Investing in financial securities may be the only way to secure a rich and prosperous future but millennial’s just aren’t taking advantage of the investment opportunities available today.
Millennial’s are individuals born between 1980 and 1999. With an estimated total population of 105 million people, millennial’s account for more than half of Nigeria’s population.
A survey conducted by BusinessDay revealed that millennial’s are not actively participating in the financial and real estate market. Up to 63 percent of millennial’s don’t own stocks, 71 percent don’t invest in treasury bills or bonds and as much as 84 percent have no investment in real estate.
You will think they must be saving up their funds to run a business but as many as 64 percent of millennial’s say they don’t own a business.
When asked why they don’t invest, they asserted “lack of funds.”
55 percent of millennial’s blame their low participation in the investment market to unavailability of funds. 27 percent say they don’t have sufficient knowledge about the market, while a remarkable 3 percent say they have stayed away from investing because it’s too risky.
With half of Nigeria’s population not investing, it’s not rocket science to figure out why equity market transaction volumes have stagnated in recent years.
About 32 million millennial’s in Nigeria cumulatively earn an estimated N27.9 trillion annually, using the per capita income of N873,144 in Nigeria. That’s more than double the total equity market capitalization today and 3 times Nigeria’s 2018 budget.
While the national millennial income makes these young folks seem like a wealthy demography, the N27.9 trillion annual income breaks into only N72,762 per millennial every month. This paltry sum places them in the working class group, below the middle class group of the elder population.It becomes more comprehensible when millennial’s blame their poor participation on lack of funds. Investment firms must then create more financial products that give millennial’s access to a diversified portfolio in the financial and real estate market not only to help in securing the future of these millennial’s but also to get a big bite from the N27.9 trillion millennial purses.
It is also important for investment firms to work harder in creating awareness of the available investment products to ensure that lack of knowledge is no longer a hindrance to investing for millennial’s.
With inflation running hot, savings with single digit inflation cannot be enough to protect the purchasing power of millennial’s.
Since 2009, equities have returned 15.8 percent, bonds have returned 13.84 percent and Treasury bills have returned an average of 12.4 percent.
Creating low cost retail financial products is only way forward for both the financial industry to build their asset base and millennial’s to get more exposure into the dynamic and rewarding financial market.
See full report in BusinessDay on Friday
