#OutlookMoney | Millennials are in to Investing Big Time
Tune into the Master Talk series by London Stock Exchange Group in association with Outlook Money to learn the ropes from industry experts.
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00:00 (upbeat music)
00:02 - Good morning viewers.
00:09 Hello and very warm welcome to the Masterstock series
00:12 presented by Refinitiv and Elsec Business,
00:16 one of the world's largest providers
00:17 of financial markets data and infrastructure
00:20 in association with the finance magazine Outlook Money.
00:24 Hope you're doing well.
00:25 My name is Shodho, your host today.
00:27 I'm sales specialist at Refinitiv-Elsec.
00:30 And today we have with us Aditya,
00:32 co-founder and CTO of MoneyApp.
00:34 Aditya is an alumnus of IIT Kharagpur.
00:37 He's a seasoned business builder
00:39 with a track record of adding value
00:41 across a range of industries,
00:43 including internet technology,
00:44 pharmaceuticals and financial services.
00:47 Now, nowadays, investing your money wisely
00:50 is an essential part of financial planning
00:52 to achieve your goals.
00:54 Today, we'll be exploring money management
00:57 and investment by millennials and Gen Z.
01:01 Millennials and Gen Z have higher risk taking appetite
01:06 and are conscious of the importance
01:07 of having an investment strategy
01:09 to achieve their life goals.
01:11 We will try to understand today
01:12 more about the investment strategy for millennials
01:15 with our guest and expert Aditya.
01:18 Good morning Aditya and welcome.
01:20 - Hey Shodho.
01:21 - I hope you're doing well.
01:22 - Thanks a lot for having me.
01:24 - Our pleasure.
01:25 So could you share your experience with our viewers
01:28 how millennials look at money
01:30 and what has been your experience so far?
01:32 - So Shodho, first of all,
01:35 thanks everyone and the Outlook Money Team.
01:39 A lot of things has changed
01:41 regarding how a millennial typically look at money.
01:44 And we need to understand few of the patterns
01:47 that goes into because the way they spend
01:50 has truly changed.
01:51 If you look back 20 years ago,
01:54 let's take the decade of 90s,
01:56 how the people in that age group,
01:59 the millennials at that point used to spend.
02:02 They were typically spending using cash,
02:04 how they were saving was very different.
02:06 But at this moment, how do they typically spend
02:09 is completely online through apps.
02:12 And their introduction of any kind of product
02:14 is also through apps.
02:16 So that has changed the paradigm.
02:18 But still I'll say that we are very early
02:21 when it comes to the adaptation
02:24 of investing at this point.
02:27 Only you can say less than 10% of the people
02:30 are actually actively investing at this point.
02:32 We'll more go into it,
02:35 but I guess we need to understand the pattern first
02:37 and that will give us great insights.
02:40 - Okay, and you said about millennials
02:42 and investment strategy,
02:43 but they do have a lot of aspirations
02:46 of becoming very big in life
02:49 in the sense of millennial,
02:50 they want to become a millennial,
02:52 a millennial or a billionaire in very short span of time.
02:56 Now, you said that not many of them are into investing,
02:59 but they want to achieve this goal.
03:01 So how practical is that?
03:02 And what would be your guidance
03:04 and how should they plan for it?
03:05 - I think anything in life,
03:10 there is no shortcut to anything.
03:11 You can't build something huge with a short term goal.
03:15 There has to be a longterm goal
03:17 and investing is a game of patience, I will say.
03:21 It's a marathon which you have to run.
03:24 And typically it's not about that.
03:27 If I become a millionaire in the next two years,
03:31 the goal is something I should have sustainable money
03:35 after 20 years in my life.
03:37 So that is something doable also with your current income.
03:41 That is also doable if you invest
03:44 in the right kind of assets.
03:46 And you keep up those assets for the next 15 to 20 years.
03:51 Even a few of them, I mean,
03:54 I was having a discussion with the founder of Grow.
03:59 He mentioned that few of the mutual fund managers
04:03 suggest that you should have a mindset of 40 years.
04:05 Like once you have put in the money, it's like gone.
04:10 I mean, you might use it
04:12 or even your next generation will use it.
04:13 So that's the ethos of investment that we should deal with.
04:18 And I can definitely say that there is no shortcut.
04:23 There shouldn't be any shortcut goal here
04:25 that you will become a millionaire
04:27 in the next three to five years.
04:28 That's a full serenade typically.
04:30 And we'll not be able to achieve it via investing.
04:34 - And that's interesting because I am given to understand
04:38 that you work with creators who are generally
04:41 at a young age and they're looking for a lot of funding.
04:44 So what pattern have you seen?
04:46 Are they conscious enough to manage their finances
04:50 at such an early age?
04:51 Or do you see that discipline
04:53 or how do you see them growing after getting that funding?
04:56 - It's a very interesting point of view
04:59 when you typically work with creators
05:03 because they are really good at what they do.
05:05 That is creating the content, right?
05:08 And that is their core.
05:10 And why there was a need of an app like MoneyApp
05:15 because all of them were really, really bad
05:18 at managing the finances.
05:21 So investment comes after the payment is received, right?
05:24 But the creator ecosystem was so bad
05:28 regarding even collection of the money.
05:31 That their payments are being delayed by 90 days, 180 days.
05:37 So the management of the regular business finances
05:39 were so bad that investment comes typically quite later.
05:43 And you will find very bad practices across investment.
05:48 Why?
05:49 Why?
05:50 Because their core is they spend whole of their time
05:54 creating the content.
05:55 And if you don't give enough time to the content,
05:58 it will come out really bad
06:00 and your audience will be able to see that
06:02 you have not given it enough kind of thought.
06:05 So managing the content after managing the finances
06:09 and then the investment patterns comes in.
06:12 So at this point, we are solving the first major part of it.
06:16 That when you raise an invoice,
06:17 there should be enough proper things in place
06:19 that you get the money on time.
06:22 If you get the money on time,
06:23 then you will be able to put it into several assets.
06:27 Now, as a business point of view,
06:30 first they have to build the business assets, right?
06:32 They need to upgrade their camera.
06:34 They need to invest in their studios.
06:35 They need to invest in the team
06:37 so that their income is gradually increased
06:41 and they get more and more collaboration brands
06:45 typically to work with.
06:47 And they get better response from the audience.
06:50 So that's the criteria right now,
06:53 what they're dealing with.
06:55 From point of view of investment,
06:57 I have seen them taking the path,
07:00 quite traditional path,
07:03 because that kind of, you can say,
07:06 mindset comes from the people around them, right?
07:11 I mean, we started our career as creators also.
07:17 We used to create content on YouTube,
07:20 helping other YouTubers, right?
07:22 So there we actually did a deep dive and understood,
07:26 okay, if someone investing, let's say in real estate,
07:29 that's because first they understand,
07:31 okay, it will help my business also,
07:33 and it has been proven.
07:34 And most interestingly,
07:36 a lot of creators are from tier two and tier three
07:40 towns in India.
07:42 They are not from metros.
07:44 So the investment patterns are really,
07:47 really different over there.
07:49 And you will not find a lot of creators doing a save,
07:54 a regular save and having a great portfolio.
07:56 They will not be thinking from the stock's point of view
07:59 until unless they are financial influencers themselves.
08:03 - Discussion on the tier two, tier three cities,
08:07 and investing is different.
08:10 I guess the spending pattern will also be different.
08:13 These are, as you said,
08:14 they're content makers and you're trying to help them
08:16 in the finances.
08:17 Do you see a change in the spending behavior or pattern
08:20 once they do receive the money,
08:22 or how do you see them managing the hard cash,
08:26 the liquid cash that is coming into them?
08:28 - So first of all,
08:29 the most interesting thing was
08:32 they don't earn in cash, right?
08:35 All their payments actually.
08:37 So typically their first payment
08:39 were from Singapore.
08:41 - Okay.
08:42 - And if you're sitting in a rural setting,
08:45 if you're in a tier three, tier four town,
08:48 so that's a different kind of understanding
08:50 with the banker also,
08:51 because it's how the money hits your bank, right?
08:54 It first hits the Mumbai branch,
08:57 then the local branch,
08:58 they will talk to each other
09:00 and they will confirm with you.
09:01 And very interestingly,
09:02 there is a code which the creator has to provide that,
09:05 why am I receiving money from outside India?
09:08 And that is something that is,
09:11 a lot of people are not able to figure out.
09:14 The code is typically P07 or P0107.
09:19 It's like, I'm doing some work for this company
09:21 and that company is Google, right?
09:24 So the bankers,
09:26 if there's a creator in that area,
09:28 then the banker understand,
09:29 the local banker understand,
09:30 oh, you are also doing YouTube,
09:32 then, okay, this is the code.
09:33 And then they receive the money.
09:35 And the earning pattern is something like this.
09:38 There is a gap of around 45 days on average.
09:42 Let's say whatever they earn in January,
09:44 they will receive from somewhere between 23rd to 28th of Feb.
09:48 And that depends on the kind of bank you have.
09:52 If you have, let's say in HSBC,
09:55 it would be comparatively easier.
09:58 If you have some other,
10:01 it will take one or two more days.
10:02 And depending upon what is your cycle,
10:04 if you have been getting those payments for last two years,
10:06 it will be easy.
10:07 Otherwise, if you're in your first year,
10:09 it will delay a lot.
10:10 So whatever you've earned on 1st of Jan,
10:13 you will get the money in the account on 28th
10:16 from 1st to 31st.
10:18 So there's a clarity,
10:22 like what I'm gonna get,
10:23 but there's also a delay of the payment.
10:26 So they have to manage accordingly.
10:27 Due to that, you can say there is a false confidence also
10:34 that the money is coming out on the 1st of Feb.
10:38 They're thinking, okay, the next money is also coming out.
10:40 So whatever they are earning into the Feb,
10:43 which we have seen gets a bit,
10:46 you can say settled down.
10:48 They're not very running towards it
10:51 because they know, okay,
10:52 on the 20th, a lot of money is going to come.
10:54 Compared to other businesses,
10:56 they understand that on 1st of Feb,
10:58 okay, all the money that was supposed to come
11:00 has already in my account.
11:01 Now I have to earn new in this Feb, right?
11:05 So that is the earning pattern.
11:07 And to improve themselves is something that is required
11:12 because let's say they have done a collab video with someone
11:15 and they got paid, let's say 50,000 rupees or 60,000 rupees.
11:18 Next, when the new brand comes in,
11:20 they will ask for a better video quality.
11:23 They will ask for better audio,
11:24 better editing and everything.
11:26 Now they have to spend on that.
11:28 Otherwise they will lose the business.
11:29 Secondly, now they have to behave properly
11:32 like a legal business.
11:35 They have to send proper paperwork.
11:37 A lot of brands are interested in doing NDAs
11:40 because they want to understand that
11:42 whatever kind of video they are doing,
11:43 they're not doing for anyone else
11:45 for the time being at least for two months,
11:47 then they are not doing it for the competitor.
11:49 So that's where the interaction actually goes
11:54 from realm of you being a single creator
11:57 and imagine a guy who is in his college
12:01 started getting these kinds of offers
12:03 and he has to behave like corporate based in Delhi or Bangalore
12:07 then he has to send, he or she has to send an invoice
12:10 and get the paperwork done, then the payment hits.
12:13 And this is where they start to understand
12:17 that I need to have something stored away, right?
12:21 Because these kinds of opportunity knocks very randomly.
12:24 I need to have something in my mutual funds.
12:26 I need to have something that I will only touch that money
12:30 when a big opportunity comes in.
12:32 For example, there's an opportunity
12:33 that you can attend a talk show
12:36 or you can attend a conference or you can join a concert.
12:40 But you have to come here, you have to deal with people.
12:43 Now this creator understand that, okay,
12:44 it's a spend of one lakh rupees,
12:46 but I'll get so much content out of it.
12:48 So much content out of it
12:50 that my channel will actually get a lot of views.
12:54 Now they have to spend that kind of money
12:56 but they are not planned for it.
12:58 So if they have some kind of investment patents
13:00 already with them, then they can actually, let's say,
13:04 get that kind of money, which they have been,
13:06 let's say, investing for the last six months
13:08 or for one year, that will really help them.
13:12 - That's very unique.
13:13 So what I'm hearing from you is indeed,
13:14 given the nature of the business,
13:16 though they are young creators,
13:17 they learn discipline and the rigor
13:20 of the business very quickly.
13:22 You're obviously, working with you helps them.
13:25 But when it comes to, and obviously,
13:27 they will have some expense,
13:29 which makes them grow their own content.
13:31 Like you said, camera equipment, audio equipment,
13:34 but who do they generally take financial guidance from?
13:37 Because they have like an environmental society
13:40 of co-creators, or do they come to more professionals
13:45 or they more or less go on gut feel?
13:47 How do they do that?
13:49 - Majority of creators will first go with family,
13:52 then they go with someone who is managing
13:55 all of their finances.
13:56 When we talk about the investment patents,
14:00 they understand because a lot of them
14:04 do initiate their journey via some collaboration.
14:07 I'll tell you a very interesting fact,
14:08 which happened where we worked with Groww app.
14:12 And we worked with more than 5000 creators,
14:16 where they created, so Groww launched their stock options
14:21 at that point.
14:22 Like around four years ago, Groww was only a mutual fund app.
14:27 Then they launched that you can also invest via stocks.
14:30 So there we worked with 5000 creators.
14:34 And that was a journey when the creator invested
14:36 for the first time in any stock.
14:38 All of them did the research and came back
14:41 with very interesting stocks, like ITC,
14:45 which they feel was very stable, SDFC bank.
14:48 They were really clear in what they wanted to do,
14:51 because a lot of information was available on YouTube.
14:54 They did spend around a week searching
14:55 for the right kind of, you can say, stock that one time.
15:00 And all of them created a video of how the experience was
15:06 on that app, and they purchased their first stock.
15:09 And interestingly enough, all of them are still user
15:13 of the app investing over there.
15:15 So I guess it was the right kind of initiation
15:18 when it came to creators that they did the deep dive,
15:22 because then they understood,
15:24 even if I have to invest 200 rupees,
15:28 I'm not let it go waste.
15:31 I'll actually do the proper research.
15:33 And that cohort of users,
15:36 something like have more than 90% of retention.
15:39 - That's an amazing statement, because it even,
15:42 so we, I mean, what you're saying that they need,
15:45 what I hear is that they need information
15:48 and data, some decisions of investing.
15:51 Now, when I say it like that, it sounds very corporatey,
15:54 and it might be a very alien language
15:56 for some of these young creators.
15:58 But LCEC's business is that,
16:00 when we help people to take investment decision
16:03 by providing them information.
16:05 What in your opinion will work for companies like LCEC
16:09 or their peers or our own clients,
16:11 like mutual funds or people like MoneyApp,
16:14 to make ourselves more known to this group
16:17 and to get entrance in their club.
16:18 And it is a club.
16:19 And we are so-called uncool,
16:22 because we are these corporate people with ties.
16:25 So how do we make them aware that we do what we want?
16:31 - I don't think that the creative ecosystem
16:35 consider corporates as uncool.
16:38 I guess they are quite aspirational also,
16:43 that we will also build that kind of business.
16:45 And so first of all, it's like,
16:48 it's like be, I guess there are two ways.
16:51 First of all, be part of their ecosystem.
16:54 If you guys can launch your own YouTube channel
16:57 and start speaking the same language,
17:00 how the investment typically works,
17:02 because that's the way you can say
17:04 a lot of mutual investment apps has reached out to
17:08 a lot of millennials also.
17:11 I guess second way is be relatable.
17:13 Rather than us talking to the creator ecosystem,
17:18 we can have the existing creators talk to the ecosystem.
17:24 And they explain in their language
17:28 that this is how they are experiencing
17:31 the investment over there.
17:33 And this is which it can help them grow their money.
17:36 Like they will understand from a creator's video
17:41 that your money can grow in itself.
17:43 Your money can earn more money.
17:46 And this is what something I have done myself.
17:48 Then a lot of creators will look back and see that, okay.
17:52 Because they'll understand that the way I'm earning
17:56 is the same way this guy's earning.
17:58 So where he or she is putting their money.
18:00 Because there are a lot of channels
18:02 which actually just help creators, only help creators.
18:06 And they help creators in taking the right kind of decision
18:09 related to content.
18:11 It also helps creators to take the right kind of decision
18:13 what to buy.
18:14 Like a money app has its own channel
18:17 where we help creators regarding the content.
18:19 And what kind of equipments do you need to use?
18:22 Do you need a proper tripod?
18:25 What is the first thing that you should buy
18:26 after 10,000 subscribers?
18:28 I guess there will also emerge investment channels
18:33 only for creators at this point.
18:37 Because why do I say this?
18:39 Because only YouTube distributes somewhere around
18:43 $900 million every year to creators.
18:47 And that money should go into investments somewhere.
18:51 Even if they work on 20, 30% margin
18:54 after whatever they're spent.
18:55 So there is $200 million just from YouTube
18:59 that should go into investment.
19:00 And the best way is to reach out via YouTube, Instagram
19:05 and to invite more and more creators to understand
19:09 how they are managing their own money.
19:12 I guess that is something they will really look up
19:15 and listen to.
19:16 And that is the, you can say,
19:20 first introduction of the word of the investment
19:22 and how they can make money just from the money
19:25 that has been sitting in their bank accounts.
19:28 - And do you see, I mean,
19:30 they're very easily convinced in the sense that if I,
19:34 for example, if suppose I have an idea of money investment
19:37 and I go and talk to them about mutual funds and stock
19:40 versus I go and talk to them,
19:42 no, crypto is doing amazing.
19:43 You should put your crypto in there.
19:46 But obviously the risks are very different.
19:48 So do they have that understanding with them
19:51 or that is something that depend on good advice
19:53 from the right people?
19:55 - I think 99% of the creators will do their own research.
20:01 They will do a very deep dive on the matter
20:04 until unless they are fully convinced
20:08 that whatever the suggestion is coming
20:11 and they will be able to see through that, okay,
20:14 there is no way that I can make quick bucks out of it.
20:21 Because they have given their whole life
20:25 to just creating a YouTube channel.
20:28 And that is something we have not seen
20:31 any platform doing that.
20:33 Even if someone is selling on Amazon,
20:35 they're selling offline also.
20:37 And those people were actually selling offline earlier,
20:40 then they came online on Amazon,
20:42 even if they are 100% over there.
20:45 But these guys were not creating content offline.
20:47 They were not doing any drama.
20:49 They were not doing any kind of shows earlier,
20:51 but they are doing everything on YouTube, right?
20:53 So because they are so much invested in any kind of advice,
20:57 even if a small advice,
20:58 like you should do your thumbnails,
21:01 YouTube thumbnails like this,
21:02 or you should also start a channel on a new app,
21:06 or maybe is that a good strategy to have a Twitter account
21:09 along with a YouTube account?
21:10 They will do their own research very deeply.
21:12 And when they are convinced,
21:14 then if they are convinced,
21:16 I'm sure which they will be
21:17 because investment is something
21:19 that is not an option actually,
21:21 because your money due to inflation
21:24 will ultimately will be valued down to a zero
21:28 if you don't let your money grow on itself.
21:31 If you don't invest it,
21:32 then I guess it will be something
21:36 they will be able to adopt quite easily.
21:39 - That's very pleasant to hear.
21:43 And actually that's pretty eye opening to hear.
21:45 But while we have you here,
21:47 I want to learn from you
21:50 and I would want our audience to learn from you.
21:53 So what is your advice to these new age investors?
21:56 So what would be your advice?
21:59 - For me, it would be something like start investing, right?
22:04 But don't put everything until you are convinced
22:08 because you will not get a lot of time.
22:10 You will not become a part-time broker
22:14 or you will not become a full-time investor over there.
22:17 It has to be a passive investment for you, right?
22:21 And I'll go by the way
22:23 which I have taken these steps myself.
22:27 What I typically do is if I'm not able to understand
22:30 what I do is I put a very small amount
22:33 in let's say any of the stock
22:35 or any of the mutual fund that there is.
22:38 Maybe don't even start with a SIP in your first investment.
22:42 Just go there and invest 500 rupees
22:44 and thousand rupees to start with
22:46 and understand how it goes.
22:48 And when you sit there and see that in one month
22:51 this is the change, then you understand
22:52 because now you have invested something.
22:55 You are bound to understand it more.
22:56 Now I have a SIP coming on the ninth of the next month.
23:00 Should I let it invest
23:01 or should I look for other patterns?
23:04 Because there might be a lot of noise all around, right?
23:08 In that case, the best case scenario is
23:11 that you should have a friend who guides you really well.
23:15 And none other than who has been investing themselves
23:19 for the last 15, 20 years.
23:21 That is the best person to manage your money.
23:25 And it has been a proven case, right?
23:28 When you let someone,
23:29 because that's the case with you also, right?
23:31 You create a content and you put it on YouTube.
23:34 As a creative, you put it on YouTube
23:36 and you let YouTube decide
23:38 that will this be liked by audience?
23:40 And the YouTube algo will work, right?
23:43 So I guess the best case scenario is to start investing
23:46 and work with lots of people who have been investing
23:50 and understand their guidance
23:53 because you will not be able to become
23:55 a full-time investor in this case.
23:57 - Understood.
23:59 So what I'm hearing is that you have to speak
24:05 as a mentor to them for them to trust you
24:09 but anyways, they will still research your advice.
24:12 So that's very good to hear.
24:13 What would be your concluding thoughts on the topic?
24:16 Because I'm very conscious of your time.
24:17 I know you're busy.
24:18 So what would be your concluding thoughts
24:20 on our topic of discussion today?
24:23 - I think I would say that investment
24:26 for creators is really, really important.
24:29 And I'm really thankful that you guys are putting an effort
24:33 to make these creators conscious
24:35 about the right kind of decision that they're taking
24:37 because we are working in the similar direction
24:39 of making them their finances readiness
24:44 and whenever they are ready, they are ready to invest also.
24:47 So I'll say that it's a long journey together
24:50 and we've got lots of creators during this journey.
24:59 So, and at this point,
25:03 there are more than 2.5 million creators.
25:06 - Understood.
25:08 So that's a nice way to end
25:11 and that gives us the potential market for the future.
25:16 And obviously it's very nice to know
25:18 that it's an amazing what these creators are doing
25:21 and how conscious they are and how hardworking they are.
25:25 So we appreciate you being here today, Aditya
25:26 and for sharing your ideas and thoughts.
25:29 We will close our session now.
25:31 Viewers, we hope you have enjoyed our conversation today.
25:34 If you need to have any questions or comments or suggestions
25:37 do reach out to us at refinitiv.com.
25:40 And I would like to thank Aditya once again for his time
25:44 and his more importantly,
25:46 his valuable experience sharing today.
25:48 Thank you all.
25:49 - Thank you.
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