How we invest our money has drastically changed in the last few years. The COVID-19 pandemic was one of the major drivers behind this change. As a result, many new investors – especially millennials – prefer investment apps.
Why this set of investors is drawn to mobile apps is an interesting question. And the reasons are plenty.
In the next section, we have uncovered major reasons why this group chooses apps, especially investment advisor apps. And discards traditional investment methods.
Without further ado, let's dive in.
Fixed Deposits are obsolete for many
Someone jokingly said FD's new full form is Favourite of Dads. For decades, this instrument has been the preferred instrument of working individuals. After all, it was a safe investment that gave handsome returns (up to 13%).
But, the millennials don't consider it a good option. The reasons are many. First, the average interest rate is lower than in the last three decades. The average rate was around 5-5.25% for the financial year 2021-22. [Source: Bajaj Finserv].
Fixed deposits are a relatively inflexible investment option, as the money is locked in for a specific period. This may not be attractive to millennials who value flexibility and the ability to access their money anytime.
The interest rates on fixed deposits do not keep up with inflation, which means that the purchasing power of the money invested in fixed deposits may decrease over time. That’s why modern investment advisors rarely suggest this path.
Who has the time (& money) for real estate
Traditionally, real estate has also remained a lucrative domain for investors. But modern-day investors think otherwise. They refrain from investing in commercial or residential properties for many reasons.
Buying a property typically requires a significant amount of money for a down payment, closing costs, and other fees. This can be a barrier for many young professionals who don't have much cash.
Owning a property means being responsible for maintaining it and making any necessary repairs. This can be costly and time-consuming, especially if you don't have the skills or expertise to handle these tasks yourself.
Real estate is not highly liquid, meaning it can be difficult to sell quickly if needed. This can make it challenging to access the money you have invested in a property if you need it for other purposes.
Putting your money into real estate means tying it up in one specific asset. Unfortunately, this can mean missing out on other investment opportunities that offer a higher return or more diversification.
Tracking of investments is a necessity
Today's internet users can track the exact location of their food delivery rider. They expect the same level of transparency in their investments. Online apps give them this power. At any point in time, they can track the current value of their portfolio, the returns generated, and the amount invested.
The users can also check the rate of returns over a certain period. So there's no need to maintain a detailed excel sheet with a record of each transaction – such as deposit, withdrawal and earning. The fintech apps do the same for them without charging anything extra. It’s like having your 24/7 investment advisor who doesn’t mind offering unlimited reports.
Nothing beats convenience
Want to begin your investment journey? You can do so in a few steps. Download the right app, fill in your details, connect your bank account, and Voila! You are good to go. Well, there may be extra step or two depending on the app you're using. And this is just the initial stage.
Further investment is way easier. In fact, you need to take a few minutes every week or a month to ensure everything is going seamlessly. This convenience attracts a plethora of young investors towards the new-age apps. In fact, a report mentioned 72% of the users considered it the main reason to choose fintech apps.
You can continue to invest any time of the day or night. Even location doesn't matter. A few clicks on your phone do it all for you. The investment advisor apps in India, specifically, offer invaluable insights and even invest on your behalf.
How Elever is helping the millennials
Elever is taking tech-based investing to the next level. This goal-based investment advisor app uses cutting-edge artificial intelligence tech to create portfolios for its investors. The portfolios consist of ETFs and stocks that match the users' lifestyle ambitions and financial goals. When designing the portfolio of its users, the app also considers their risk appetite.
This end-to-end approach of customised investment is what the company calls Systematic Lifestyle PlanningTM (SLP). Read how it is a revolutionary product from HERE. .
The best part is that this app saves you from the hassles of meticulously studying every stock. Plus, you need not reshuffle your portfolio every few months or weeks..especially if the market scenarios change. All the heavy lifting is done by the carefully designed algorithms of this app. No wonder it has become the favourite of a myriad of modern investors.
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