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Mumbai/New Delhi: Having come of age at a time when financial markets were witnessing extreme volatility, millennials and post-millennials are supposedly wary of financial instruments.

How far is this stereotype true in India?

Fresh data from the latest round of the YouGov-Mint Millennial Survey shows that millennials are only slightly less likely to invest compared to pre-millennials. Post-millennials certainly appear to be a lot less investment-friendly compared to the other two age-groups.

This is not surprising, since a large proportion of post-millennials are likely to be students. But even among the working respondents, it is the post-millennials who are least likely to invest, the data shows.

However, these trends do not suggest that the younger generations are intrinsically wary of investments. In general, most Indians start investing at a later age after having accumulated a sizeable amount of savings, and most post-millennials may not have reached that stage yet.

A better way to check for inter-generational differences in attitudes towards investments is to check the age at which different respondents first started investing.

On this metric, post-millennials outrank both millennials and pre-millennials. An overwhelming majority of working post-millennials began investing by the age of 20. In stark contrast, a majority of pre-millennials began investing only after 25, the data suggests. Millennials are somewhere in the middle, with most millennials having begun investments after 20, but before they reached 25 years of age.

Millennials refer to those who have attained adulthood in the early twenty first century, and grew up at a time when the world increasingly became digitally connected. In this analysis, millennials refer to those born between 1981 and 1996 (aged 23 to 38 years now). Those born after 1996 (aged 22 years or below) are referred to as the post-millennials or Gen Z. The rest have been classified as pre-millennials. Together, millennials and post-millennials account for roughly half of India’s adult population.

More than age, it is income that seems to determine investment decisions. Among the young (as well as the old), the richer folk invest more than the poorer lot.

Among millennials, those who feel more secure about their future earnings are more likely to invest, than those who are less certain about their future income. Those who with higher technical degrees (MBA/MD/PhD) are also more likely to invest compared to others.

Compared to other age groups, post-millennials are much more likely to keep their savings as cash and least likely to invest in mutual funds, the data shows. They are however more likely to invest in cryptocurrencies and alternative investments.

The oldest lot is most likely to invest in equities and at the same time most likely to have fixed or recurring deposits in banks, the survey shows.

The third round of the YouGov-Mint Millennial Survey was conducted online between mid-September and mid-October, and solicited the views of 9,324 respondents across 180 towns and cities. Of these, 4908 were millennials, 1888 pre-millennials, and 2528 post-millennials. The YouGov-Mint Millennial Surveys aim to examine the attitudes and outlook of India’s digital natives.

Across generations, the shares of respondents who invest in the equity market and in insurance linked products are lower compared to those with bank fixed deposits, the data shows.

Here again, affluence more than age seems to be the determining factor, with those earning lower incomes more likely to keep their savings in bank deposits and less likely to invest in riskier assets. The lower income cohorts are also less likely to have investments in physical assets such as gold and jewelry. These trends hold across age groups.

Among those who do not invest, a large proportion of respondents, across generations, feel that they do not have enough savings to make investments worthwhile. Pre-millennials and millennials cited this as the biggest reason for avoiding investments.

Among post-millennials, an equally big concern is not having enough knowledge about investing. Among those who do invest, a large proportion of respondents, especially among the young, depend on family members to invest on their behalf or tell them where to invest.

Most pre-millennials say they rely on their own judgment and research to make investment decisions (27%) and very few say they rely on professional advisors to pick investments for them (9.7%). The reliance on professional advice is relatively higher among post-millennials. But even among post-millennials, it is the least preferred source of investment advice.

This is the concluding part of a five-part series on how millennials are coping with the economic slowdown

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