Investment for millennials : “so what?”

by | Jul 5, 2016

Today Xi Jinping has cemented his status as China’s most powerful ruler since Mao Zedong, by having his name written into the communist party constitution.

By Adam Tassabehji, millennial and undergraduate at Hult International Business School

Millennials are just as driven, just as ambitious and just as aspirational as any other generation. They have a hunger for betterment, and are more willing and able to make life work for themselves than ever before. And that is something we cherish, but it also has it’s challenges.

The technology that empowers us also distracts us. Our attention spans are probably equivalent to 10% of the previous generation, if not lower. We have access to a huge amount of information, and that can be overwhelming. We want to know what the situation is, what we need to know, what we are dealing with in real time. Overwhelm us and we are gone. If we have to ask you “so what?”, it will be the last question we ever ask you.

I’m 20 years old, and I worry about my financial future. I was very fortunate to have my education financed by my family and don’t have any other debts. Although it is more competitive than ever to find a good job, I feel that with enough hard work I will be able to achieve my career and financial goals. But I still worry. There’s the complete unknowns and what ifs.

My primary concerns are in regards to managing the money that I earn over the years, as it has become much more risky to generate a good return on investment. During my grandparents’ generation, individuals would simply park their money in the bank and without any risk earn 7 – 8% interest every year. Today, investors would have to face substantial risk to earn a similar yield in that period of time.

Investment should be seen as an option for millennials to take control of their finances. But it isn’t. Millennials don’t know the options available to them or understand investment enough. In fact, to most, it’s a completely alien concept.

What drew me to the fintech industry was a case challenge that takes place at my school annually, and this year it was sponsored by UBS. The case was focused on how the wealth management division of the bank could appeal to the needs and interests of the millennial generation. My team and I spent five months to develop a recommended strategy, which we then presented at the London headquarters and won the competition out of 17 teams. Since then, I have been very interested in how financial institutions can develop a more strategic approach to engage and retain millennial clients.

Millennial investors have some key generational differences when it comes to their financial interests and needs. My team and I conducted extensive research on this field and highlighted some of the main points that financial institutions must consider:

Trust: In millennial culture, bankers have the charisma of politicians and there is a very strong ideology that they can’t be trusted. The majority of Gen Y investors, particularly high net worth’s, tend to trust the advice that they receive from a friend /family member more than that of a financial advisor.

Scepticism: Although there is a shift of investors become more independent from banks, ironically individuals have a greater need to verify their decisions externally. Last year, Deloitte found that millennials make less than 10% of their investment related decisions independently.

Technology: The majority of millennials would be more excited about a new financial services offering from a tech company like Google or Apple over a traditional bank. To handle their finances, the next generation are much more open to using innovate technology to manage their money.

Education: A very strong interest in learning practical finance tips and recommendations from industry experts. This generation was raised with a much more complex economic environment and therefore they require more guidance to become comfortable investing.

I think that Invstr is a great example of how we don’t need to rely on banks anymore to make smart investments. In just a matter of seconds, the anxieties that millennials have and the natural aversion we have to finance institutions are put to rest.

Learn: about finance in a practical manner that meets your needs.

Community: Make more informed decisions by seeing what other people think. You would probably check the ratings of a restaurant you want to visit or a movie you want to watch, why not do it for a stock that you want to invest in?

Play: It’s always fun to play games against your friends, until one of them starts bragging, and fortunately when you lose you don’t lose any actual money.

Millennials should expose themselves to Invstr. There’s no “so what?” here – just a simple way to help you gain an awareness of investing and test it’s waters. Our generation can only benefit from having such an awareness.

Want to learn more about the markets and how to become a better investor?

Download the Invstr App now.

ALL RIGHTS RESERVED © INVSTR LTD. 2017

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order. Brokerage services, including fractional trading of US securities, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here. Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.

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ALL RIGHTS RESERVED © INVSTR LTD. 2017

Risk Disclosure:

Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order. Brokerage services, including fractional trading of US securities, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here. Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.

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