Millennials now investing a fifth of their income in future wealth
1 Aug 2019
by Nikko AM NZ
Research by fund manager Nikko Asset Management has highlighted that when it comes to investment, New Zealanders are now starting young – with Millennials spending as much of their income on investments as their parents, and see investing as more ‘important’ than any other age group.
Nikko AM surveyed more than 1000 people aged 25+ with household incomes over $75,000 to support the launch of its GoalsGetter online investment advice platform.
Nikko AM NZ managing director George Carter says as well as asking Kiwis about the new technology, the firm gathered insights into their attitudes to investing and saving, to help find out what they want from a fund manager.
“Among the questions asked were how much of their regular income they devote to savings and investments; and how important it was to them personally to have savings and investments,” says Carter. “Of particular note was the strong showing of the 25-34 year-olds, whom our survey suggests are well aware of the need to start early to achieve goals. Results seemed to strongly counter the idea that young people weren’t saving and instead were frittering their money away on coffees and smashed avocado."
The survey asked respondents to estimate the proportion of income they spent on key expenses: mortgage/rent, day-to-day spending and bills, discretionary spending (e.g. entertainment), savings or investments, or others.
Average figures included 17% on savings or investment, 26% on mortgage or rent and 39% on daily spending and bills.
Chart 1 shows the breakdown by age, including the divergence of housing and other spending as they got older.
Notably, the survey found 25-34 year-olds were devoting as much to savings/investment as 55-64 year-olds (19%).
Other groups who exceeded the average for savings or investment included males (18%), especially those aged 45-54 (20%). Significantly lower results were recorded for 35-44 year-olds (14%), especially females of that age (12%).
The survey also asked respondents how important it was to them personally to have investments and savings: critical, very important, important, nice to have but not important or not Important at all?
Nationwide, 28% said critical, 51% very important and 18% important. Just 3% said ‘nice to have but not important’ and less than 1% said not important at all.
By age, 25-34-year-olds were more investment-focused than most of their seniors, with 31% saying investments were of critical importance. Only 65-99-year-olds were more likely to say critical (35%). By comparison, just 20% of those 35-44 said the same.
Mr Carter says people of all ages can benefit from using GoalsGetter, an easy-to-use digital investment platform that lets investors – including KiwiSavers – set up and track their investment goals, providing a single view of where their investments are now and how they may look in the future.
“We’re the first to launch a digital advice platform that provides real time recommendations and advice. GoalsGetter is designed to help give you confidence in making investment decisions.”
Nikko Asset Management New Zealand Limited (Company No. 606057, FSP22562) is the licensed Investment Manager of Nikko AM NZ Investment Scheme, Nikko AM NZ Wholesale Investment Scheme and the Nikko AM KiwiSaver Scheme. This material has been prepared without taking into account a potential investor’s objectives, financial situation or needs and is not intended to constitute personal financial advice, and must not be relied on as such. The Product Disclosure Statements are available on our website: https://www.nikkoam.co.nz./invest/retail.