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Crowdfunding for Millenials

Thursday, November 3, 2016



Millennials have been a hot topic of discussion. There have been on-going attempts to bring insights about this generation of youths. Indeed, they are worth the attention. Millennials make up slightly more than a quarter of the global population. They are now the largest generation in workforce surpassing the Generation X.
 

Of key interest is the investing habit of Millennials, where evidences suggest that they are more interested in alternative form of investments. Compared to the previous generation, Millennials are investing less in stocks and bonds. Interestingly, they invest a bigger portion of their income (18%) versus baby boomers (11%), according to Investopedia (Relander, 2016).

 

Who are the Millennials?

 

Millennials are generally described as those belonging in either of these sub-groups (Latif, 2016):

  • 18-24 years old  (many of whom still living with parents)
  •  25-34 years old (having higher purchasing power)

 

These sub-categories provide a clearer picture of Millennials as a group consisting not just of potential investors (for those currently with more spending power) but also future investors (those yet to earn stable income). As a group, both share similar philosophies when it comes to investing.

 

Socially conscious and technology-savvy investors


Major global events and technology plays a part in shaping a Millennials’ investing behaviour. Having witnessed at least 2 major crises in their life, they have become distrustful of big businesses whose greed for profits were blamed as the cause of the global financial crisis. Millennials are values and impact driven where they rank social responsibility and environmental consciousness more important than profits.

 

As a generation that grew up in a digital and media-saturated world, Millennials are far more informed than the previous generation due to the proliferation of Internet. A survey done by Legg Mason Global Investment highlighted that young investors are more inclined to obtain investment advice from online forums, blogs and alternative media outlets. This translates into their requirement for transparency on prices and products before making informed decision to purchase or invest.  

 

Short-term oriented

 

Millennials have short-term investment horizon, preferring less volatile and lower risk investments over long-term investments. They invest to meet short-term needs such as saving for a vacation or paying off student loan as opposed to savings for retirement. According to the Schroders Global Investors Survey 2016, Singaporean Millennials are more short-term oriented, holding stock investments for an average of 2.61 years in comparison to 3.47 years for their older counterparts.

 

Kapital Boost – an appealing choice for the Millennials 

 

Kapital Boost offers an appealing investment option for Millennials. As an online Islamic crowdfunding platform, we provide ethical and short-term investment opportunities. This is in line with the Millennials’ values and approach towards investing.

 

Given their mistrust towards big banks in general, their love for technology, and their need to invest and contribute to the community, crowdfunding has indeed become an attractive investment platform for the Millennials. The opportunities are vast, as crowdfunding is forecasted to account for more funding than all venture capital combined in 2016.

 

It is important that we understand and acknowledge the tech-loving, socially conscious and changing mindset of the Millennials. By providing them with smarter ways to invest, Millennials can be engaged and encouraged to become investors. This can lead to a better financial future for themselves, and also for their community. 

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