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Long Term Investing Is Not Popular With The New Generations

Even though it's a common misconception that young people are wasteful with their money, it turns out that the opposite is really true. Millennials have grown up in a world of lightning-fast technology and instantaneous responses from Google.

According to RBC Wealth Management Singapore relationship manager Ai Ling Toh, one-click access to internet banking is a given for younger people, and this applies to their investment accounts as well.

Toh explains, "The older generation was entirely focused on accumulating riches and expanding their companies." 

long term investing is not popular


Millennial venture capitalist Richard Vibert, who just migrated from Hong Kong to London with Arbor Ventures, believes that investing has evolved dramatically since his parents' age. "They saw saving for a down payment on a property as a lifelong endeavor. Instead of owning a house, our generation is increasingly interested in investing in cryptocurrencies and foreign real estate that can be purchased through an internet platform.”

Lisa Song, a Millennial-age research analyst at the Nomura Investigate Institute America in New York City, says that most of the Millennials she knows and works with are worried right now about financial security. Her most recent assignment is to research wealth management.

New Generation And Finances

In the short term, millennials and Gen-Zers are concerned with things like covering their own expenditures and not having to depend on their parents. Instead of putting money down for the future, their parents saved for the future so they could have a family and retire comfortably. Saving money for the future generation is a well-known family tradition, "RBC Singapore'' relationship manager Gina Chong agrees. As a result, Millennials have a higher propensity to overspend and undersave than other generations. They also know they can spend money from their parents' savings."  It's also worth mentioning that, according to studies, the younger generation dislikes long-term investments. Furthermore, they want to take greater chances and invest their money for a shorter period of time. One of the most prominent examples of this is Forex trading, in which Millennials and Gen-Zers invest for the short term. They are more likely to identify a profitable Forex trading strategy for short-term investments in order to make money quickly. In contrast to the previous generation, who believed that financial success meant having a steady profession and salary, the younger generation believes that a successful career implies generating a lot of money in a short amount of time.

“When we see someone who has developed their own firm, sold it, and then built another one, we're more inclined to look up to them,” he Vibert. “More than making a good living, success is defined by how much you admire successful business people."

This mentality carries over to how you see your job as well. With work and personal life becoming more linked, Vibert argues Millennials are less interested in saving for retirement because of their desire to work longer.

According to Toh's encounters with prospective family business owners, financial success means working for oneself and growing the company that one's parents started.

The majority of them desire to manage their parents' company in addition to starting their own, "Toh said.

It's inconceivable for Millennials to envisage, like their parents, remaining in a single job for the rest of their working lives, says Chong. And according to Chong, younger generations tend to take more risks. 

Millennials' desire to be self-sufficient and entrepreneurial affects their attitude to wealth planning.

Toh asserts that today's young people are considerably different from their parents in terms of seeking out financial assistance.

Where Millenials And Gen-Zers Invest Their Money?

Online stock trading is becoming more popular among Millennials and Gen Zers. In-class lectures for college students were canceled, and students were forced to study through Zoom conversations given by instructors who aren't familiar with the technology.

Young, inexperienced "investors" are rapidly emerging as a consequence of individuals remaining at home all day and trading stocks online.

Most Gen-Z and Millennial investors like to acquire firms with fast growth. Finding a hot stock and jumping on the bandwagon are both necessary steps in this process. Getting out before the stock collapses is critical. In some ways, it's like holding dollar bills up to a steamroller while it's rolling. With a little luck, you'll end up rich, but beware of stumbling and being run over like a bug.

Novice investors, on the whole, are fearful. What's the reason they shouldn't be? The stock market has recovered around 70% from its March Covid-19 lows. To them, "stocks always go up" is the only truth. Thousands of self-taught traders are buying and selling stocks rapidly to lock in gains and work together on sites like Reddit, TikTok, and Discord to lock in earnings.

Rather than buying shares, many active traders choose risky, inexpensive out-of-the-money call options, which provide them with substantially higher leverage and more potential for enormous returns.

To summarize, as generations pass, their perspectives on many issues, including money creation, tend to diverge. If the older generation believes that a good profession generates money steadily and prefers long-term investments, this is not the case for today's young people. One of the measures of success for younger generations is the ability to generate money rapidly. As a result, they like to take greater risks, and short investing is more popular among them.