Why Millennials Are Dominating the Modern Investment Race?

Aug 28, 2019

Young people these days have developed the tendency to invest in experiences more than material possessions. The increasingly fast-paced lifestyles coupled with the rise of technology has brought a huge difference in the way people look at their ways of living, and this includes finances.

Millennials’ spending habits

For these millennial consumers, experiences matter now more than things. In a 2014 Evenbrite poll, researchers found that 78% of the young respondents would rather choose to spend money on an event like a concert or a getaway rather than a major purchase.

They’re either renting scooters around Cambodia or rocking out at Laneway Festival in Singapore, if not visiting temples in Japan. They aren’t into buying homes or spending money on cars as much as the previous generations, and this difference in priorities are inevitably changing worldwide money habits over time.

Saving and investing for millennials

Here’s another look at millennials and their saving and investing habits, according to The Balance:

  1. Retirement savings isn’t on their priority list right now.
  2. Millennials act cautiously around investments because of previous financial crisis seasons.
  3. Millennials want to retire early.
  4. Millennials want to go the DIY route when saving for retirement.
  5. Millennials like simple investments.

On the brighter side, millennials aren’t just the nomads and directionless hipsters other generations paint them out to be. They aren’t doing poorly, to say the least. Perhaps what needs to be done is to improve their savings and investments to bolster finances.

Another breed of millennials on the rise

A 2017 Morgan Stanley survey showed that millennials, also called Generation Y, are more likely to invest in companies or funds that target tangible and immediate social outcomes. About 84% say their investments can lift people out of poverty, while 90% wants sustainable investing options. It seems that these kids are starting to care about having a positive socio-economic impact on top of doing well financially.

In a survey by Deloitte, it was revealed that there is a general distrust towards financial institutions for this demographic. This distrust is causing them to shy away from traditional forms of investment.

There is also a set of millennials who are taking advantage of technology-dependent opportunities and leading the pack in the investment race. Today, younger people are also investing and increasing their personal wealth immensely in lightning-fast speeds, thanks to online technologies such as peer-to-peer or P2P investing.

Millennials and P2P funding

P2P, also referred to as crowfunding, is a system that matches borrowers with people looking to invest and generate ROI. Companies offer their services to match these borrowers and lenders, which bypasses traditional financial institutions like banks, for lower overhead, higher returns for investors, and flexible interest rates and terms for borrowers.

Heavily driven by technology

Aside from millennials developing a distrust for banks, traditional financial institutions appeal outdated, inefficient, and not applicable to some the modern-day demands of the generation in question. As this lot grew up in the digital age, they are inherently more technologically inclined than any of the previous generations and tend to be more drawn to industries and services powered by technology.

Simple and flexible processes

The 100% online nature of P2P companies allows for an easier and more streamlined investing. To the tech-savvy lot, this means investments can be simplified by cutting out lengthy explanations, massive paperwork, and long lines. If the process can be replaced with automated options, user-friendly interfaces, and multiple cash-out options, then millennials would no doubt favor it.

More room for diversification

A lot of financial experts would stress the importance of diversifying an investment portfolio. And because millennials are well aware of this fact, they are not putting all their eggs in one basket. P2P is a great channel to diversify portfolios because it allows investors to spread money across different types of loans to increase security and create a fall-back in case of default.

The promise of higher returns

Typically, millennials are more interested in taking higher returns despite the higher risks or lack of stability. Unlike their parents who invest in long-term possessions like gold, real estate, and equity, they don’t want to tie their funds with investments that are traditionally safe, yet offer lower returns. This is where P2P becomes attractive. Higher returns with flexibility and more options for diversification can be the perfect vehicle for a thrill-seeking young’un.

To sum up, the millennial generation is a promising demographic for the modern investment race. Some of them are actually getting started in order to get ahead and dominate the pack through P2P investing. Millennials are forward-thinking – they embrace innovation, they have developed new spending habits, and they tend to look at things differently – so these things will be instrumental in the long run.

As more and more companies get on board with the shifting needs and demands of the younger generation, more and more millennials will get into the game of modern investing to gain experience and get their desired ROI.

In the Philippines, fintech company Blend PH highlights its focus on guiding millennials in their investments with the aim of making investing stress-free and easy. “We want young people with PHP 5,000 to have the same investment opportunity as someone with PHP 50,000,” says managing director Jay Bautista.

Young investors can sign up on the platform and invest a minimum amount of PHP 5,000 to loan funds across a range of risk categories in the available in its marketplace. Launched in 2018, Blend now has 20,000 customers and countless of trusted partners both in the financial and SME industries locally.

Be one of the millennials who are dominating the modern investment race! Sign up as a lender on the Blend PH platform and participate in our dynamic marketplace for P2P lending. Start thinking about how you can have a positive impact on society and at the same time, start doing well financially.