Understanding Investment Readiness Among Generation Z: A Multidimensional Analysis Of Digital Natives' Financial Decision-Making

Abstract

Purpose & Scope: Using a multifaceted framework, this study aims to bridge the crucial gap between the financial readiness of Generation Z and their technological proficiency by analyzing their investment readiness. The study examines whether the six components of investment readiness—financial literacy, motivation, risk awareness, behavioural control, planning and goal-setting, and digital literacy—are all present. Method: 188 members of Generation Z (mean age = 15.26 years, 63.3% female) were given a thorough survey. Multiple linear regression modelling, variance inflation factor analysis, Cronbach's alpha reliability assessment, and exploratory factor analysis (EFA) were all used in the methodology. Mann-Whitney U tests and independent samples t-tests were used to compare genders. Results: A six-factor structure with excellent internal consistency (Cronbach's α = 0.91) was confirmed by the analysis. Eigenvalues for the retained factors ranged from 9.01 to 1.13, according to EFA. Only Factor 2 (motivation) showed significant gender differences, with men scoring higher than women (3.39 vs. 3.02, p < 0.001). All predictors' variance inflation factors remained below 5, indicating that multicollinearity is not a concern. Implications: One of the theoretical contributions is the validation of a multifaceted framework for assessing the investment readiness of digital natives. The results indicate that financial education programs should target multiple competency domains simultaneously, employing gender-sensitive strategies to enhance female motivation. The study promotes tailored strategies based on unique psychological profiles, challenging conventional demographic-based interventions. Conclusion: Investment readiness among Generation Z requires comprehensive, technology-integrated educational interventions that recognize their unique characteristics as digital natives. JEL Groups: G11, D14, and J13