While the pre-covid period for millennials was less about saving and investment and more about spending, in the post-covid world they appear to be more interested in making and saving money fast
Millennials are apparently the most privileged generation ever in terms of access to avenues for managing and making money. Now, with a click of few buttons, or within a few minutes, they can invest, save, spend and do many more things that were unimaginable until just a few years ago. However, every new financial privilege comes loaded with new financial needs that keep changing all the time. Especially for millennials, their financial needs are evolving fast. And, hence their money-making habits.
For example, till March 2020, before the onset of the Covid-19 pandemic, millennials in India were famous, or rather infamous, for splurging on a new-age lifestyle that demanded heavy expenses. But, unlike the elder generations, millennials were not shy of spending big even if it required getting into a debt trap via credit card payments or personal loans. However, financial priorities for millennials changed fast as soon as the pandemic started showing its ugly colours, leading to job losses and pay cuts across the country.
India has one of the largest millennial populations in the world, forming around 34% of the country’s population. Millennials have grown up alongside rapid technological developments and hence understand the ease of digital platforms. Even when it comes to investments and money matters, they increasingly prefer digitally procured assets that fit in with their fast-paced life and aspirations.
While the pre-covid period for millennials was less about saving and investment and more about spending, in the post-covid world they appear to be more interested in making and saving money fast through all means possible including risky stock market bets and unregulated cryptocurrencies.
Being at home during lockdowns and easy access to investing apps have given wings to millennials’ new money-making habits, which is not just limited to stock markets or cryptocurrencies. Rather they are happily exploring many more options. This article explains 10 such new money-making habits of millennials:
1. Day trading, investing in stock markets, IPOs
Lockdowns and work from home have given many millennials enough time to keep a track of stock market developments. Access to easy-to-use mobile apps like Zerodha, Groww and Upstox has made day trading a lucrative side income option for millennials.
Indian millennials are also bullish about IPOs of new-age companies like Zomato, Paytm etc. They are not scared of the stock market risks
2. Investing, trading in cryptocurrencies
Even as cryptocurrencies are not regulated in the country, millennials are the largest force behind the popularity of these new-age digital assets in India. Crypto Kanoon co-founder Kashif Raza says easy access to crypto exchanges through mobile apps and the active interest of millennials’ role models like Elon Musk has further pushed millennials towards cryptocurrencies.
Millennials in general are drawn towards a culture of earning passive income on their time and investments. “Crypto investments are very popular for this age group, in fact, more than 50% of our investors are millennials. Long-term returns from the crypto assets like bitcoin and ether are one of the reasons for this growing interest,” says Avinash Shekhar, Co-CEO of ZebPay.
“Another one is Millennials are open to learn this new technology (Blockchain) and explore new opportunities that come with it— Decentralized finance or Defi, staking, liquidity pools, NFTs are such new and trending opportunities,” he adds.
Gaurav Dahake, Founder & CEO of Bitbns has noted “exciting new investment strategies” that a lot of people are using predominantly among the younger audiences. He says that as age progresses, their investment pattern also evolves. So for instance, while people in their teenage and early 20s indulge more in crypto trading, the senior folks consider more evolved forms of investing such as a Fixed Income Plan or a SIP aligned to multiple goals.
It is probably the best time when people can demand a paycheque in proportion to the skills they command. Rapid technological advances are making college learnings redundant with each passing pay, creating heavy demand for skilled persons in the job market. Millennials have sensed this opportunity and are upskilling themselves through all means possible. No wonder why digital upskilling and education platforms like Upgrad have seen a massive rise in the number of enrolments.
While upskilling is something for which millennials have to spend from their wallets, they are happily doing this to seek better-paid jobs in the market.
4. Influencing money habits of others
Many millennials have taken to influencing others’ money making habits through online platforms like YouTube, Twitter and LinkedIn or through blogging. In the process, they have not just earned hundreds of thousands of regular consumers of every bit of content they put online, but also earned real money. It is not a surprise these days that anyone who knows something is rushing to distribute their investment, saving and money-making Gyan through videos, articles and even podcasts.
5. Creating value from the gig economy
Multiple online platforms are enabling Millenials to make extra money, apart from the regular job, by making the best use of their skills through freelance gigs.
According to Priti Rathi Gupta, Founder, LXME, while millennials need to work on their spending, saving and long term investing habits, being more money mindful. One lesson that can be learnt from them is leveraging earning opportunities. The gig economy today has enabled the generation to effectively make use of their skills and capabilities and create value.
7. Automating wealth creation
Millennials are creating a new habit of money-making by automating the process of investing or wealth creation itself!
Swapnil Bhaskar, Business Head at Niyo Money, told FE Online, “Currently, they are doing it by setting up auto-debit for their mutual fund investments closer to the date when their salary gets credited. Moving forward, they will be able to set-up triggers for automated investing throughout the month based on the transactions in their linked savings account.
8. Digital lending
Digital lending through various online platforms has become one of the many new money-making habits of millennials.
In fact, a recent survey by LenDen club found millennials to be dominating both digital lending and borrowing on its platform. Bhavin Patel, Co-founder & CEO, LenDenClub, says P2P lending is one of the most rapidly growing financial industries in India due to its technological prowess, simplicity of the platform and immunity to market volatility.
Explaining why millennials are interested in digital lending, Patel said, “Today’s millennials are driven by the need to constantly educate themselves on new investment avenues and all things digital. They recognise the importance of having a diverse portfolio that is a combination of long-term investment strategy and double-digit returns to generate a substantial passive income. With declining returns on Fixed Deposit and unpredictability in equities, they are constantly on the lookout for newer investment avenues.”
9. Investing in Digital Gold
According to Ashraf Rizvi, Founder and CEO, Gilded, digital gold is increasingly becoming the asset of choice among millennials to create and protect wealth. Millennials look for ease of investments and higher returns but also for assets that help them fulfil their aspirational needs and are a good emergency corpus.
“This tech-savvy generation puts a premium on convenient, time-saving applications. Since digital gold is available on your smartphone, 24/7/365 millennials are gravitating toward the convenience and safety it offers – especially in light of the pandemic. Not only does digital gold benefit from easy buying and selling, but the user also avoids middlemen charges or any reselling costs. Also, because digital gold makes the purchase of small amounts possible (starting at as little as 1 gram), budget is not a constraint for the young professional or early-stage saver,” Rizvi said.
10. Owning fractional properties
Fractional ownership of property has emerged as a new investment concept in which millennials are taking interest. Shiv Parekh, Founder of hBits, says fractional ownership “is an investment tool which is best suited for youngsters as it brings in better and secured returns, as commercial real estate (CRE) offers higher returns. It offers a regular flow of income which can add to existing income handsomely. The long lease contracts and rent escalation ensures a steady flow of inflation-adjusted income so they are financially independent.” Parekh says hBits has seen around 30 per cent investment in fractional assets being undertaken by millennials through and it is increasing.