And most people who get into this lose a lot of money because by the time you hear about it on the news the hype is already over but people still enter when the hype is over there’s no logic behind it.
Financial literacy in high school
Marlena Jackson-Retondo: Let’s talk about personal finance classes in high school. As of right now, over 30 states, including California, have some sort of ongoing or newly implemented mandate on personal finance class for high schoolers. How do you feel about personal finance classes and high schools and was it something that was offered to you?
Lillian Zhang: I think it’s really great that California in particular is paying more attention to this subject. When I was in high school, we had classes like microeconomics and learning about the government and learning personal finance would ha ve been so helpful for me leaving high school going to college or entering the real world because if the schools don’t teach you, a lot of times like kids and teenagers, students don’t know what to seek out because you don’t what you don’t know, right?
And so I think introducing it early is going to be super helpful for students. And I saw that California is mandating a course to every high schooler starting in the 2030 to 31 school year, which is really great, but that’s still five years away. There’s still a long time. A lot of students within that timeframe still won’t get access, wide access, to the education. And so I think there’s still a lot of work to be done, but I’m really glad to see that California is picking this up.
How do you know who to trust online?
Marlena Jackson-Retondo: We know that most of Gen Z has grown up in a world with at least the internet and then younger Gen Z, obviously, a lot of other digital technologies. And there’s a lot of financial advice online these days. You can find financial advice on any social platform, wherever you look. And we know that Gen Z and younger generations seek out a lot of advice in general through social media. How do you know who to trust, who to follow? Whose advice to apply to your own financial life.
Lillian Zhang: Really great question. I say a lot of people including myself are sharing more of their personal finance journey or lessons kind of learned along the way
I like to follow a lot people who kind of are in like a similar relatable journey and I kind of learn what worked for someone else and see if I can apply their life lessons to me and that’s kind of how I like to learn and I think a lot of my audience looks up to like my profile in a similar way but we also have more of those industry leaders who actually have credentials who talk more about like advice and what you can do.
And so I say every time you see an educational video content or book it doesn’t matter who it’s from you should understand that it’s not like a black and white situation where what they say is the truth. Always use your analytical thinking to decide whether what they said applies to you since everyone’s situation is different.
And also like to emphasize how there are also a lot of like get rich quick schemes that are promoted on social media and if something seems too good to be true, if someone’s promising profits like tomorrow, if you want to get onto this hype stock or investment next week to make money. If it sounds too good to be true, it’s probably a scam.
