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Millennial Money: What does investing mean to you?

·4-min read
Group of young happy Asian creative business people or hipster student using electronic devices tablet and laptop connection together in modern office. Creative lifestyle young people concept
(PHOTO: Getty Creative)

SINGAPORE — “Let your money work for you”. Whether you agree with this statement or not, there’s no denying that investing has always been a stressful topic, but yet also increasingly becoming a trend for young people in recent years.

This is the start of a series where Yahoo Finance Singapore will share about the whys and hows of investing. In this first part, we speak to several undergraduates and young working adults to find out why they have or have not been investing, as well as their thoughts about investments in general.

Investing in the midst of a pandemic

Given the shaky global economy because of the current COVID-19 pandemic, one might think that it is a risky move to start investing especially when you’re young and green to the field.

According to OCBC’s Financial Wellness Index this year, COVID-19 has indeed dragged down Singaporeans’ financial well-being. The study also emphasised the importance of savings and medical coverage.

As such, more Singaporeans are taking leaps of faith to invest in hundreds of dollars. There is an increasing trend for young people to start investing because they desire to grow their wealth fast, despite the gloomy economic outlook.

Importance of planning ahead

The OCBC report found millennials —those aged 21 to 39 — seemed the most worried about their finances, with 49 per cent of those surveyed preoccupied with financial matters.

“I think that investing is important because it gives me a sense of long-term financial security as compared to slogging out in a job for years without much financial return”, said 20-year old Betty Chew, an Arts undergraduate from the National University of Singapore (NUS).

Chew, who started investing under OCBC’s Blue Chip Investment Plan (BCIP) earlier this August, has invested S$300 so far over a period of 3 months. Every month, investors under the BCIP scheme can buy shares in bulks of $100 depending on how much they feel like buying.

“What I like about it is that it is a low risk investment by dollar cost averaging”, explained Chew, who added that it was her friend who got her to think more about her finances and start investing.

Chew’s friend, 20-year-old Colette Low, is a private university undergraduate. Low, who works part-time at a food and beverage outlet and earns around S$1000 a month, decided to start investing after thinking about how to grow the money she has earned.

When asked why she decided to start investing this year given the unstable economy, Low confidently proclaimed that, “Singapore will never let DBS or OCBC flop, so I have strong confidence in seeing returns soon”.

Similarly, fresh university graduate Gideon Lai, 26, also feels that investment is something that more young people should be taking up. Lai has been investing under the POSB Invest Saver Regular Savings Plan for the last 2 years after reading up about it online.

Under this scheme, investors buy bonds every month based on an allocated amount they have decided on. For Lai, he also maximised his bank account through DBS Multiplier.

“Investment is also a form of planning for your own future and it is important to plan ahead”, said Lai, who started investing after thinking of how to gain further cash on top of his part time job as a tuition teacher.

“It’s really about working hard to generate more income to invest, where your returns just grow and grow overtime”, explained Lai, who also cautioned that it is normal to have very little cash in the beginning.

Staying on the ‘safe’ side

However, not many other youths see the importance of investment. According to a study by GYC Financial Advisory of 1000 millennials aged 18 to 30, two-thirds of them have not started investing, with 61 per cent adding that they don’t know how to do so.

Meanwhile, OCBC’s Financial Wellness Index finds that 42 per cent of young people don’t know the best way to start investing, with many turning to online sources or choosing to rely on friends and relatives for information.

Fresh graduate Stephanie Leong, 24, is one of those who haven’t seriously considered investing.

“I have zero financial knowledge so I don’t think it’s wise for me to dabble in such things”, said Leong, who also shared that she probably doesn’t have enough money to invest since she has yet to start a full-time job after graduation.

Besides the lack of capital, some attribute the indifference or even fear of investing to their perceptions of how financial advisors are stereotyped in the media.

“My impression of investments is that it is for businessmen only”, said Samuel Tan, 28, who has been working as a data analyst for the last three years. “It also feels like financial advisors aren’t keen on working with young people.”

Tan also let on that he has watched far too many shows where people lose their entire livelihoods because they choose to invest and the stock market fails them.

“The media has definitely negatively shaped the way we perceive investing and I rather stay on the safe side by just putting my hard-earned money in the bank, instead of risking losing it all.”

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Finances of more Singaporeans hit by COVID-19: OCBC survey

CPF Investment Scheme (CPFIS): Guide To Investing With Your CPF

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