Digital Gold: Investment for the digitally savvy millennial

Millennials are increasingly turning to digital alternatives and prefer to do their investments themselves.

India has one of the largest millennial populations in the world, making up around 34 per cent of the total population and a major part of the workforce. Millennials are early adopters of disruptive technologies. They’re the first generation to be known as digital natives. They grew up with the internet and have not lived a life without technology. Millennials are used to technology being an integral part of almost everything they do such as shopping, communicating, listening to music, ordering food and more. This is also true when it comes to investments. Many personal finance and investment apps are available in the market today to cater to this younger group of investors.

Every child in India has grown up hearing that gold is not only a good investment but also is a symbol of prosperity and comes with family history and legacy attached. Gold can act as a hedge against inflation, have far less risk than Indian stocks, diversifies a portfolio and carries significant value within itself. Despite it being a favourite among investment choices, acquiring and owning physical gold can be a hassle.

Today’s millennial generation loves a hassle-free life – they are looking for convenience and a seamless user experience. Gold jewellery, bars and coins have requirements such as storage, safety and maintenance that need to be fulfilled. With this demographic characterisation and India’s affinity for gold, investment in digital gold is the perfect option for digitally-savvy millennials, who are looking for easy-to-understand and profitable investment options.

Hassle-free experience

Millennials are used to digital-first and easy approach due to their regular use of apps and online platforms that make information and knowledge transparent. They tend to avoid the time consuming ways of face-to-face interactions and prefer the efficient ways of digital. Digital natives will show higher trust in technology solutions such as the availability of digital gold at their fingertips.

Digital gold gives the investor a chance of owning physical gold with the benefits of new-age technology that eliminates the hassles of inspecting physical gold for purity and then having to figure out a secure storage option. Trusted fintech platforms offering digital gold guarantee the purity of the gold purchased and store it into secure vaults and even provide full insurance for the customer.

Lower barrier of entry

During the uncertainty brought about by the COVID-19 pandemic, gold became an even more attractive investment option due to its reputation of being stable and resilient, regardless of the state of the stock market. Millennials were found investing in the yellow metal more than ever before. The platforms offering digital gold had an upper hand over traditional suppliers as they lowered the barrier of entry by making fractional quantities of gold available to purchase digitally. This also saw demand from millennials who had never invested in gold before. Digital gold makes gold accessible as investors no longer have to save a lump sum to be able to buy gold. This works well with the millennials who are newly introduced in India’s workforce and want to be able to both invest their money for future returns and keep aside a chunk for personal expenses.’

Invest when the price is right

The older generations are inclined to buying physical gold on auspicious dates such as on Akshaya Tritiya or Dhanteras. But millennials are more sensitive to the prices of gold and would prefer to buy it when the prices decline. Such spontaneous investment is made easier with digital gold as an investor can make a purchase at the exact right moment and can also buy as much or as little they wish to.

Conclusion

As technology evolves, so will people’s preference of investment tools. Millennials are increasingly turning to digital alternatives and prefer to do their investments themselves. Hence, it is safe to conclude that the generations following millennials will slowly start to turn the traditional models redundant. Millennials understand gold as a profitable instrument with long-term gains. Providing them with technology that makes investing in gold digitally accessible and convenient to suit their preference of holding an asset digitally over physically is a smart move.

(By Ashraf Rizvi, Founder & CEO, Digital Swiss Gold & Gilded)