Women's Day 2024: Meet women who learned to manage finances and now drive the investment decisions of families Some of them are driving the investment decisions of their household, while others are equal partners in financial matters. The International Womens Day this week is an appropriate time to celebrate such women who are working to spread financial literacy among their friends, relatives, and colleagues
The Reliance Power IPO in 2008 changed her fortunes, says Soniya Jain. No, the Noida-based self-employed professional didn’t make money from her maiden foray into stocks. In fact, by the time she sold her holdings, the value of the Rs.15,000 invested in the IPO had dropped to Rs.6,000. But losing 60% of the principle imparted an important lesson that changed her perspective. “I realised that direct investments in stocks were too risky and required expertise. I am busy with my work and my husband is a senior manager in a PSU. Analysing stocks is just not our cup of tea,” says Jain (see picture).This epiphany nudged Jain and her husband to seek professional advice on how and where to invest. The advisor, Noida-based Money Options, introduced them to diversified equity mutual funds and the Jains embarked on an investment journey that has helped them achieve several goals in the past 16 years, including buying a new car, partially funding their daughter’s education, and making the down payment of their apartment. “Had we not suffered a loss in the Reliance Power IPO, we probably would still be investing randomly in stocks on our own and might have missed the opportunity offered by mutual funds,” she says.
This week’s cover story showcases women like Jain who have taken charge of their family’s finances. Some of them are driving the investment decisions of their household, while others are equal partners in financial matters. The International Women’s Day this week is an appropriate time to celebrate such women who are working to spread financial literacy among their friends, relatives, and colleagues.
Meet Richa Malhotra, a chartered accountant with tax filing firm Taxspanner.com, who is nudging her junior colleagues to start investing as early as possible. “Even a small amount put aside from your salary every month can grow to a big sum over the years due to compounding,” she advises them.
Top financial goals of women
The financial security of the family tops the list of financial goals for women.
Note1:More than 52% women want detailed expert advice for reaching these goals.Note2:Figures are % of 417 respondents. Figures don’t add up to 100 because of multiple responses.
The Delhi-based chartered accountant is speaking from first-hand experience. Malhotra started investing in recurring deposits and small savings schemes on the advice of her father when she started earning at 23. But the global financial meltdown of 2008 got her interested in stocks and mutual funds. “I read a lot about investment strategies, attended webinars and spoke to many investment experts,” she says. Now, she not only manages her family’s investments in mutual funds but also advises her relatives and friends on mutual funds, helping them choose schemes and products that are aligned with specific financial goals.
Women manage money better
It is generally assumed that women are not very clued in on financial matters, especially when it comes to investments. This is also why the average Indian woman doesn’t have a say in the investment decisions of the family. But Bengaluru-based Mini Drolia (see picture) and her husband Satyam Upadhyay are exceptions to this rule, where the husband has no interest in financial matters and the wife takes all the investment decisions. Like the other women featured here, Drolia started her investment journey with bank deposits, but graduated to mutual funds after she learnt how they work. The couple puts roughly Rs.60,000 every month in a mix of equity and hybrid funds, while another Rs.20,000 flows into fixed income options such as the EPF and PPF.
RICHA MALHOTRA
39 years, New Delhi
A chartered accountant, Malhotra is well versed in tax rules and investment regulations. She started her investment journey with a recurring deposit when she got her first job, but gradually acquired knowledge of the financial markets and other investment products. Now she manages the family’s investments and has diversified the portfolio across equity funds, bonds, and gold ETFs.
HER MONEY MANTRA
Even if income is low, don’t hesitate to invest. Start with small amounts and increase when your income goes up.
Drolia’s example validates an important reality: Women possess all the qualities required to be a successful investor. They are more disciplined and patient than men and don’t get overconfident. In investing, overconfidence is a toxic trait that can prove ruinous. It is better to be less confident and make fewer mistakes than go all out and lose your shirt. A study by the University of California shows that men make 1% less than women when they trade stocks. Men are overconfident about their stock picking skills, which makes them trade more and they end up paying more brokerage in the process.
MINI DROLIA
31 years, Bengaluru
Her engineer husband has no interest in money matters, so Drolia takes all the financial and investment decisions. She even made him buy a Rs.2 crore term insurance cover when they got married two years ago. Drolia relies on her financial advisor for picking stocks and mutual funds. She also regularly increases her investments every year when the income goes up.
HER MONEY MANTRAFind a trustworthy professional financial advisor and let him manage your money.
Women are also less in a hurry to get started and wait before taking the plunge. “It is presumed that men are more comfortable with risk while women are risk averse. Women are not risk averse but risk aware,” says Hena Mehta, Co-Founder of Basis, a firm that simplifies finances for Indian women. “A woman may take a slightly delayed decision to invest in equities compared to a man. But that’s because she goes through everything in detail, examining the risks and other aspects very carefully,” adds Mehta.
PRITI RATHI GUPTA
FOUNDER & MD,LXME
Note: “The golden rule is to split income into three buckets. Spend 50% on essentials, 30% on discretionary items and invest 20% to beat inflation.”
Willing to take advice
An important difference is that women are more willing to seek advice from financial experts than taking the DIY route. “Women don’t hesitate in asking and are usually very open to listening and understanding the processes and working,” says Prableen Bajpai, Founder of FinFix. Drolia is a finance professional but relies on an investment advisor for managing her stocks and mutual fund investments. “During the Covid-induced crash of 2020, when everyone was panicking and moving money out of stocks, my advisor told me to keep calm and remain invested,” she says.
SONIYA JAIN
48 years, Noida
After a steep loss in 2008, Jain decided against investing in stocks directly and opted for mutual funds instead. She and her husband have been investing in diversified equity funds for the past 16 years. The investments have helped them achieve several goals, including buying a new car, partially funding their daughter’s education and making the down payment of their flat.HER MONEY MANTRA
Don’t invest in stocks directly if you don’t have time and expertise. A fund manager will deliver better returns.
Not everyone is willing to listen, though. Despite the arithmetical sense it makes, young people are not able to save much during their early years. “We advise such women to follow the golden rule of budgeting. Split your income into three buckets. Spend 50% on essentials, 30% on discretionary items and put the remaining 20% into assets that beat inflation,” says Priti Rathi Gupta, Founder and Managing Director of LXME, an online platform that advises women on money matters and helps them invest. Gupta says as your income grows, so should the contribution to the investment bucket. “That bucket should grow bigger because as you grow older, your financial goals also grow bigger. You have more responsibilities and when you start a family, you need to save for your children’s education as well,” she says.
TEENA SHAH
45 years, Mumbai
An IT entrepreneur, Shah got her financial grounding from her businessman father. He instilled in her the basic principle of budgeting: save before you spend. She rues her initial mistake of buying too many life insurance policies that gave sub-optimal returns. But she more than made up for that mistake when she started investing in stocks and mutual funds. Now she has a diversified portfolio of equity, fixed income, and gold.HER MONEY MANTRA
Life insurance should only be bought for protection. Don’t treat it as an investment.
Things are even more tough for single women. “As a single woman, your financial planning should focus on both your present and your future,” says Anupama Sharma, Executive Director, 360 ONE Wealth (see guest column).
But there are exceptions too. Anusua Sarkar (see picture) understands the importance of starting early and the power of compounding. The 27-year-old finance professional has already built a sizeable portfolio of stocks and equity funds. She is aggressively investing in equities to achieve her financial goals.
Don’t shy from speaking up
Unfortunately, many women voluntarily don’t debate their husbands’ financial decisions. Even women who are aware of the financial implications don’t interfere in money matters because they don’t want to disturb the peace in the household. This is unfortunate, because the involvement of a woman in financial decisions could lead to better outcomes. Besides, couple tend to engage in money fights over the wrong issues. A survey done by ET Wealth in 2019 showed that while 42% couples argue over spending decisions, only 22% question the money decisions of their partners. Bengaluru-based Mangala Krishnamurthy (see picture) is one of them. When her engineer husband Shankar Ganesh wanted to invest in a second property, Krishnamurthy explained to him why it would not work for them. Besides the perils of putting all eggs in one basket, it would lock up a large part of their net worth in an illiquid asset.
MANGALA KRISHNAMURTHY
51 years, Bangalore
The financial difficulties her parents faced during her early years instilled discipline and made her resilient. Funded by her sister, she completed her studies and started working at 18. Krishnamurthy diligently follows her mother’s advice to save at least 50% of income. She invests in stocks, mutual funds and gold, and managed to convince her husband not to buy property as investment.
HER MONEY MANTRA
Invest only in bluechips. Buy shares of companies (such as the Tata Group) that have been around for at least 20 years.
“The investment would have required a huge downpayment and the loan EMI would have left us with very little to invest in other assets,” she says. It took a lot of convincing, but Krishnamurthy finally managed to make him understand that buying property as an investment was not a good idea. “I also didn’t like the idea of being saddled with a loan when interest rates were so high,” she says.
PRABLEEN BAJPAI
FOUNDER, FINFIX
Note: “Women don’t hesitate in asking and are usually very open to listening and understanding how an investment product works.”
Goal-based investing
Another key difference is that women usually tend to invest with a goal in mind. Whether they are saving for retirement, a holiday or even jewellery, the investment is linked to the objective. When she started working in 2009, Malhotra’s first investment was in a three-year recurring deposit. In three years, the monthly investment of Rs.10,000 yielded enough for her to go on a foreign holiday with her family in 2013. “One should not invest at random, but link investments to specific goals,” she says.
ANUSUA SARKAR
27 years, Delhi
An MBA in finance, Sarkar is bullish on equities and willing to take calculated risks. She invests close to Rs.40,000 every month in equity funds. Her biggest asset is the time available for her to grow wealth. Sarkar also invests in stocks directly, but only in blue-chip companies. She is well versed in tax rules and has invested in NPS to claim the additional Rs.50,000 tax deduction under Sec 80CCD(1b).HER MONEY MANTRA
Buy stocks of blue-chip companies that have a sizeable market share in their respective segments.
A survey by Bajaj Allianz Life Insurance shows that the financial security of the family is the top priority for women investors (see graphic). This is why Mumbai-based IT service entrepreneur Teena Shah (see picture) has invested in a diversified portfolio for her daughter’s goals. Armed with good knowledge of the financial markets and mutual funds, Shah invests in stocks and equity funds, but has also invested in the Sukanya Samriddhi Yojana to lend stability to the portfolio.
HENA MEHTA
CO-FOUNDER, BASISNote: “A woman may take slightly longer to invest in equities. But that’s because she goes through everything in detail, examining the risks and other aspects.”
This story originally appeared on: India Times - Author:Faqs of Insurances
