How a changing world is driving young professionals towards personal wealth creation

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10 years ago investing wasn’t even in the vicinity of my priorities. Not to say there weren’t platforms and ways to do it, but it wasn’t particularly popular among my peers. Today it seems everyone has or is investing in something! Its popularity has skyrocketed and more and more people are making investing a regular part of their financial makeup. 

On the face of it, it seems obvious. The combination of technology, access to information and more time to focus on investing (born by the pandemic) is driving increased activity from retail investors. But what are the other forces behind this shift?

The world is changing. Arguably more in the last 3-4 years than the previous 20. Covid ushered in feelings of uncertainty and anxiety that haven’t been helped by an unstable macroeconomic environment. As a result, many people have taken steps to bolster and future proof their finances.

And who can blame them? The last few years have been pretty bleak. A global pandemic (remember not being allowed to go…well…anywhere?!), followed by a woeful and inadequate housing market, job insecurity, inflation and soaring interest rates doesn’t exactly scream, “Break out the champagne”.

But with all this uncertainty and hardship comes some good decision making. Certainly by some! More and more Millennial and GenZ professionals are starting to invest, or are increasing their investing activity. And it's a great thing! Investing plays a critical role in creating financial freedom and we can all benefit from putting more effort into any strategy that aims to better our future selves.

Technology is obviously a big player here. Gamefied, user-friendly trading apps and free time spawned by our new hybrid or WFH lives has brought a lot of attention to retail investing. Truthfully, I think these grounds for participation alone would seem a little superficial but there are other more serious factors at play.

I don’t know about you but I know quite a few people who lost their job over the last few years. Great people who worked hard and in many cases would be considered ‘high-achievers’. People who were committed and loyal to the companies they were let go from.

Most people depend on their salary alone as their only means of survival. It’s relied on for food, shelter, childcare, education and everything else in between. Finding out you’ve been unexpectedly let go via an email from your employer is a brutal way to be left feeling financially exposed. Couple this with a cost of living crisis and a crippled housing market (if you’re unlucky enough to be buying a house), and you’ve got a recipe for a pretty awful nightmare.

Young professionals are starting to wake up and realise that if nothing else, investing might just provide them with some security for the unexpected.

And interestingly, young people aren’t waiting until they have a career or to start a family to take part. In the US, 56% of 18-25 year olds invest and nearly a quarter of those made their first investment before they turned 18; with similar figures in the UK - 49% (source). The iPhone era and the generation it’s created are tech savvy and information hungry. It's no surprise they’re getting involved early and taking advantage of the opportunities available to them. And I’m here for it!

And while the retail investor pool is broadening, diversification is taking centre stage. There’s no doubt crypto is likely the gateway drug of choice for many new investors. Cutting your teeth on something so high risk makes public markets look a little “meh”. So it’s not unexpected to see such a big push for access to other investment opportunities too.

In the wake of 2022/2023 market volatility and macroeconomic challenges, retail investors have been evolving their strategies to incorporate other asset classes. The goal, of course, is to protect their current portfolios, but also position themselves for future growth. A lot of retail investors would’ve entered the market as single stock traders or via the crypto craze, as I mentioned. But the data shows they’re diversifying their portfolios to include new strategies, asset types and vehicles, with 31% of retail investors reporting a higher tolerance for risk in the second half of last year than at the start of 2023

And the private markets have heard their call. The landscape is fast evolving, with regulatory and technological advancements opening up private markets to retail investors more and more every day. Individuals now find themselves on a more level playing field with major investors like institutions and high net worths, and this tide of investment democratisation is catching major tailwinds. Private markets are no longer bound to be monopolised by the ultra-wealthy, giving retail investors access to greater opportunities to build personal wealth.

We’re at the beginning of significant change in the financial markets and the next few years are bound to be exciting.

What we’ve been working on at PitchedIt

It’s been an exceptionally busy period for us as we edge closer to launch. We’ve made great strides in product development as well as the authorisation process with the Central Bank of Ireland.

• We appeared on the MyWallSt podcast! Check it out.

• Had confirmation of authorisation date from CBI (stay tuned 🥳)

• Tested our onboarding flows with a small group of early adopters 🛠

• Updated homepage with improved styling and added interactivity 💁‍♀️

The Unsophisticated Investor is brought to you by Scott & Rob, the founders of PitchedIt. We were both sick of private markets being a playground exclusive to the ultra-wealthy. So… we started a company to challenge the status-quo. PitchedIt’s singular focus is to unlock private markets for Millennial and Gen Z retail investors and help them build wealth through the highest performing private market opportunities.

Scott & Rob
PitchedIt Co-Founders