It is the most privileged generation ever in terms of having access to avenues for managing and earning money. Through the click of a few buttons, or within a few minutes, they can now invest, save, spend, and do many other things. However, every new financial privilege comes with its own set of financial needs that change constantly. Financial needs of millennials are evolving quickly, especially for those under 35. Thus, their money-making habits.
Millennials make up about 34% of India’s population, making it one of the largest millennial populations in the world. Millennials have grown up with rapid technological developments and therefore are familiar with the ease of using digital platforms. Digital assets are increasingly being preferred as investments and money matters. Aspirations and a fast-paced lifestyle led them to this choice.
The ability to be at home during lockdowns and easy access to investing apps have given New Money Making Habits of Millennials, which are not just limited to stocks or cryptocurrencies. In fact, they are happy to explore a wide array of possibilities. This article explains 10 such New Money Making Habits of Millennials:
1. Investing in stock markets, day trading, and IPOs
With lockdowns and working from home, many millennials have had plenty of time to keep track of stock market developments. Mobile apps like Zerodha and Groww have made day trading a lucrative side income option for millennials.
Millennials in India are also optimistic about the IPOs of new-age companies like Zomato, Paytm, etc. Risks associated with stock markets are not a concern.
2. Investing and trading in cryptocurrencies
While cryptocurrencies are not regulated in India, millennials are the driving force behind the popularity of these digital assets. Crypto Kanoon co-founder Kashif Raza says easy access to crypto exchanges through mobile apps and millennials’ role models like Elon Musk have further stimulated millennials’ interest in cryptocurrencies.
Millennials generally want to earn passive income through their time and investments. Crypto investments are very popular with this age group, in fact, more than 50% of our investors are millennials. Avinash Shekhar, Co-CEO of ZebPay, explains that one of the reasons for this growing interest is long-term returns from crypto assets like bitcoin and ether.
“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.
Bitbns founder and CEO Gaurav Dahake has noted “exciting new investment strategies” that a lot of people are using predominantly among the younger generations. As people age, their investment patterns also change. Those in their teens and early 20s are more inclined to trade crypto, while those in their 60s and older tend to invest in more sophisticated forms, such as a Fixed Income Plan or a SIP aligned to several goals.
It’s probably the best time when people can demand a salary commensurate with their skills. Technological advances are making college learnings irrelevant with each passing year, creating a heavy demand for skilled workers market. Millennials have sensed this opportunity and are upskilling themselves through all means possible. There is no wonder why digital upskilling and education platforms like Upgrad have seen a massive increase in enrollment.
In spite of having to spend money on upskilling, millennials are doing this to find better-paying jobs.
4. Influencing other people’s money habits
In recent years, millennials have taken to using online platforms such as YouTube, Twitter, and LinkedIn to influence money-making habits of others.As a result, they have not only earned hundreds of thousands of regular consumers from their content, but have also earned real money. Nowadays, it is not surprising that anyone who knows something is rushing to disseminate their investment, saving, and money-making advice through videos, articles, and even podcasts.
5. The gig economy as a source of value
Millenials are able to earn extra income through multiple online platforms. In addition to a regular job, making the best use of their skills through freelance work.
In the opinion of Priti Rathi Gupta, Founder, LXME, millennials need to improve their spending, saving, and long-term investing habits, as well as be more financially mindful. Leveraging earning opportunities is one lesson that you can learn from them. Today’s gig economy allows a generation to take advantage of their skills and capabilities and create value.
6. Automating the process of wealth creation
By automating the process of investing or wealth creation itself, millennials are creating a new habit of making money!
According to Swapnil Bhaskar, Business Head at Niyo Money, “Currently, they set up automatic deductions for their mutual fund investments closer to the date when their salary is credited.”. Their savings accounts will be linked to trigger automatic investing based on transactions throughout the month.
7. The digital lending industry
A new money-making habit of millennials is digital lending through various online platforms.
According to a recent survey by LenDen Club, millennials dominate digital lending and borrowing. Due to its technological prowess, simplicity of the platform, and immunity to market volatility, P2P lending is one of the most rapidly growing financial industries in India.
Patel explained millennial interest in digital lending this way: “Today’s millennials are driven by the need to constantly educate themselves on new investment avenues and all things digital.” In order to generate a substantial passive income, they believe it is crucial to have a well-diversified portfolio that combines a long-term investment strategy with double-digit returns. Due to declining returns on Fixed Deposits and unpredictability in equities, they are constantly looking for new investments.
8. Digital gold as an investment
As Millennials look to build and protect wealth, digital gold is becoming an increasingly popular asset. The millennial generation seeks investments that offer ease of investment and higher returns, as well as assets that will help them fulfill their aspirational needs and act as a good emergency fund.
“This tech-savvy generation places a high value on convenient, time-saving applications. Digital gold accessed 24/7 and 365 days through your smartphone. Millennials attracted to it because of its convenience and safety – especially in light of the pandemic. The user of digital gold not only benefits from easy purchasing and selling, but also avoids middlemen fees and reselling costs. Because digital gold can be bought in small amounts (starting at 1 gram), the budget of young professionals or early savers is not a concern,” Rizvi said.
9. Fractional ownership of properties
Millennials are taking an interest in fractional ownership of real estate as a new form of investment. It can significantly increase your income by providing a steady stream of income. Long-term lease agreements and rent escalation ensure a steady flow of inflation-adjusted income. Therefore, they are financially independent.” Parekh says. Millennials are investing in fractional assets to the tune of 30% through HBits, and this rate is rising.
This generation well versed in using their networks. Because they have been exposed to social media and digital connections. Millennials have no trouble tapping into even loose connections, unlike previous generations. Their ability to develop relationships highly valued due to this value. They are in a privileged position for gaining referrals and contract work, so freelancing makes sense.