GENERATION DISRUPTED: HOW MILLENNIALS ARE RESHAPING INVESTING
13 August 2019 – As the largest generation in the world today, it is impossible to ignore the impact of millennials on every facet of modern life – including investing – and this will only increase as they enter into their prime earning years.
Millennials, loosely defined as those born in the 1980’s to mid-1990, make up about a quarter of the world’s population. Nearly nine in every 10 millennials live in emerging economies. South Africa has over 14 million millennials or approximately 27 percent of its population.
Attitudes towards money and investing differ greatly from previous generations. “Millennials are sceptical of the financial institutions and strategies that their parents used. They’re a product of the uneasy economic conditions they’ve lived through, and are the first generation of true digital natives,” comments Sean Sanders, Co-Founder of Revix, an investment platform that provides exposure to the global cryptocurrency market.
1. Their financial goals are different
According to the 2019 Deloitte Global Millennial Survey, those who started working post the 2008 global economic crisis have endured long periods of slow economic growth. They have lower real incomes and fewer assets than previous generations, as well as higher levels of debt. Of the 16,000 survey respondents, 31 percent do not have full-time employment. “Millennials often live with their parents, and delay renting or buying their first property. Many prefer to spend their money on experiences and travel,” adds Sanders. As many are unemployed or participate in the gig economy, they may struggle to plan for their financial future. The World Economic Forum predicts that by 2050, when millennials in the world’s eight largest pension markets start to retire, the retirement savings gap will be $427tn.
2. They are early technology adopters
Millennials, unlike any generation before them, have had almost every aspect of their lives moulded by technology. “For millennials, mobile is the medium of choice. They want to track their investments in real-time from their iPhones. Investing needs to be straightforward and transparent, and would rather take a photo of document than complete paperwork,” adds Sanders. This has given rise to low-cost and easy-to-use investing and saving platforms to millennials. They are used to operating in a digital goods world, says Sanders: “Millennials grew up exchanging pocket money for CandyCrush credits and other intangible digital goods. While their parents considered this frivolous spending, they viewed this as a valid exchange.” It’s not surprising that this generation also influences the increased adoption of technology in investing. Bloomberg reports that robo-advisors, or artificial intelligence driven advisors, assets under management will grow from $50 billion to $2 trillion in the US alone by 2020.
3. They are interested in cryptocurrencies
More than any other generation, millennials are interested in cryptocurrencies. A study of 1,000 affluent American millennials by global communications firm Edelman, show that 25% of respondents use or hold cryptocurrency, 31% are interested in digital currencies while 74% believe that blockchain will make the global financial system more secure. “Crypto appeals to millennials on both a practical and a philosophical level. With no middlemen involved, there are lower fees for using and transferring it and blockchain technology keeps a consistent and incorruptible record. This emerging asset class resonated with the generation that distrusts financial institutions and exploitative business practices in general,” comments Sanders.
4. They’re socially conscious
The 2019 Deloitte Global Millennial Survey indicates that Millennials support companies that align with their values, and lessen or cut relationships when they disagree with a companies’ business practices or values. “Younger investors are leading the way in ethical investing – they lean towards shares and funds that measure progress on issues such as diversity and environmental values. They want to make a difference and see their investment decisions as just one more way to do this,” concludes Sanders.
Lastly, for comparative context, cryptoassets are still fledgling in scale: even at their peak market capitalisation of $830 billion in January 2018 (which had declined to $360 billion by August 2019), the combined global market capitalisation of the cryptoasset market was less than 0.3% of global financial assets and the total value of cryptoassets worldwide was less than 1% of world gross domestic product (GDP). By contrast, at the peak of the dot-com bubble in March 2000, the combined market capitalisation of US technology stocks was almost one-third of world GDP, and prior to the 2008 financial crisis the notional value of credit.
Revix is a digital asset management platform which provides the tools for investors to intelligently manage their own diversified portfolio of digital assets. Using proprietary Bundling Technology and Smart Portfolio Management software, Revix makes it safe and simple to invest over the long term in a diversified reputable basket of cryptocurrencies. Revix is incorporated in the UK and has ambitions to expand into several regions over the coming months.
For more information visit: www.revix.com