Cautious millennials choosy on investments

Dealing With Uncertainty

- Millennials faced the most uncertain economic future after Covid

- Majority grown to become more cautious about finances

- Medical emergency accounts for 36% in loans by millennials

- It's followed by unplanned expenditure (19%) and education (14%)

Mumbai: More than 43 per cent of the respondents across India stated they started making financial decisions independently between the ages of 21-25 years. As millennials are evolving and growing to take on additional financial commitments, there is a growing realisation among the cohort for responsible investing. As part of their preference for ongoing investment and growth, millennials are eyeing to ace financial discipline and regularity with over 47 per cent of respondents expressing their penchant for SIP/recurring deposits as their preferred investment pattern followed by 31 per cent of respondents who favoured goal-based savings, says a survey report.

Although young millennials may not have much to put aside, the study indicates that they are aiming to adopt smart savings habits. Also, the cohort's inclination towards SIP and goal-based investment plans implies their commitment to regular savings, says the survey carried out by CASHe.

With millennials growing increasingly wary about money matters post-pandemic, the study indicated that a vast majority of the respondents (41 per cent) set aside a budget of anywhere between 10-20 per cent of their annual income as savings. The data showcased the growing trend of millennials adopting responsible financial behaviour at an early age. However, in contrast it also stated that a considerable chunk of millennials (around 30 per cent) set aside less than 10 per cent of their annual income as savings which raises concern in regard to the cohort committing to regular savings. The report also highlighted that millennials are rapidly evolving as 'forward thinkers'. While boomers are either into retirement or nearing it, millennials have plenty of time to plan and save. However, there is a growing consciousness among millennials to start saving early for their post-retirement life. More than 34 per cent of the respondents stated that they were highly conscious of the matter and have started saving already.

Millennials are increasingly turning to digital alternatives and prefer to do their investments themselves. In terms of preference for new-age alternative asset classes, digital gold topped the charts with more than 33 per cent of the respondents voting for it. It clearly showcased millennials' inclination towards gold as a stable asset class and a profitable instrument offering long-term gains. Digital gold offers the digital native cohort the best of both worlds – owning physical gold with the benefits of new-age technology that eliminates the hassles of physical inspection and onus. This was followed by cryptocurrency (29 per cent), fractional ownership (17 per cent), P2P lending (12 per cent), and US equity investment (9 per cent).

With increasing awareness about tax saving modes and avenues, millennials are joining the clique of savvy investors who look at both future returns and present tax savings. According to the survey, more than 56 per cent invested in tax saving plans.

As millennials faced the most uncertain economic future of the generation in the wake of the pandemic, majority of them have grown to become more cautious about finances amid the pandemic. According to the report, medical emergency, accounting for 36 per cent, was the top reason for millennials availing loans in 2022. This was followed by unplanned expenditure and education accounting for 19 per cent and 14 per cent respectively.

The report also highlighted that banks continue to lead the stride as the most preferred go-to lending avenue among millennials. The survey highlighted that 41 per cent of millennials secured loans from a bank whereas 35 per cent of the borrowers opted for a digital lending platform.

Talking to Bizz Buzz, V Raman Kumar, founder and Chairman, CASHe, said: "Millennials, the first generation to be known as digital natives, have made technology an integral part of their everyday life and therefore money management too is no exception. As the country's largest workforce, millennials are driving a paradigm shift in the wealth-management industry. The cohort is seeking new-age offerings at the intersection of technology and innovation that help them pursue a custom-fit journey that suits their investment appetite and goals."

The survey clearly showcases how millennials today are rapidly evolving as investors, borrowers, and wealth creators. CASHe has engaged with the Indian millennial cohort extensively and has been an integral part of their aspirational journey, he added. CASHe is an AI-based, credit-led, non-bank, mobile-first financial wellness platform focussed on making financial inclusion possible by serving the underserved digital cohort in India.

Millennials, the first generation to be known as digital natives, have made technology an integral part of their everyday life and therefore money management too is no exception. As the country's largest workforce, millennials are driving a paradigm shift in the wealth-management industry

- V Raman Kumar, Chairman, CASHe