What does Generation Y Investment mean?
Times change. In terms of financial investment, this means that a Generation Y investment no longer has much to do with the products of the grandparent or parent generation and new solutions are in demand.
But who is Generation Y anyway? And what can be said about this rather heterogeneous group?
Who's Generation Y?
A Generation Y investment refers to the so-called “millenials”, i.e. the generation born between the early 1980s and the late 1990s.
Generation Y thus follows Generation X and, according to market researchers and sociologists, is characterized by other characteristics.
It is interesting to note that the letter “Y” not only serves as a successor to the “X”, but also symbolizes the English word “Why?” for “Why? What is meant is that representatives of the generation question many things and are not so easy to convince. A Generation Y investment must therefore be convincing not only in terms of returns, but also in many other areas.
The desire for security and the search for meaning are repeatedly cited as attributes for Generation Y, and the financial crisis around the year 2008 is also a formative factor.
What are the characteristics of a Generation Y investment?
But how can the needs of a group of roughly the same age be translated into an investment or retirement provision?
Considering that, according to statistics, around 34 percent of people between the ages of 20 and 35 do not give any thought to investments or pension payments, this seems extremely tricky.
On the other hand, just one Germany 39 percent of the target group is quite willing to make a Generation Y investment and has recognized that the statutory retirement provision is no longer sufficient to make ends meet in later years.
Some rules of thumb apply to a Generation Y investment, which must be given to the generation on its way.
The be-all and end-all is to build up one’s own financial knowledge. This point may seem self-evident, but in earlier years it was indeed the case that the employees of the house bank were blindly trusted. Building knowledge also means knowing that the financial market is constantly changing and that expertise should always be up to date. It is not necessarily a matter of understanding every new product down to the last detail, but of grasping the major trends and developments.
It follows from this that a Generation Y investment requires a high degree of planning and should not be carried out spontaneously or even guided by feelings. Based on success, habits can be derived and money is invested regularly.
What is suitable for a Generation Y investment?
A number of new forms of investment are suitable for a Generation Y investment.
A prime example is crowd investing, which corresponds to the new generation in several respects. On the one hand, there is no need for a bank to mediate and no local advisors are needed. Crowd investing means that money flows directly via a platform to a company that borrows it at a fixed interest rate.
The form of finance is called a subordinated loan and promises yields in the double-digit percentage range. The advantages are manifold and consist among other things in the fact that one knows with this generation Y investment exactly where the money flows and what is made with it.
Transparency is at the forefront and both the business model and the concrete project for which the money is needed are explained exactly. A further advantage of crowd investing is the possibility to place even small sums in the range of a few hundred euros.
Finally, the projects are often exciting and serve positive purposes such as ship logistics or environmental protection. However, it should be pointed out that there are also risks, but these do not fail to materialize with virtually no Generation Y investment of equity funds, crypto currencies, ETFs and the purchase of tangible assets.