Home / Money / Personal-finance /  How millennials in India invest their money

Mumbai: A large proportion of millennials entered the job market at a time when financial markets were extremely volatile. Not surprisingly, many studies across the globe find that the generation has grown wary of stock markets. In India, too, millennials appear to be wary of the stock markets, data from a recent survey conducted jointly by the Indian arm of global market survey firm YouGov and Mint shows.

Yet, a closer examination of data suggests it is affluence rather than age that explains the differences in investment patterns among different age-groups or cohorts. The YouGov-Mint Millennial Survey conducted in July this year shows that one-third of working millennials put their money only in risk-free instruments, such as fixed and recurring deposits, without investing anything in equities.

Millennials refer to those who attained adulthood in the early 21st century and grew up just when the world became more digitally connected.

Among older millennials, 48% invested in equities, while among younger millennials, the figure was 4%, data shows. A higher share of the older generation (54%) made equity investments of some kind.

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A city-wise analysis shows that among the working adults of age 22-53 years, those residing in Hyderabad are least likely to invest in stock markets, while those residing in Kolkata are most likely to do so. Only 35% of the surveyed respondents of this age group from Hyderabad said they invest in equities. In Kolkata, the percentage of those investing in the stock markets was 61%. In both Delhi-NCR and Mumbai, a majority of the respondents said they invested in equities. A little less than a majority of respondents in Bengaluru also invested in equities.

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The YouGov-Mint Millennial Survey was conducted online among 5,000 respondents from YouGov India’s panel of internet-users spread across more than 180 cities. A little less than a thousand belong to Gen X (aged 38-53) in this sample. Older millennials (aged 29-37), younger millennials (aged 22-28), and post-millennials (18-21) all have more than a thousand representatives in the sample.Those born before 1965 (pre-Gen X) and post-millennials have been excluded from this analysis, as only a small share of these age-groups are currently working.

The survey data shows that there is no stark gender difference among working millennials when it comes to investments.

However, the share of millennial men investing in equities is a bit higher, compared with that of millennial women.

Compared to their older generations, millennials are less likely to invest in each of the financial instruments for which data was collected. However, the difference between older millennials and younger millennials seems sharper than the difference between older millennials and Gen X.

The fact that younger millennials have lower earnings, compared with the other two demographic cohorts, may explain this difference.

The tendency of millennials to consume more and save less may also explain why millennials tend to invest in lower numbers compared with older cohorts. Nonetheless, income differences could be a bigger explanatory factor.

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Older people, with more accumulated savings and often with higher incomes than the young, have more capacity to invest in different products.

The impact of earnings on investments becomes clear when we slice the data on millennials by income group. The analysis shows that richer millennials tend to invest much more and diversify their investments more compared with poorer millennials.

The richest lot invest in equities almost twice as much as the poorest, suggesting that it is the cushion of high earnings that leads people, young and old, to bear more risk.

Class, more than age, seems to determine how much one invests and the nature of the investments one chooses.

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