Statistics recall that on global average, women earn 23% less than men for the same work.
Least to say keeping the gender pay gap challenges, reaching parity aside it is even more important for women to consider investing their hard-earned money smartly.
The question on the minds of women often is when is a good time to begin investing?
If you are someone who feels unsure about investing, here’s advice to help you, as a woman, become self-sufficient and own the narrative of your finances.
Remember that only your hard-earned money is yours!
Why must women Invest?
Initially, I think women should invest because men can.
Well, getting into the actual logic, investing is a great way to grow their income.
A working woman has the decision to pick a part of her disposal income each month and put that in markets.
This could help her save for many things: a vacation, a degree, a vehicle, or even have extra money saved for a rainy day.
There is no hard and fast rule that a woman should work in order to invest.
Investing in markets can work as a strong earning or securing long terms goals mechanism for women who are great home administrators.
What is the right time to start the Investing journey?
The above question might invite a bunch of more brain-teasing questions for you starting with, the right age for a woman to start investing? Or Is it when you get your first in-hand salary? Or is it when you get increment? Or passive income? And so on…
The good news is that the answer to such complex questions is not complex at all!
The universal Investing fundamental thumb rule states, “The best time to plant a tree was 20 years ago. The second-best time is now.”
Facts to be stated and the truth is told, if only were women encouraged to financially plan their lives earlier, there is no doubt that not only would they be more empowered today but would also have better grounds in the business arena.
We are happy to state that from the past decade there has been a significant increase among the female counterpart to have found high-growth investment tools.
This is not just limited to finding but they have proven that they would be much further ahead if they had pulled the trigger earlier.
Having said that, nothing is ideal and static for someone naïve trying to get into the investment platform not all forms of investment theatre.
Investing can be daunting in many ways, there is no denying the fact that some routes are far less challenging and less bulky than others.
After all, who doesn’t want to avoid the unnecessary hassle when it can be done easily?
As easy as selecting more suitable investments over others?
Lately, there are trends and buzz running wild over the internet about “kinds” of investment that might work in the women’s favour!
Do you think there are certain ‘kinds’ of investment that might work for women?
While investing the first thing that comes to an investor’s mind is RoI (return on investment), and one must invest in a way to get the best RoI possible.
But why does a certain strategic investment work for women?
When it comes to responsibility, a woman is exceptionally busy because of the added responsibility of multi-tasking work with household responsibilities.
Even though it is advised to have a look at your portfolio once a week, the majority of women face the challenge of reviewing their portfolios periodically.
Out of these, a majority might have the natural urge to actively handle their portfolio and have a look at how their hard-earned money is performing in the market.
Now that we understand that due to various parameters which govern portfolio building, every portfolio is unique and hence it is crucial for the Portfolio Management professionals to smartly commit and allocate their time to provide justice for every individual portfolio.
Here are some ideal investment options for Women:
- Exchange-traded funds (ETFs)
With the advancement of technology, the traditional rigorous investment methods are put in peace.
ETF can be one of the best choices for investments because it considers the universe of assets be it equity, debt, stocks, bonds, commodities, or currencies.
One can go ahead with buying a share of that basket, similar to buying shares of a company.
ETFs are traded on the stock exchange and offer the ease of stock trading along with the diversification benefits of mutual funds.
Isn’t that amazing?
- Mutual funds
Mutual funds are is always a good option if any type of investor in anytime type of market to start at any time.
Mutual Fund acts as an instrument to effectively allocate your funds based on your goals.
Therefore, in case you are a beginner, you can simply begin with a systematic investment plan (SIP).
Mutual fund investing help inculcate a certain amount of savings every month, wherein the amount will be auto-debited from your account every month, hence helping you remain committed to your investment strategy.
Owning stocks/equity of a company means owning fractional ownership of a company.
Investing in equity is considered the riskiest because of volatility, global sentiments and an ocean of other such parameters.
Note that even if equity investing is risky, it has exceptional potential to yield if invested in the right way possible.
While most women would love to have the gold of their own, not all of them want to wear it.
Gold can be a good investment too.
Gold monetization schemes are preferred which gives interest on the deposited gold in any form, be it jewellery, bars or coins.
Remember to check the purity of gold deposited because you need to submit the gold purity certificate to the bank or fill out the KYC (Know Your Customer) formalities.
Usually, banks provide 2% interest calculated on the amount of weight gold deposited.
Investment Mistakes Women Must Watch Out
The below points are mentioned keep in mind that while venturing into spaces that men have long dominated, it is preferable to examine some common practices of the past that may be avoided.
Risk tags along wherever there is Investment mentioned.
The proven fact is that Women are known to be much more patient investors and better risk managers than men.
But this could be ruled off if the investing journey is too conservative.
This is because it could harm your long-term portfolio performance, therefore losing out on comparatively and significantly higher returns.
Letting your partner manage your investments
Remember the phrase which we called out in the blog earlier, “Only your hard-earned money is yours”, this is also true for investing.
There is a common practice seen among Indian women to hand over the investment decisions on their partners, putting them at a massive disadvantage of being unaware of family assets or investments.
Hear this out Women, “If you want to be truly independent, you must have an investment portfolio of your own, solely controlled by you!”
You might be a little confused here because earlier in this blog article we stated Gold as one of the good investments, and whilst we ask you to be careful in avoiding mistakes with investing in Gold.
Note that ‘just’ investing in Gold won’t be considered the best investment strategy.
Along with buying gold women must also explore other investment opportunities to diversify their portfolios.
Otherwise, they would have just gold minus missing out on all the golden opportunities!
Exploring other investment ways, diversification helps you focus on financial assets instead of only physical assets.
Concentrating more on Fixed deposits
Statistics state that women possess more FDs than men in India.
Most women in India either prefer saving accounts and fixed deposits as the best-case scenario to keep their hard-earned money.
Not just that, a majority of women have huge FD while leaving no room to have liquid assets and forgetting about inflation as a whole.
Note that going for Fixed deposits is not wrong only that today when there are hundreds of investments available fixed deposits, should be considered the least based on various global factors.
Because storing money beyond a limit in these does not work considering their comparatively low-interest rates.
That money is just not even enough to par for inflation, resulting in negative growth.
Hence, considering the time value of money, to view savings accounts or fixed deposits as a vehicle to maintain fund liquidity.
And the rest can be parked in various growth instruments.
So, are you ready to start yet, What’s Next?
If you are comfortable interacting and then investing, a local investment advisor is your best investment journey suitor.
Make sure you do your homework on understanding the track record of success of the investment advisor before going ahead.
Investment professionals help set you in your investment journey.
If you are a tech-savvy person and wish to invest online, Fintech apps are at your service.
These Modern technologically advanced Investment Professionals provide an effortless mechanism for you to start your investment from any corner of the world.
Note that here the KYC process is completely online, and is not at all time-consuming.
Some of these premium apps might provide an option to connect with a personal advisor, whereas others direct you to follow a pre-designed investing model.
Tracking your portfolio online and evaluating your performance more regularly is a smooth process now.
Be it Offline or Online route, whichever route you choose make sure you thoroughly know the in-person resource as well as the fintech app provider.
Investing might sound rocket science in the beginning but once you start you see your growth.
Your money will grow, confidence with growing, your future might get more secure and your dream home or car would not just be limited to a dream.
Most importantly, for some, you would be a step closer to your financial freedom.
Know that as a woman, you hold the power to be patient, smart and can efficiently invest your money which are all the traits of a Good Investor.
Sticking and utilizing these traits for a longer horizon will not only help you reach your financial goals but also lead you down a path of growth and opportunities.
Whenever faced with questions regarding investing, please remember to not shy away from seeking professional help because we all understand investing is complex and our intent is to make it less complex and more understandable for you.
When it comes to investing, every question is important and none stupid.
You just have to put yourself together for once and start.
For what matters is starting, because why should men have all the fun!