Millennials aren’t investing. However, we believe that millennials are natural born investors. We decided to test our theory by looking at common reasons why millennials aren’t investing and proving them wrong.
- “I’m not an investor”
It seems the persona of an investor has become too tightly associated with white-collar tradition. In fact, a Harris Poll highlighted that 60% of millennial women associated the term “investor” to an “old, white man.” In addition to this, research shows that the number one reason why millennials aren’t investing is because they don’t believe it’s for them: only 9% of millennials consider themselves to be investors.
So, whilst the term “investing” might sound like gibberish to some, the reality is that all you need to be an investor is to invest. It’s as simple as that. Oddly enough, millennials, who characteristically warm towards access and gravitate away from ownership, choose to invest all the time. They invest in holidays, concert tickets and social interactions. Millennials are born investors; they’ve just chosen the asset class of experience. Investing is the act of putting money into goods with the hope of achieving a profit. 78% of millennials said they would rather spend their money on an experience, with 69% of them believing that “attending live experiences help them connect with their friends, their community and people around the world.” So when Millennials put their capital into concert tickets, their profit is social connection.
- “I have no money to invest”
When competing against all other generations, millennials have the lowest average income, the lowest bankcard balance and 20% less cash than baby boomers did during the same stage of life. Studies show that over 40% said they don’t have the money to invest. It sounds bleak, but there’s a silver lining.
Millennials are living in an era where technology is flipping the financial system on its head. The new, disruptive world of finance offers inclusivity and opportunity. Put simply, Millennials don’t need to part ways with much cash to start investing. Take property investment for example: a baby boomer would need a deposit, a mortgage and a lifetime of debt. But now, thanks to property crowdfunding, a millennial can drop £10 into a house and call themselves a landlord; no deposit, no mortgage, no debt. You can buy a slice of a property and earn your proportionate share of rental income. You can dip your feet into the world of property investment, £10 at a time.
- “It’s too risky”
Research has shown that millennials are risk averse money savers who would rather have their finance in cash. The reason? Their day to day is full of societal turbulence, political instability and economic strain. In fact, “Millennials are very financially aware, probably more so than any other generation before them, because many of them came of age during the financial crisis and its aftermath.”
But risk-aversion shouldn’t be synonymous with investment-aversion. There are a million different types of investors, each one choosing a different level of risk. Likewise, there are a million different types of investments, each offering a different level of risk. You can play it safe or take a chance. There’s no one way to invest. At Property Moose, we list a variety of products, each holding a different risk/reward ratio. The way you shape your portfolio is entirely your choice. On top of that, millennials have heard horror stories about “how bad things can go when you don’t plan ahead.” Their awareness of economic turbulence sets them up to be great investors. Why? Because it forces them to think about the future.
- “It takes too long”
Millennials have been nicknamed generation “We Want It Now.” With everything accessible and on-demand, like food from Deliveroo, information from Google and entertainment from Netflix, it’s no surprise the generation is used to instant gratification. However, millennials are the luckiest generation in terms of time. Why? The power of compound interest.
Born between 1992 to 2000, Millennials have a life expectancy of 100+ years. Assuming you started investing at the age of 20 in buy-to-let property through Property Moose, where returns were received on a monthly basis, you could experience 240 compounding cycles before you even turned 40! (That’s not even middle-aged when your life expectancy is 100+). So, if you were earning a return of 6%, making monthly contributions of £50 and reinvesting your returns, you could have £23,217.55 in 20 years.
So, contrary to popular belief, millennials might be natural born investors. Here at Property Moose, we’re trying to simplify property investment for everyone. Find out more about how it works, or browse through our current opportunities now.
Written by Jenna Kamal
Disclaimer and Legals
Property Moose does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are projections only and should not be relied on. If in doubt, please seek the advice of a financial adviser. Your capital is at risk if you invest. This post has been approved as a financial promotion by Resolution Compliance Limited.
Property Moose is a trading name of Crowd Fin Limited which is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (no: 574048).
