Suze Orman Says Gen Z's Fashion Obsession Hinders Wealth Building – 'They Would Rather Dress Cool, Go On Their TikToks'

With student loan debt, a tough job market and rising living costs, Gen Z faces unique financial challenges.

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While many factors are beyond their control, financial guru Suze Orman argues that Gen Z's focus on fashion exacerbates their financial struggles.

"They don't understand the value of compounding interest and that the key to their financial independence is their age," Orman told The Wall Street Journal. "[Young people] don't get that. They would rather dress cool, go on their TikToks."

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However, not all experts agree with Orman's assessment. Some argue that while they may not increase their wealth the way Orman would like them to, they are investing.

"Surveys and studies have shown that Gen Z is already investing earlier than generations before them," said Alex Blackwood, CEO and co-founder at mogul Club. "Even for those without the funds to invest significantly, two-thirds believe in the opportunity of the stock market to build wealth."

While there may be disagreement over whether Orman is correct in her assessment of Gen Z's spending habits, there's no denying that TikTok holds significant value for this generation. In addition to being a platform for spending, TikTok has become a lucrative avenue for Gen Zers to earn money as influencers.

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"Depending on the agreements arranged with brands and influencers, the pay can range from $100 a post to a few thousand dollars depending on various factors such as platform and number of followers," said Mawuli Vodi, speaker, educator and author at Financially Present. "This money can more than satisfy the monthly investment contribution Orman is referring to, even if it happens to be on TikTok."

Vodi also notes that dressing cool on TikTok can help Gen Zers make money if they are influencers or brand ambassadors. She points out that social media has changed to a point that gamers can stream live and earn money by playing video games.

"The current influencer and content creator climate allows young people to monetize their efforts more than they would have if they went door to door mowing lawns and shoveling snow," Vodi said. "Considering the power of TikTok, YouTube, Snapchat, Discord, Reddit and Twitch, there are multiple platforms for younger generations to use and monetize – which can further their financial contributions to investing."

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Michael Santiago, senior financial editor at Annuity.org, said that Orman's stance on Gen Z needing to invest at an early age is on target.

"However, I cannot agree with her generalization of young people as financially mindless and valuing ‘dressing cool' and cultivating their social media profile above all else," he said. "There are more than a few Gen Zers that exhibit troubling behavior, but we need to assess this demographic in a thoughtful manner."

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