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Here's what these Gen Z investors learned when they opened robo-advisor accounts

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Gen Z may also be Gen DIY.

"There's an underlying assumption that almost any task can be taught or learned by yourself," said Jonah Stillman, co-author of Gen Z @ Work.

"I grew up with YouTube: I can log on and learn to play an instrument, write code or tile a bathroom floor," said Stillman, who is 20.

Members of Gen Z apparently have the same attitude toward investing.

"Why would I go to someone for financial advice when I can find what I need online?" Stillman asked.

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This generation's love of tech and alternative solutions make robo-advisors — an automated, low-cost way management service — a perfect fit, Stillman says.

Whereas their grandparents would be mystified at the idea of texting money by phone, Gen Z was quick to start using Venmo.

"It's DIY, it's tech, it's an alternative to an older model," Stillman said.

Another draw: the low bar to participation. "It's cheap and accessible," Stillman said.

Linda Zhang, senior advisor at SoFi, and CEO and founder of investment firm Purview in New York, agrees that robo-advisors might be a better fit than traditional brokerage firms, which may have high minimums.

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The biggest misconception is fear of complexity, says Zhang. Gen Z might think investing is hard and confusing. "You can start simple," Zhang said. "Invest in market indices, and figure out how much risk you are comfortable with."

Two things to check: Since fees cut into your gains, look for low monthly maintenance fees. Don't forget to compare features. Some apps, like Acorns, offer the ability to open an individual retirement account; others have access to live-person support staff.

Don't think you're giving up some essential part of the experience because there's less human involvement, says Eric Bronnenkant, a certified financial planner, CPA and head of tax at Betterment.

Investing apps are designed to make it easy to open an account and manage your portfolio, he says.

Here are five lessons from Gen Z investors who learned a thing or two about investing when they opened accounts on robo apps such as M1 Finance or Betterment.

1. 'I was shocked …' 

Drew Cheneler
Source: Drew Cheneler

Drew Cheneler, 22, says he was just messing around when he first opened an account with online broker Robinhood.

Cheneler, an active duty service member and personal finance blogger, thought he'd be at ease buying and selling stocks or index funds — his parents had talked to him about investing — but he wasn't prepared for the feeling of catapulting into the markets.

Turns out, there's a world of difference between reading about something and actually doing it.  

Cheneler was a 19-year-old college freshman at the time. "I didn't expect to be able to buy a stock that same day," he said. "I was shocked at how easy it was."

2. 'OMG, I lost $2!'

Cheneler didn't expect to lose money. In the beginning, he was enjoying commission-free trades and bouncing in and out of stocks pretty quickly. "I didn't understand the whole long-term mindset," he said.

He laughs when he remembers his 19-year-old self. "OMG, I lost $2," he said. "I sold everything."

Now if he sees that market swings have reduced his balance by a few hundred, he knows the market will go back up. He also considers it a buying opportunity.

3. Taxes?

Brendan Whitaker, 24, learned to research stocks and set aside small amounts of money to invest.

The biggest thing, says Brendan Whitaker, 24: "There's this major tax consequence."

It wasn't really about the money. Whitaker, who lives in Greensboro, North Carolina, says it was a pretty small amount. "I was more shocked I had to report my trades to the IRS," he said. "It's a whole other world of bureaucracy and paperwork."

Whitaker had been bouncing in and out of individual stocks, taking advantage of commission-free trades. "As soon as tax season starts approaching, they send out tax notices," he said.

At the time, Whitaker had just started his own brand strategy firm, and it was his first time filing taxes.

"I hadn't thought about it until it was something I had to deal with," he said. "Now I know how to do everything properly." 

4. When the market swings

Suzanne Ctvrtlik, 23, was surprised by her emotional responses as a new investor.
Source: Suzanne Ctvrtlik

Some aren't prepared for the tide of emotions that investing can spark.

Suzanne Ctvrtlik, 23, a freelance graphic and web designer in Houston, opened a Roth IRA.

"Say you invest $500 in your IRA every month," she said. "Being able to stomach if it goes up or down a little, riding those highs and lows for the first time."

Eventually your emotions calm down when you learn to detach a little, says Ctvrtlik, who also has a YouTube personal finance channel. Originally, though, she was surprised at the intensity of her response.

What made the difference, Ctvrtlik says, is continuously investing. "Watching it go up and down, and just realizing it does change over time."

5. The earlier, the better

The top thing that still amazes Cheneler about investing is the difference when a person first starts investing makes.

If someone waits till they finally understand the need to open a retirement account, Cheneler says, they've lost valuable investing time.

"It's pretty insane, the difference between starting at 19 versus 25 or 26," he said. "No way a 26-year-old can catch up to the number I started with."

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.