There exists a stereotype about the Chinese people's view on money: They are savers. It might be true during the past decades, but not for the millennials and the following generation.

While most millennials and Generation Z, especially those born after 1990 and 1995, were complained by their parents to be spenders at a time, they've grown up to be good "investors" as well.

What do the young people say?

25-year-old girl surnamed Chen started to work in a state-owned television station in 2018 after graduation. She used to be a big spender, before devoting herself to financial management at the beginning of 2019.

Born in 1995, she found no difficulty at all in picking up basic rules about investing, only by swiping her smart phone, learning from social media and online lessons. Majoring in communication, she is now a good investor of her own money.

"Besides daily spending, I invested most of my idle money," said Chen. "About 80 percent are used to buy index funds through Alipay's automatic investment plan, and about 10 percent on convertible bonds," she said, adding that she barely uses bank accounts.

Chen is an ambitious investor for her age. She said she hopes her goal in investment could see a profit of 15 to 20 percent annual interests.

"I've once read an article saying that Warren Edward Buffett has a similar expectation, and I think I'll be satisfied with that too," Chen smiled. She said even though she'll spend part of her investment earnings, it makes her happy.

26-year-old girl named Li works as an analyst at the China International Capital Corporation. Majoring in finance, she started to invest even before graduation, with the gift money given by her relatives during the Spring Festivals.

At that time, she mainly invested money on bonds of the insurance companies and trust products through Licaitong, owned by Chinese tech giant Tencent Group. When she started to earn money from work, she also bought some equity funds.

Li's home is in Beijing, so she doesn't have to pay rent. She usually spends 30 percent of her income on consumption and invest nearly the rest on various financial products.

"I don't expect to make a fortune out of my investment. I only hope it outpaces the devaluation rate," said Li.

Peter Hou is a millennial working in the private-equity industry. The 33-year-old has a medium expectation from his investment. He said that besides the money spent, he spends a small portion of the rest on financial products of the banks. With a rich experience in financing, he invests most of his money in purchasing stocks and futures.

"My expectation on the annual interest rate of my investment is at least above 10 percent," said Hou.

Hou also uses the applications to manage his money. 

The rise of young online investors

At least seven million people have been using Yu'e Bao as their tool for wealth management, according to a report on the Chinese people's financial management in 2020, published by Alipay and the Shanghai Advanced Institute of Finance. About 40 percent of them have formed a habit of investment.

Meanwhile, people born after 1990 are growing to become the main body of investors. Compared to their parents, they are not only willing to invest instead of deposit, but are more willing to embrace technology than their parents. Most of the young investors preferred smart phone applications as the main channel.

The report shows that among the Alipay financial management users, 60 percent are under 35. Over 50 percent of the intelligent investment tool users are born after 1990.

Meanwhile, another report on China's online financial management market was recently published by Tencent's Licaitong and the National Institution for Finance & Development (NIFD). It shows that nearly 70 percent of Chinese used online channels to invest.

According to the report, 60 percent of the users are trying to add value to their money, while 52.2 percent are mainly after wealth preservation.

The younger generation are showing more interests in online channels than the older generation. Most of the post-90s are investing through applications such as Alipay and Licaitong, while their parents are still sticking to bank accounts.

In a report published in September by the School of Finance of Renmin University of China and the Institute of Ant Group, on online financial management and consumption, the popularization of the online platforms on wealth management, the number of young investors in three- and fourth-tier cities, known as the "small town youths," are growing by 14.13 percent, much higher than that of the metropolises. 

It is expected by the report that by 2022, the scale of investable financial assets of the "small town youths" will reach 101.7 trillion yuan (about $15.16 trillion), and the market scale for online financial management is expected to reach 4.7 trillion yuan (about $700 billion).

What can young people get from financial management?

Even though the market scale for the young people's wealth management is considerable, for themselves, they are not expecting to make a fortune.

"I earned about 30 percent interest last year from my investment, but in fact I don't expect to become rich from it," said 25-year-old Chen. She added that her biggest achievement is to form a good habit in managing her own assets.

"Usually, the money I would eventually spend I earned from investment, but it still gives me the sense of satisfaction. I will think twice before squandering my money now," said Chen, but it still makes her feel happy.

In fact, many young people of Chen's age said similar things. Investment has changed their concept of consumption, and even their lifestyle. And the online channels, with low threshold in the volume, enable them to make better use of the small amount of their idle money or income.

Meanwhile, making plans about their income also gives the young people a clearer goal in life and work.

"I can feel the motivation investment brings to my life," said Chen. "I'm earning money beyond my salary. I'm dealing with capital and making money out of it," she joked.

(Cover image by Feng Yuan)