Have you ever thought about how different generations in India invest their money? How do they differ, and where do their choices look similar? How do they balance between traditional (orthodox) investments like gold and fixed deposits and newer (heterodox) options like cryptocurrency?
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To answer these questions, 1 Finance Magazine carried out a detailed study on the investment patterns of Indians across generations. The research focused on three major age groups: Gen X (ages 45–60), Millennials (ages 29–44), and Gen Z (ages 13–28).
The survey revealed some fascinating trends: while all three groups participate in investing, the way they divide their money, the risks they take, and the products they trust vary sharply. In this article we will discuss the same and what every investor should know, no matter what age group they belong to.
Before getting started, let’s clarify two key terms
- Investment exposure – This simply means whether a generation has invested in a particular asset at all, even if it is a very small amount (as little as ₹1). If they have put any money into it, they are counted as having invested.
- Allocation – This means how much of their total wealth is put into that asset.
Example: If someone has ₹10 lakh in total investments and ₹2.5 lakh of it is in stocks, then their allocation to stocks is 25%.
Let’s start.
Real estate, an asset class everyone likes
Investing in real estate means putting money into property—like land, houses, or flats—to earn returns. These returns can come from property prices going up over time or from rent received regularly.
According to 1 Finance Magazine research, real estate remains the most loved investment across all generations. But the way each generation invests in it is very different.
Take for instance, Gen X
- 92% own property.
- On average, 53% of their total wealth is invested in real estate.
This means if someone from Gen X has ₹100, they invest ₹53 of it in real estate.
This makes sense because Gen X have been working for decades and had time to build wealth steadily. Their asset allocation also seems to be sufficient.
Now, let’s move to Millennials
More than half of Millennials (56%) own some kind of property. For those who do, real estate takes up a very large share of their allocation—about 57% of everything they own.
Millennials are often called the sandwich generation. This means they are stuck in the middle of many financial responsibilities all at once. They are:
- Trying to buy or pay off a home.
- Covering the costs of their children’s education.
- Managing weddings and other big family expenses.
Because of these heavy financial pressures, along with the need to give their family a sense of security through owning a home, real estate becomes a major focus of investment for Millennials.
Even though not every Millennial owns property, for those who do, it is where a big chunk of their money goes.
Only a small share of Gen Z—about 18%—own property. This shows that very few in this generation have stepped into real estate ownership.
But the twist comes with allocation. For the ones who do own property, it takes up a very large part of their wealth—around 61%.
Why so few owners?
- Gen Z is still early in their careers, so their incomes are lower compared to older generations.
- Many prefer flexibility, which means renting homes instead of locking themselves into ownership.
- Some already live in homes owned by their parents, so they don’t feel the need to immediately invest in their own property.
However, some Gen Z investors who do buy property end up going in too heavily. On average, these individuals put 83% of their total wealth into real estate—which is risky because it leaves them with little diversification.
Equity investments across generations
Investing in equity means you buy small parts (called shares) of a company. When the company does well, the value of your shares increases, and you can make money.
According to 1 Finance Magazine, people of all ages are involved in the equity. Here are the numbers:
- Gen X – 92% invest in the stock market.
- Millennials – 89% invest in the stock market.
- Gen Z – 79% invest in the stock market.
So, most people across all generations are familiar with and take part in equity investing.
But there’s an allocation problem
Although the participation in the stock market is high, but the allocation (how much of their total money they actually put into stocks) doesn’t align with ideal numbers:
- Gen X is allocating 25%
- Millennials, 22%
- And Gen Z, 27%
For GenX, the allocation is fine as they are closer to retirement.
But this is worrying for Millennials and Gen Z as they are young. They have a much longer future to invest, they have the ability and can afford to take the risks which gives them more time to benefit from the stock market’s growth.
But they are investing less than they ideally should. The reason could be the same as we discussed earlier for millennials who face many financial pressures which leaves them with less money for investments in stocks.
Gen Z is investing a smaller portion because they have only recently entered the workforce. Hence, their incomes as well as corpus are still relatively low compared to older generations. With limited earnings, they have less money available to invest, which naturally results in a lower allocation toward the stock market.
Debt investments across generations
Debt investments are things like fixed deposits, bonds, or government saving schemes. When you put money into these, you are basically lending your money to a bank or the government. In return, they typically promise to give it back after some time along with a small, fixed interest.
They are considered safe investments because the chance of losing money is very low. 1 Finance Magazine research reveals that almost everyone, across all generations, invests in them.
- Gen X : Average allocation is 18%.
- Millennials : Average allocation is also 18%.
- Gen Z: 66% rely too heavily on debt investments. On average, they put 19% of their money into debt.
At first glance, the numbers look close, but for Gen Z, this is a problem.
Why? Gen Z is young. They have decades ahead to grow their wealth. When you are young, you can afford to take more risks in the stock market because even if there are short-term ups and downs, you have enough years for your money to recover and grow.
But instead of using this advantage, many Gen Z investors are playing it too safe by putting too much money into low-return options like fixed deposits and savings accounts.
This behavior could be because of something called status quo bias. It means people prefer to stick with what feels safe and familiar, rather than try something new. For Gen Z, that means keeping money in simple products like savings accounts or fixed deposits instead of exploring stocks, mutual funds, or other growth-focused investments.
For younger investors, the ideal allocation to debt investments should be small. A small portion of debt acts as a safety net, but the bulk of the money should go into growth investments like equities, which can multiply wealth over time.
Gold investment across generations
Investing in gold means putting money into physical forms like jewelry, coins, or bars, or into financial forms like gold ETFs and funds.
The goal is to protect wealth, earn returns when gold prices rise, and provide a safety cushion during uncertain times.
Gold has always had a special place in Indian households. Families see it as a symbol of security and wealth. But how people prefer to hold gold has started to change with each generation.
- Gen X : Highest use of physical gold, with about 73% of them preferring jewelry, coins, or bars.
- Millennials : About 52% prefer physical gold.
- Gen Z : Only 34% rely on physical gold.
Even though the way of holding gold differs, all generations keep about 3% of their total investments in gold.
Indians still love gold, but older generations stick to physical gold, while younger generations are slowly moving away. Digital gold has potential, but it needs better rules to gain wide acceptance.
Alternative investments
Alternative investments are options outside of traditional assets like stocks, bonds, or gold. Examples include:
- Cryptocurrency (like Bitcoin, Ethereum).
- Peer-to-peer (P2P) lending, where people lend money directly to others through online platforms.
These are newer, less traditional ways of investing and usually come with higher risk and uncertainty.
1 Finance Magazine research reveals a generational divide when it comes to investing in alternative investments. Take crypto for instance,
Cryptocurrency clearly shows how age impacts investment choices:
- Gen X : Only 8% have invested in crypto.
- Millennials : Around 15% are in crypto.
- Gen Z : About 16% have invested in crypto.
When we look at alternative investments, most options are not as popular as cryptocurrency. For instance, peer-to-peer lending—where people lend money directly to others through online platforms—has very low usage, with only about 7% of investors across all generations taking part in it.
How much do alternatives matter in portfolios?
- Across all generations, alternative investments make up only 1% of total portfolios.
- But among those who do invest in alternatives:
- Gen X allocates around 10% of their portfolio.
- Millennials and Gen Z allocate slightly more, about 22–23%.
Alternative investments are still tiny in overall portfolios but the younger the generation, the more willing they are to try new types of investments compared to older generations. This is because they have greater access to technology and are more comfortable using digital platforms. Since cryptocurrency is a new and non-traditional form of investment, it naturally appeals to younger investors, who are often curious, experimental, and eager to explore fresh opportunities.
To summarise
The data shows an interesting contradiction. Gen Z, who have the longest time to invest and can afford to take risks, are actually being the most cautious by investing in low-return options like debt instruments instead of assets like stocks.
On the other hand, Gen X, who are closer to retirement and should ideally be more conservative, hold a more balanced portfolio between different asset classes.
Millennials and Gen Z are more open to experimenting with new platforms and digital assets like cryptocurrency, but they are not investing enough in options like stocks.
Finally, Gen X continues to favor traditional assets like real estate and gold. These have historically worked well for them, but focusing too much on these areas may reduce their portfolio’s diversification.
What should you, as an investor, do if the data aligns with you?
| Generation | What should you do? |
|---|---|
| Gen Z |
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| Millennials |
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| Gen X |
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The bigger picture
Each generation has something to learn from the others—Gen X’s experience with traditional investments, Millennials’ balanced approach to technology and stability, and Gen Z’s openness to new opportunities.
The most successful investors understand their life stage, risk capacity, and long-term goals, then allocate their money accordingly rather than following what feels safe or familiar.
A financial advisor plays a key role here by helping investors cut through biases, avoid mistakes, and design portfolios that match both present needs and future aspirations. With the right guidance, every generation can build stronger, smarter investments.
