The modern era of technology has introduced the emergence of micro-investing platforms and applications that establish investment as a kind of game. Young people, especially millennials and Gen Z, have drastically changed the way they manage their money. Thus, these platforms base themselves on the values of micro-investing and imply elements of gamification to change people’s financial actions, develop tendencies to invest, and build the foundations of a new generation of investors.
What is Micro-Investing?
Micro-investing is investing in various stocks, bonds, or ETFs (Exchange Traded Funds) by occasionally rounding up spare change. Apps that are currently trending include Acorns, Stash, and Robinhood. These apps have brought this feature into the limelight since users can begin investing with low money. Consistent investments can work wonders and slowly help the user build his wealth without necessarily having to fund a large amount at once.
To millennials and Gen Z, who may be struggling to pay student loan services or those with low earnings and cannot afford to make risky, high investments, micro-investing is a safe and affordable way to try their luck in the investment market.
The Role of Gamification in Investing
Gamification is a process where game elements are introduced in non-gaming fields, including finance, to make it more engaging and interactive. Robinhood, Public, and SoFi are among those investment apps that have applied rewards, badges, competitions, and progress bars as means of gamification to encourage users to invest actively and increase their knowledge of the financial markets.
For instance, users can gain points or badges for achieving specific activities such as making their first investment, saving a certain amount of money, or investing continuously. These incentives can greatly influence users' psychological status, keeping them engrossed and making them feel like they are achieving something.
Why Gamification Appeals to Millennials and Gen Z
Since millennials and Gen Z are so deep into technology, they are products of the smartphone era, social media and video games. That is why they are inclined to use apps that include these familiar components. Through gamification, investing becomes a fun process that appeals to the younger generations’ need to achieve something instantly. It also eliminates fear and stress when addressing financial decisions and investments, thus making investing seem reasonable and possible. Many investing apps are designed to have small and easy-to-achieve investing goals which appeal to their need for simplicity, freedom, and preparing for future stability.
Encouraging Early Investment Habits
The advantage of using micro-investment and the concept of gamified platforms is early investment. Savings made at an early age, no matter how little, can be very productive later if one considers the principle of compound interest. These platforms help reduce the hurdle rate, allowing young people to easily be in charge of their financial destiny.
Furthermore, since many of these applications contain educational material, they act as financial literacy instruments. People get information about the stock exchange, financial risks, and individual financial management in a simple but engaging manner that allows them to make the right choices.
