Our generation is made up of big spenders – not in estate – but kids who spend money on savvier items than any other generation.
Yes, that means smartphones, MacBooks, sushi takeout and $10 dollar drinks at average nightclubs. (On top of $10 entrance fees.) Our generation isn’t putting away their money for things like a mortgages anymore. Over half of the U.S. investors plan to invest in exchange traded funds, known as an ETF, in 2017 according to Business Insider. Millennials seem to be leading the way and investing in these ETFs. More so than the infamous Generation X, and the generation before.
A BlackRock ETF Pulse Survey revealed that 70% of millennial investors plan to invest in ETFs in the next 12 months. These millennials, according to BlackRock a trillion-dollar investment manager, seem more engaged than ever in managing their finances.
Why?
Millennials seem to like be accessible to only the best of good. For example, private car services like Uber. Head of BlackRock’s US IShares Martin Small Told Business insider that, “They can access the market in the same way that the most professional, largest, technologically enabled investor can.” Therefore, it gives them a perception of power. They see the brand or name sitting in a ETF – and how it seems low cost and tax efficient in a big market – and it gives the same high quality persona and satisfaction.
Where This Becomes Really Messy:
The problem with the easy access and entitlement for ETF’s and millennials is that there is a huge lack of education. Young adults seem to not know how to spend their money these days, hence why we waste it on impulse purchases rather investing it. We buy expensive toys, meals and trips because we see no other point in investing our money. Then when we think to invest it, we think of the huge stock market crash of 08, and how we saw the market collapse because no one built in depth, invested portfolios. So we invest in big tech IPOs, where capitalism already stripped the real value. Or some sort of kick-starting entrepreneur advertisement campaign where you get a starter pack, and no investment in the actual company.
When we think of the stock market, we are not wrong to imagine money hungry Wall Street wolves in suits, wiping out all that’s good in the planet and not caring. That’s not far off, but that’s not the practical principals of trade.
An IPO is an Initial Public Offering. This is what a company does when it wants to list itself on a public stock exchange. You offer a big cheque to the seemingly promising company management, and it tells you the pros and cons of the deal, and you wait and see if you get a piece. We look around at all our things so heavily labeled like Apple or Tesla, because their new and innovative and we think to ourselves, how could this go wrong?
Sometimes the stock does jump up, but usually someone else is getting more value than you. Private stock going public are the ones who are making the vast amounts of money, not the public stock going more public. Usually IPOs aren’t done for companies to expand worldwide – in most cases. Usually the stock market targets young brand-loving suckers to take their future problems off their hands.
Investing in small business in this economy could truly benefit young investors more that an IPO – unless it suddenly tumbles. This year especially, in places like Canada, over 30 companies are legally allowed to grow Marijuana. 75% of all global mining comes from companies based in Toronto and Vancouver. That is some of the worlds’ largest oil and new green energy companies in the world starting in small enterprises on the Canadian stock exchange. The real power in investment is at the beginning of a company’s journey. Not the end.
