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Throughout every sector, Millennials are driving changes. Now, Millennials are taking advantage of a variety of high-tech and social media tools that allow them to plow their wealth into investment vehicles of their choice. Given their love for anything tech-related, it should come as little surprise that Millennials are now leveraging social networking platforms, websites, and mobile apps to do everything from following stock-picking tips to finding financial planners. One thing is certain: When it comes to investing, Millennials are taking a completely different approach from that of their parents and grandparents.
How Millennials Invest Differently
No longer are stock tips being passed along on the golf course. When today’s generation of investors want to purchase shares, they do not reach for the telephone to ring up their broker. Today, all it takes are a few clicks on an app for Millennials to review a prospectus, get advice, and even make an investment. According to The Wall Street Journal, more than 30 percent of Millennials surveyed recently stated they are more loyal to brands that are up-to-date in regards to technology.
While Millennials can sometimes be wary about jumping into investment coming off the heels of the recession, the availability of social media tools is making it easier and more comfortable for this age group to learn about investing.
The Potential Drawbacks to Technology-Based Investments
If there is a drawback to the availability of social media for investing, it is the potential to develop unrealistic expectations for immediate results. As a whole, the Millennial generation are accustomed to fast results. Frequently dubbed as the instant gratification generation, Millennials check their phones as many as 43 times daily. In an age where services, products, and information are just a tap or a swipe away, it can be easy for Millennials to fall into the trap of expecting instant success when using social media and other high-tech tools to invest. An appetite for adventures combined with a preference for game-playing elements can make the situation even more risky.
As is to be expected of an adventure-seeking, forward-moving generation, Millennials tend to be more bullish about investments than previous generations. BlackRock also reports that Millennials are not only more confident about the future but also spend more time reviewing their investments than Baby Boomers. The report found that while Baby Boomers spend only an average of two hours reviewing their investments each month, Millennials dedicate up to seven hours per month studying their investments. Given the fact that Millennials were coming of age when their parents lost their savings as a result of the financial crisis, this is hardly surprising. With such experiences informing their teenage and young adult years, Millennials are committed to protecting their financial futures.
In an effort to make certain they do not experience the same problems, Millennials are approaching investing in an entirely different manner from Baby Boomers. While Boomers only put away an average of 11 percent for investing, Millennials put away 18 percent for investing.
Taking Control of Investing with Online Tools and Apps
Millennials have become accustomed to using technology for every aspect of their lives, so it only makes sense that digital technology has become a significant component in their investments, as well. E-Trade reports that people under the age of 35 are more likely to take advantage of online tools for monitoring their investments. With such tools, investors are able to take greater control, reviewing their portfolios anytime they desire rather than waiting for reports to arrive in the mail on a quarterly basis.
A report from Forbes found that more than $1 billion has been funneled into tech-related personal finance companies over the past few years. During the first quarter of 2014 alone, this sector received an investment of $261 million. There has been a particular emphasis on startups that target young investors by providing mobile-enabled, user-friendly features.