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Millennials Aren’t Crazy About Investments But Tech And Social Media Can Trigger A Change

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Millennials are the biggest generation in the economy now and they represent an important demography in the socio-economic landscape. Millennials loosely refers to people between the ages of 18 and 34 years. Pew Research maintains that millennials are about 75.4 million in number, beating the Baby Boomers (51-69 years) who are about 74.9 million in number.

The fact that millennials occupy a vantage position in the socioeconomic discourse has led to an increased interest in their money and financial habits. Interestingly, millennials are the most tech-savvy generation in the economy but they appear to be the least financially conscious generation. This article seeks to explore the investment habits of millennials with a view to identifying the reasons for some key paradigm shift in their habits.

80% of millennials are not investing in stocks.

In March, the results of a new survey commissioned by Stash (a fast-growing investment app for millennials) revealed that millennials are not crazy about investing. One of the key takeaways from the survey is that 4 in 5 millennials (79%) do not have any investments in the stock market. In fact, 60% of male millennials and 75% of female millennials think investment is confusing. Overall, 60% of millennials believe that the typical investor is an “old white man”.

Analysts at StarlingCapital agree that “in all honestly, the stock market might be a bit confusing and somewhat overwhelming for the uninitiated investor.” Nevertheless, one of the biggest reasons keeping investors out of the stock market is that they think that they don’t have enough money with which they can invest.

According to the results of the survey, 41% admitted that they don’t believe they have enough money to invest in the stock market. When asked how much they think would be enough to enter the stock market, 70% of millennials say they believe that they’ll need $100 before they can buy stocks. 38% of millennials believe that you can’t invest in the stock market unless you have $1000.

Nonetheless, 13% of millennials admitted that they are still out of the stock market because they are paying student debt. David Ronick, CEO of Stash observes that “while technology has transformed the way people can invest in the stock market, it’s crystal clear millennials still desperately need, and want, education around how to start investing.”

Tech and social media to change millennials’ view on investing.

Millennials might not be smitten about traditional stock market investments but digital technology and social media is changing their views on investments. Wall Street Journal reports that 30% of millennials tend to be loyal to brands that are using the latest technological offerings. More so, a BlackRock survey indicated that 45% of millennials are interested in investing now than from five years ago.

The rise of FinTech has led to the emergence of many startups that seeks to draw millennials out of their “comfort zone” and push them to start investing. Millennials typically check their smartphones about 43 times daily; hence, investment tools designed for mobile use are sure to have a warm welcome among millennials. For instance, Tip’d Off is a social investing platform that provides a social layer where peers share information and tips on investing in the stock market.

The rise of Robo-advisors is also attracting millennials to the investment scene. Robo-advisors are apps that use market data and analysis to provide insights to traders with the hope of helping them make smart trading and investment decisions. Using a good robo-advisor app provides you with a personalized investment banker that is always at your beck and call at a microscopic fraction of what it would cost to hire human investment managers.

Final words.

In the final analysis, FinTech might not provide a comprehensive solution that would help millennials get fully involved in the stock market. However, FinTech is already opening up the discussion about the opportunities in the stock market and millennials have started to pay attention. It is still too early to know if millennials will bring the weight of their numbers to influence the stock market. Nonetheless, any startup that finds a way to provide personalized investment services that millennials would embrace should be ready to smile all the way to the bank.

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