Despite the slack in the real estate market, home buying is still the leading aspiration among young Indians. According to the ‘Aspiration Index’ survey conducted by BankBazaar across 12 metro and non-metro cities in July 2018, working millennials between ages 25 and 35 today consider buying a house to be the most important milestone in life. However, affordability remains a challenge.
Sixty nine per cent of the millennials aspire to own a house while only 57% own a house or are financially ready to acquire one. The aspiration to own landed property has existed through the ages. However, what seems to be a departure from the previous generations is the aspiration to travel around the world, build wealth, and follow individual dreams.
Categorisation of aspirations
The aspirations of the men and women surveyed can be categorised under six broad heads: wealth, image, fame, relationship, personal growth, and health. While owning a house comes under ‘wealth’, buying gadgets is categorised as ‘image’ and arranging for a lavish wedding falls under ‘relationship’.
Eighty per cent of the respondents chose wealth to be their top goal, relationship and fame scored 66% each. Sixty five per cent chose health, followed by personal growth at 63%, and image at 60%.
Comparing the aspiration data between men and women, women scored 87.3 on the Aspiration Index compared to 86.29 for men. It can be attributed to growing career choices and increasing financial independence of women.
Aspiration-readiness gap
Despite wealth being the most important goal, the gap between aspiration and readiness is at 11% which is on the higher side. The gap is at 12% when it comes to health. The reason for this wide gap could be the high cost associated with both real estate and health care. On the other hand, the gap between aspiration and readiness is at 4% when it comes to fame and image. So the millennials today have more potential to globe-trot, buy their dream car, and acquire gadgets.
Where are millennials investing?
Millennials today are rather traditional in terms of their investment approach. About 72% of the respondents have purchased life insurance, while 56% invest in mutual funds. This is contrary to the ‘high on risk’ image associated with millennials in general.
However, considering fixed deposits (FDs) have always been the safe haven traditionally, the investment score is 57%, which is comparable to the investment numbers associated with mutual funds. This indicates a shift in investment pattern among millennials. PF/PPF investment is at 36%. Pension policies are at 19%—understandable due to the young age of those surveyed. Health insurance is invested in by 57% of the respondents. This throws light on the kind of portfolio millennials have today.
Interestingly 91% of the respondents prefer to take care of their finances individually without any assistance from financial advisors. Four per cent rely on their family and 5% leave it on the financial advisor to take financial decisions on their behalf.
Willingness to take credit
About 61% of the respondents are willing to opt for credit instruments to fulfil their aspirations. While 88% own credit cards, 76% have taken a loan. However, this doesn’t necessarily indicate that people prefer credit cards over other lines of credit, as credit cards are used by many because of the benefits associated with them. Credit cards are preferred as a mode of payment.
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The writer is CEO, BankBazaar.
