In today’s current events it has shown the importance of preparing yourself financially because anything can happen. Many older generations are preparing to retire and are finding it harder because they did not prepare themselves. Individuals usually do not think to start saving money at 20-25 years old, for money that they won’t touch till they are 60-65 years old. Kai Rabinovitch discussed numerous problems that future generations will encounter and how to prepare for them in his Ted Talk, Gen Z’s Financial Problem. He touches on many ideas that could help generations prepare financially like saving early, having multiple streams of income, and educating yourself financially.

“There will most likely be more economic collapses that happen with no warning, so it is important for Gen Z and future generations to prepare financially.”- Josh Pandak

Importance of Saving

In the Ted Talk, Rabinovitch starts off talking about the importance of a nest egg, which he defines as an amount of money that will be saved for the future. He started his nest egg when he was very young and emphasizes numerous times about the importance of investing early. He believes the pandemic caught many people off guard who were not saving and opened their eyes to the importance of it. I believe these are all very good points and think that individuals in Gen Z can learn from the pandemic and other generations about saving. The pandemic showed me the importance of saving money young, so you can gain financial independence earlier in life. Rabinovitch also mentions a few points about learning from adults who did not save.  I have also seen many adults who have not started saving, which is forcing them to work longer.

Rabinovitch ended by giving advice on the three types of  accounts everyone should have. He believes everyone should have a basic risk-free savings, a tax-free retirement, and an investment account. This might have been his most obvious point, but also the most important. I believe need a savings account in case anything goes wrong and a retirement account like a 401k, so you can retire at a younger age. Most individuals should have at least both of these accounts, but not everyone has an investment account. I think it is wise he brought up the idea of an investment account because as an individual you can either manage it or let it run for years.

A point that Rabinovitch did not bring up regarding the importance of saving is many tools previous generations relied on may not be around by the time we retire. Many companies do not offer pensions and there is the possibility social security might not be around by the time we retire, so those are other reasons I believe you should start saving early.

Importance of Multiple Streams of Income

Rabinovitch talks about another way Gen Z can prepare for financial problems, which was having multiple streams of income. He believes it is very important for people to have numerous ways to make money, just in case something like the pandemic happens. He emphasized many people lost their only stream of income due to the pandemic and had to rely on stimulus checks.

I believe the emphasis he made on having multiple streams of income is his best point in the Ted Talk. I think if everyone had multiple streams of income, they would not have to worry as much if one goes away. It is possible sometimes to have streams of income that are passive, which is a big reason why I plan to have multiple streams of income. I know a lot of people currently who have many different streams of income, and that allows them to either live more of their life right now doing what they love or down the line they will be able to retire earlier.

Educating Yourself About Finances

Rabinovitch made many points on how Gen Z can prepare for financial problems, but the one he was stressing the most was the importance of educating yourself about finances. He thinks everyone should educate themselves and be prepared for a future worse economy. Rabinovitch believes personal finance should be a requirement in high school, because it can lesson the amount of financial difficulties in their lifetime.

I agree with these statements and believe everyone should be required to take a finance course. If you are not a business student or have no interest in finance, you will most likely never take a personal finance course, so doing so can help a lot in the future. I think if everyone educated themselves on finances, there would be less problems and most people could become economically stable.

I believe Rabinovitch’s Ted Talk was very helpful and is something not just business majors should watch, but everyone. The pandemic and previous economic collapses have shown the importance of saving, having multiple streams of income, and educating yourself on personal finance. There will  likely be more economic collapses that happen with no warning, so it is important for Gen Z and future generations to prepare financially.