Hesitant about investing? Want to be braver? Yamini Sood, Senior Vice President, DSP Investment Managers, will convince you to start investing
As Hillary Clinton famously said, “If you teach a man to fish, he’ll eat for a lifetime. But you teach a woman to fish and she’ll feed the whole village.” It accurately sums up why women must strive and take a step ahead towards financial education. We read every day about how women have broken the glass ceiling and ventured into unconventional careers that were traditionally dominated by men. A woman bus driver Prema Ramappa in Bengaluru, Shatbhi Basu known for her expertise in spirits heading a professional bartending institute in Mumbai, Harshini Kanhekar from Nagpur who is the first and only woman firefighter in our country, and many more. It is heartening to see women aspiring, believing and achieving.
However, as per a National Family Health Survey, 43 per cent of married women in the age group of 15 to 49 years were working in 2005, which declined to 31 per cent in 2015-16. And, if you were to further drill down to how many of these working women take their own investment decisions, the number shrinks dramatically.
When it comes to investing, most women depend on their fathers, spouses or even sons to help them, seldom taking control. Here are some common hesitations expressed by women, and why you need to move past them…
“I am a homemaker; my husband makes the money and invests it too”
The average life expectancy for women in India is 68 years, while it is 64 years for men, according to NITI Aayog. While averages can be misleading, many women outlive their men, and end up being beneficiaries of insurance. It might be intimidating to learn about investing in the later stages of your life, so it is prudent to take interest in it as early as possible. Also, when you are responsible for many small and large household decisions, why not facilitate your spouse’s investing decisions as well by gaining financial awareness?
Additionally, with divorce rates going up and women receiving alimony, or daughters inheriting family wealth, life has its own way of challenging us out of our comfort zone. A sudden windfall can also attract a number of ‘well-wishers’ with dubious financial wisdom. ‘Being aware’ is better than just having to beware.
“I make money, but I have no interest in managing it. We have divided our functions”
No empowerment is complete without financial empowerment. And financial empowerment can only be achieved by taking charge of your investments. Money is just a means to an end, and this end might be really far away. The wealth you create is not just a digit in your bank account; it is your safety net that needs to grow. It is not just your right but your duty and responsibility to know how to grow this cushion for crucial and unforeseen times ahead. There are many women who leave lucrative careers to fulfil their responsibility as caregivers to their ailing parents or growing children. But, as former risk analyst, mathematical statistician and author Nassim Nicholas Taleb says, the monthly salary is an addiction. If this addiction is withdrawn for some unfortunate reason where you have to stop your employment, it is your investment income that will work to provide the sense of security in the absence of the salary.
Investing is a life skill that needs to be learnt irrespective of what role you play in your household. So, learn to invest or learn to delegate by identifying a good financial advisor.
“My father/husband/brother is better at investing”
On the contrary, women are known to be emotionally stronger than men, less prone to panic and to fickle decision making. These are the qualities of a passive investor that can have great benefits over a long period of time on the overall portfolio. “If you have a 150 IQ, sell 30 points to someone else; you need to be smart, but not a genius,” says Warren Buffet, the most popular investor in the world. A research paper by the University of Florida and the Singapore Management University tested the hypothesis that alpha males are bad investors and tended to underperform. It concluded that investors with higher-than-average testosterone levels “trade more frequently and have a stronger preference for lottery-like stocks”. Though one can’t generalise, the moot point is that the average Joe is no different from the average Jane, which we might consider ourselves to be. Do not think that men, by virtue of their gender, are more intelligent than women about investments.
“I have no time for investing”
As a woman, you find the time to groom yourself, to spend with your family, to cook their favourite meal, and so on. It is all about priorities; you need to find the time for investing. Start with 30 minutes a week dedicated to reading about investing, and slowly gather pace. The pace will automatically pick up as your interest increases. Another trick is to start slow, by investing a small sum based on ‘your’ decision to invest and then start monitoring the same. Over time, you will gain confidence and experience.Let your investments slowly gather pace.
“I see people making losses in stocks, so I save money in my bank account”
Saving is not the same as investing. Investing encompasses various options and tools to effectively grow your money across assets such as fixed income, real estate and gold, not just equity. The pace of growth of your money has to be higher than the pace of growth in the prices of things you buy, and the experiences you need to give yourself. Tools such as SIPs (systematic investment plans) into passive or active diversified equity funds, hybrid mutual fund options that move money dynamically into different assets depending on their attractiveness, and high quality fixed income funds are a good place to start for a novice investor wherein professionals manage the money on your behalf.
Also read: 5 Ways You Can Up Your Savings Game This Season