Millennials may be seen as the generation who still watch Friends re-runs, spend too much money on avo toast and, wait for it, are apparently ‘lazy’.
Some of these stereotypes are there for a reason (how many people watched the Friends reunion?), but the lazy part is far from the truth.
When it comes to money and lifestyle, millennials are more actively engaged than ever. Reports consistently show millennials are diving into the sharemarket in greater numbers than ever, driving growth in everything from sustainable investing to tech stocks to ETFs (exchange-traded funds).
With easy access to information and online trading platforms, cheaper trading fees and the current low interest rates, millennials are hungry to take control of their finances in a way that wasn’t previously available to the generations before.
“Millennials are given a bit of a bad name. There’s this idea that we’re reckless with our money,” says John Winters, CEO of online trading platform Superhero. “What our data from Superhero shows is millennials are actually very responsible with their money. If you look at the trends on how they invest, they’re looking for long-term investments, like ETFs.”
Winters adds that millennials are “investing in what we’re invested in”, which could be tech brands we use every day like Apple or Samsung, or Aussie growth businesses like online marketplace Airtasker.
There’s also a growing appetite for trading US shares too. Recently, Superhero launched the capability for US stock trading with zero commission.
“The past few years have seen a real shift towards investing in both Australian and US shares, particularly from people aged in their mid-20s to mid-40s,” Winters says.
Let’s see how this looks in practice for a few different types of millennial investors.
Meet Peter, the new-age tech investor
Marketing tech software sales director, Peter lives on the Central Coast of NSW with his wife, a nursing student, and two kids (aged six and four). They have a dog called Darwin and a cat called Bagel.
“We’re a young family, we’re busy, we’re looking at renovating, we’re upgrading our family car,” he tells us. “We’re in a very expensive stage of our life.”
Peter, who has a side hustle as a wedding celebrant, says he’s mostly interested in high-growth tech stocks, given the industry he works in.
“I’ve become more about leaning into things that I’m knowledgeable and interested in rather than just doing what everyone else does,” he says. “I’m happy with my index but that provides me pretty good growth that’s netted somewhere like 30 per cent return over the past three or four years.
“In my Superhero investing, I put a bit of cash into speculation with a view of it being high growth, but at the same time I balance that with a bit of blue-chip stocks so I get that divided return, and I have ETFs too.”
Peter says he wouldn’t consider himself a “seasoned” investor. He leans on advice from his accountant and colleagues in the tech world, and uses Superhero’s live data and reports to help guide his investments.
“It helps me learn,” he says. “It’s very simple speak – it provides access to all the data that I need.”
The platform’s $5 trading fees also suit Peter’s increasingly “measured” approach to investing.
“I’m quite comfortable with risk, though being a single income family we’ve got a lot of competing priorities so I guess I’m a little bit more cautious,” he says. “I think there’s some measured risk in my investment.
“Same things on the renovations with our house – it’s very measured. Once my wife starts earning next year we’ll be in a better position to be more frivolous. We live a very comfortable life, we could be a bit more smarter with our money, certainly.”
Meet Andrew, the first-time investor
Brisbane-based media professional, Andrew* and his partner live in a city apartment they bought a few years ago, so they’re looking at ways to grow their wealth as they pay off the mortgage.
“My partner is a lot more experienced in the investment game than I am,” he tells us. “I’d always thought it looked too complicated or that you needed some kind of background in commerce to really understand how to invest.”
Something clicked over the past year, though. After reading about the low-risk, low-cost models of ETFs, Andrew dipped his toe into investing in ETFs with strong sustainability credentials, doing it all online.
“I live a pretty busy life so I don’t have time – or make the time – to do much research,” he says. “But during the recent lockdowns, I spent spare time getting across the benefits of ETFs and how they give you a basket of shares with solid returns, without you having to put too much money on the line. I’m naturally risk-averse, so this felt like the right start for me.
“Plus, I really liked how the indexes I chose had strict ESG (Environmental, Social and Corporate Governance) policies in place. It’s been really surprising to see some of the most ethical brands are tech brands like Apple, PayPal and Adobe. You don’t traditionally think of them as ‘green’ but there’s a lot more to it than that.”
More recently, Andrew has invested in shares in essential service providers that have performed strongly during the COVID-19 crisis.
“I’m a lot more engaged in my finances now than I was even a year ago,” he says. “You can probably thank my partner for giving me a nudge in the right direction!”
*Name and image changed for privacy
Meet Zeinab, the experienced investor
Industry: Financial services
Zeinab has worked in financial services across the UK, US and Australia over the last 10 or so years – so you could say she knows a thing or two about investing.
“I started investing when I was 16, but didn’t start investing seriously until 24,” the Sydneysider says.
With that experience under her belt, Zeinab is accustomed to the ebbs and flows of the market.
“I am happy to take on risk as long as I understand it,” she says. “The most important part of this is fully understanding the investment, downsides and upsides and understanding how likely it is that the risk will be realised.”
For Zeinab, this means having a balanced, diversified portfolio with a mix of both lower-risk ETFs and more market-dependent individual growth stocks.
“I want to ensure adequate balance of long-term growth, high and low risk/reward investments,” she explains. “I generally invest globally, and try and use ETFs and index funds where possible. I have a small portfolio of higher risk investments, like starts-ups and crypto. Through Superhero I have gained easy access to ETFs and I’m able to track these through an easy-to-use user interface.”
Her goal, like many of us, is to increase her net income. But she also hopes to reinvest larger sums into her portfolio.
“I want to ensure I can cover all my costs through my investments within the next five years, and then use my salary to keep investing,” she says.
If you’re looking to get started with investing or moving your portfolio all into one place, download Superhero. It’s free to join, and you can invest as little as $100 per trade.
Feature image: Peter / Zeinab / AdobeStock
This article is brought to you by Your Money & Your Life in partnership with Superhero.
The information above is intended to be general in nature and is not personal financial product advice. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. You should seek independent financial advice prior to making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold). Pinstripe Media and Superhero are not liable for any loss incurred by use of or reliance on the information.