“Kids and family should be my priority, not my personal investments. … “Women are not good with numbers” … “Investments and taxes are too complicated for women to understand” …
You would hear people, including some women, repeat those lines over the years. This is despite the fact that women carefully follow their financial plans and are meticulous with their personal and family budgets.
Now is the time to bury some entrenched myths. Look past these misconceptions to ensure complete financial freedom.
Children’s education is more important than retirement
Family and children are high on women’s list of priorities. So much so that they neglect their own goals and aspirations. However, you have to keep in mind that you can take out a student loan to finance your children’s studies, but not for retirement. So start early, invest for the long term, and don’t divert your retirement savings to other goals. Even if you don’t get a salary, invest your regular savings, even small amounts, to build capital for your retirement.
Women can’t handle risky investments
Stocks are known to generate the highest returns of any asset class over the long term. But financial planners say women’s risk aversion is leading them to rely more heavily on fixed-income instruments. “By default, women tend to be more risk-averse. One of the reasons for this is the uncertainty caused by interruptions in the race,”
The key is to remain unfazed by market downturns, like the current one until you hit your targets.
But even if you’re wary of stocks, you can still look for “safe” instruments, but make sure you stay invested for the long haul. “Money needs to be invested long-term to grow, and risk is mitigated over long periods of time. But even options like PPF and EPF create wealth if we invest regularly, let it go, and accumulate and invest more as we earn more.”.
Gold has been shown to be the best way to save
Purchased and inherited gold is a great asset in many women’s wallets. However, don’t put all your golden eggs in one basket. Diversify your portfolio across asset classes – add equities and fixed income to your asset allocation. If you need to invest in gold, consider options like gold ETFs and gold government bonds. This accomplishes the dual purpose of protecting your portfolio from inflation and ensuring liquidity. And many women have begun to consider these options. “New investments are also being made in gold government bonds. When we don’t see gold exposure in the portfolio, we recommend gold ETFs and these bonds,” says Billimoria.
After marriage, all assets and investments are said to be common
Financial compatibility, along with other factors, is indeed key to marriage. You need to be in sync when it comes to making important financial decisions, such as: Buying a home, planning your children’s education, planning your retirement, etc. However, as mentioned above, you should also not completely ignore your personal wealth-building goals. You can contribute to investments for common goals, but you can also create a separate group for your personal goals. “You can contribute to your family’s investments, but you can also invest separately for yourself. You can invest to build a pension, vacation, or other necessities. A separate and independent body is also desirable for women without income,” says Billimoria.
Women are not good at financial decisions
Many women tend to leave financial decisions to their husbands. However, it is not enough to be an active woman, she must be closely involved in crucial investment decisions for her family. Only when she is aware of her family’s investments and takes full responsibility for her own investments will she be able to experience financial independence in the true sense of the word. “Women tend to be 100% confident when taking on responsibilities and as such are reluctant to invest because they are always in learning mode. Women, if encouraged, can be great investors focused on their goals and confident in funds”. Managers/Consultants tend to stick to their decisions in tough times rather than jump overboard.