Why Do Young People Bet on Risks Instead of Saving?

SadaNews - In an era where economic promises have faded away, the youth generation is reshaping the concept of financial security. While saving and cautiously investing in stable, large company assets were the cornerstones of wealth for previous generations, young people today find these pathways no longer effective. Faced with skyrocketing housing prices, increasing debt burdens, and an unstable job market, traditional methods of wealth accumulation are seen as a dead end.

This reality has pushed young people towards new and risky financial strategies. Does this shift represent an escape from reality or a rational response to irrational economic conditions? Is this generation redefining financial security from being long-term stability to a series of momentary opportunities? And does the youth obsession with cryptocurrencies reflect despair in achieving financial security?

According to a report published by CNBC, which was reviewed by SadaNews Arabia, young people prefer to abandon traditional investment strategies in favor of more risky alternatives. This behavior, categorized under the term "financial nihilism," is the conviction that traditional methods of accumulating wealth have failed, reflecting a widespread sense of frustration with the current economic situation. Traditional goals, such as home ownership or long-term saving, are now seemingly out of reach. In contrast, young people view speculative investments like cryptocurrencies, meme stocks, and sports betting as opportunities for quick gains.

Achieving wealth through traditional means has become harder compared to the past

The report clarifies that this behavior is not necessarily reckless, but can be seen as a rational response to irrational circumstances. It quotes Simon Oh, an assistant professor at Columbia Business School, stating, "Achieving wealth through traditional means has become much more difficult compared to the past, making 'risk-taking' the logical option." The report highlights the example of Jacob Kaplan, a 25-year-old who dedicates 30 hours a week to betting on sports events and sees these bets as providing him with a chance to achieve the financial security his generation seeks.

The report notes that this shift coincided with the pandemic, during which new investment channels emerged outside traditional markets. It showcased examples of this shift, such as the increasing popularity of cryptocurrency trading among young people. Based on a survey conducted by U.S. Bank, Generation Z (those born from the mid-1990s to the early 2000s) is the most inclined to invest in cryptocurrencies over the next five years. The report also emphasizes the obsession with meme stocks that began with GameStop and AMC during the pandemic and has recently included stocks like OpenDoor and Kohl's.

The report mentions that young people's desire for a financial safety net reflects the concerns of this generation that traditional economic goals are now unattainable. It quotes economic commentator Kayla Scanlon saying that everything related to the "traditional economic ladder" is out of reach for young people, leading them to feel they have no future and hence "can risk it all."

In conclusion, the report states that this type of high-risk investment is not considered a long-term strategy even by its practitioners. According to the report, Kaplan acknowledges he doesn't see this practice as a sustainable source of income and ultimately plans to direct his profits into more stable investments like index funds or savings accounts.

Economic crises dominate young people's perceptions

In an interview with Sky News Arabia, economist Dr. Abdullah Al-Shanawy stated: "Young generations, especially Generation Z, have developed technological proficiency from their early upbringing in an environment that keeps pace with technological advancements. In reality, modern technologies always attract youth, as they find them easy to use and navigate. They adapt to change more easily, which has provided them with new opportunities they can leverage."

Undoubtedly, cryptocurrencies are highly volatile, but this does not seem frightening to Generation Z, who wish to invest in the latest technologies, where their trust in cryptocurrency trading platforms exceeds their trust in the stock market. Generation Z was raised in an empowered technological world, and they know how to leverage technology for their advantage, as he puts it.

He added: "Economic crises have dominated the perceptions of youth, as financial recession and general economic hardships have prevailed over the past three decades. Undoubtedly, young people have grown up hearing stories from their parents or older siblings, even if they were not born during the worst of these hardships."

Youth's approach is more proactive in securing their financial future

This is due to financial instability, as Generation Z has faced significant financial instability due to crises like the housing crisis and the COVID-19 pandemic that have affected global economies. As cryptocurrencies are not tied to any specific country, they continue to attract the interest of a large number of young people. This has led to growing distrust in traditional financial institutions among newer generations. Consequently, Generation Z has adopted a more proactive approach to securing their financial future. Hence, Generation Z believes that cryptocurrencies represent a new way to conduct business and share value online, according to Al-Shanawy.

He noted that Generation Z strives for well-being at the expense of wealth incrementally: this generation seems to be redefining the concept of financial security and prosperity by prioritizing well-being and independence over material profit. According to recent surveys, nearly two-thirds of Generation Z state that they prioritize peace of mind and personal time over wealth accumulation.

Survey studies indicate that high costs, economic uncertainty, and concerns regarding their long-term financial future are among the significant factors leading to anxiety and stress among Generation Z, as they choose to prioritize personal satisfaction over high financial standards, where financial success increasingly relates to achieving financial stability, resilience, and personal well-being. According to surveys in the United States in March 2025, 64% of Generation Z see peace of mind as more important than building wealth, and 60% of Generation Z prefer a better life over having a large bank balance.

Generation Z trends

In response to a question about Generation Z's upcoming trends, economist Al-Shanawy mentioned the following:

Optimism about financial growth: Members of Generation Z feel optimistic about their financial future, and this positivity drives a desire to leverage financial planning tools, saving products, and investment opportunities.

Savings for success: Accessible financial education and savings incentives can contribute to reducing the savings gap and encourage continued saving habits.

Adapting to monthly changes: This optimism reflects an ability to confront economic challenges. For brands, this represents an opportunity to support young consumers through financial products that adapt to their changing needs.

Banking preferences of Generation Z: This is reflected in the ease of using mobile banking applications, which encourages Generation Z to shift towards solutions based on convenience.

Youth insurance as a high-security net: Generation Z shows a strong inclination toward insurance, such as auto and life insurance.

Reasons for betting on gambling instead of saving

Regarding the reasons young people bet on gambling rather than saving, Dr. Al-Shanawy stated:

Lack of trust in traditional saving systems: Financial crises and health pandemics have increased awareness among Generation Z regarding the instability of financial institutions.

Focus on responsible gambling and ethical concerns: Generation Z is more aware of and concerned about the social and ethical implications of gambling compared to previous generations. They are more cautious about gambling addiction and more likely to support and use responsible gambling tools, such as self-exclusion options, spending limits, and time tracking features. This generation's focus on mental health and well-being influences their approach to gambling. They are more inclined to gamble moderately and seek platforms that promote responsible gambling practices.

Desire for unique experiences: Generation Z craves unique experiences that transcend traditional gambling boundaries. This generation is attracted to the novelty and excitement of new forms of gaming, such as virtual reality (VR) casinos and augmented reality (AR) betting experiences. They want gambling to be part of a broader entertainment package that includes other elements like music, art, and social interaction.

There are biases or behavioral deviations that affect economic decision-making as interpreted by behavioral economics literature.

Generation's bias toward gambling due to poor savings returns and high inflation rates that mock the poor.

The media impact of success stories of cryptocurrency investors has created biases against traditional saving methods.

Dr. Al-Shanawy concluded that Generation Z seeks financial security through cryptocurrencies, viewing them as a refuge for achieving it, despairing traditional channels, and having faith in decentralization and speed, with the desire to build wealth after retirement.

The gambler and the anxious saver are two sides of the same coin

For his part, economist Dr. Emad El-Din Al-Masbah, a professor of economics at the Arab East Colleges, stated in an interview with Sky News Arabia: "Addressing the phenomenon of 'financial nihilism' as a logical reaction for a generation facing future financial insecurity is an accurate diagnosis but overlooks half the picture. The feeling that the economic system no longer works in their favor does not drive all young people toward high-risk speculation, but creates a sharp behavioral division.

He added: "In reality, the nihilistic gambler betting on meme stocks and the anxious saver avoiding all risks are two sides of the same coin; both are extreme responses to an economic reality where traditional success seems out of reach. On one hand, there is a significant segment of young people adopting 'compulsory savings' as a defense mechanism (40-60 percent of Generation Z). They are driven by the fear of financial crises repeating, and they seek to regain control through severe austerity and hoarding money in secure accounts, even at the expense of their current quality of life."

Conversely, another segment adopts "financial nihilism," deciding that slow savings are futile, and their only chance lies in high-risk bets via cryptocurrencies (20-35 percent of young people), viewing it as a "lottery ticket" that could change their destiny, according to Dr. Al-Masbah.

However, Al-Masbah clarified that what is most surprising is that these two opposites may come together in one person. Many young people apply what is known as the 'Barbell Strategy'; they allocate the vast majority of their money to absolute safety (savings) while gambling a small portion on high-risk bets.

He views this hybrid strategy as perhaps the truest expression of their situation: securing the basics of survival while buying a tiny hope for achieving a real financial leap.

Savings no longer meet the aspirations of youth for social security

Economist Dr. Mustafa Badra, in his conversation with Sky News Arabia, believes this issue is the "global hour’s issue" and is closely related to how upcoming generations seek to secure their future.

Dr. Badra pointed out that Generation Z is characterized by its heavy reliance on technology and its extraordinary ability to adapt to modern tools such as digital currencies.

Dr. Badra explained that young people's pursuit of risky investments arises from their conviction that the returns on investment far exceed those of traditional saving, which aligns with their ambition to achieve "quick wealth" through speculation and manipulation of global prices, driven by the success story models they see.

Regarding financial security, Dr. Badra believes that saving no longer meets young people’s aspirations for social security and fulfilling basic needs amid inadequate interest rates, driving new generations to strive for big and fast success through dealing with stocks and cryptocurrencies.