Has technology simplified investments?

There are always two ways to look at a thing. Investments or technology are no exceptions to this rule.

Back in time let’s say even in the 80s or 90s, life was simple. Highest form of technology in Indian homes would be a television or a telephone set. And those were meant for the entire family. Investments were simple too.

With companies being employee friendly most employees prefer to stick with them for most part of their lives. At retirement stage, employer were providing them a decent pension, good PF & gratuity amount. Also, companies were there to cover employees health insurance.

Fixed deposit, during that time was one of the most common and prefer mode of investing. This option was providing 13% to 15% return on an average. Another preferred options of investing were gold, silver, post office schemes and real estate. Options were not plenty hence investments mode were also predictable. The middle class never needed to move beyond their comfort zone and was happy with the returns they were receiving. But by remaining conservative their investments never multiplied.

However, all hell broke loose with influx of technology and recessions post the Lehmen Brother crisis in 2008. The financial meltdown caused millions of lay-off across the globe. People were forced to switch careers even after remaining loyal to companies for a decade or two. Companies meanwhile, started rethinking their policies. And the job market changed completely.

With the access to internet, smartphones and foreign degrees, the millennials who joined the workforce during this time embraced the change graciously. They started earning double or triple salaries as compared to their parents (lesser perks and benefits of course) and switched jobs and careers whenever opportunities came calling. Many changes happened in investment world too. People started started thinking beyond fixed deposits, real estate and gold. And today options are plenty and mode of investing is also easy.

Since last decade or so, the rate of interest from fixed assets like fixed deposits, recurring deposits and others gone down to 6% -7% on an average. This is even lower than the standard inflation rate. Moreover, the millennials have a bigger risk appetite than the previous generation and they are open to more risky bets. Being well aware of the market trends, they do not shy away from investing in mutual funds or stock market. Unlike the previous generation they do not blindly follow the agents and before buying any financial products they prefer to do their own research online. Technology made quite easier to access all the require information from home to make decision and start investments. Some are even ready to pay the right price for the right advice to make their money grow.

Many financial advisors comment that it is very difficult to suggest whether investment patterns today are more complicated. If you ask anyone in their 30s or 20s to go bank to simply withdraw money or transfer some amount they would be flabbergasted with idea. To them the entire process is not only time consuming but the concept of carrying much cash in hand is also inconvenient and risky. They would rather finish the same task within minutes at the ATM or online transfer. On the other hand, majority of people in their late 50s and 60s still find it difficult to converse in the language of technology. For them the concept of net banking and phone banking are still a little bizarre. Each generation acts according to their own convenience. It’s more of lifestyle change than an investment choice.

Some say, technology has simplified the process of investment but others speak against it. Hence, it completely depends on how you look at it – be it life or investment. To each his own.