Indian women have an inherent knack for saving! They have the art of managing finances by whatever means, keeping in mind the expectations and requirements of everyone in the family. According to personal Finance Expert and Author, Suze Orman says, “Women can invest, save, and handle debt as well and skillfully as any man.” Yet, in India we still see a dysfunctional relationship between women and investments beyond the traditional methods.
We are doing our best to manage the work-family balance in our respective lives. BUT DO WE actually understand the power of money? What Money can do for us? And, how should we utilize our savings?
There is a huge gender gap in financial literacy in our country. Lack of knowledge and fear of judgement often hold women back from taking financial decisions for themselves. However, all this is fast changing. According to 6th Edition of #WorkingStree report, 86% of working women expressed a desire to learn and upskill themselves in areas like budgeting, investing, saving, and other financial instruments. Well, now thanks to technology we have access to so many resources and experts to gain better understanding about finances and investments.
As a Financial Planner, I see a lot of women expressing their interest in investments, mutual funds, SIPs, and all. But when time comes, they are just unable to take the step because of some common misconceptions and myths related to money management they might have.
So, I decided to share 10 common misconceptions or myths about investments that most have and let’s debunk them for better understanding.
#1. Homemakers don’t need to know or think about “Investments”
Homemakers have a natural knack for saving and managing money. They manage household expenses, budgets, save those few bucks under the mattress or closets or banks. They save because they want money to be handy in case of emergency. With financial planning, homemakers can not only plan for emergency funds, but also grow that money as well for more goals. Smart investment can give you rewards for the savings in dal and chai ke dabbe and all aspects.
#2. Investing requires a LOT OF MONEY.
Investments are not only for RICH, if you have a lot of money. There is a famous tagline of a brand – “’पहले इस्तेमाल करें फिर विश्वास करें” (first use it, then trust it). Mutual Funds Investment starts from a minimum of INR 500 and can increase up-to your capability. Understand how it works, then only increase the amount.
#3. Gold is a safe Investment
With the new amendments in the Tax regime, I would suggest to buy in Gold which you actually wear, or else accumulate that in Digital form as in Gold Mutual Funds and ETFs. They preserve deductions and taxes as well. And most importantly, readily available to your liquidity as well.
#4. Fixed Deposits are the Safest and Best Investment Option
I do not deny the fact that FDs are not good. However, we have lock-in in them and least of the return. Besides that, opt for Auto-Sweep in your Savings account to have the benefits of FD return with saving account perks with having cash in hand. I also recommend, FD Laddering- if you want to invest in FD.
#5. I am risk-averse- Investing is not my CUP OF TEA
If you are a risk averse, use it as an advantage and make this your strength. When you are afraid of taking risk with your money – you tend to do more research, plan better and try to have a thorough understanding before diving into investments. Thus, helping you achieve diversified and stable portfolio.
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#6. Investments are RISKY
Investments work on the Eighth wonder of the world – “COMPOUNDING.” Investments do carry a certain amount of risk, but they all bring benefits with them. Investments can help you in- achieving Financial Goals, Family’s Financial Security, Avoiding Debt trap etc. The risk from the investments can be mitigated by professional guidance and DIVERSIFICATION.
#7. It’s too late to start Investment journey
It’s never too late to think about investing. It’s always suggested to start in “बचपन” though you may do it till you are “पचपन”. Yes, if you start early, you do get better results; but that doesn’t mean you cannot build your investment portfolio later in life.
#8. You shouldn’t invest if you have DEBTS
Obviously, paying high-interest debt should be your priority. However, you should start managing your investment along with your low-interest debt to have a balance in life. Investments can also help you accumulate funds to achieve your financial goals, including paying off your debts.
#9. We do not need to worry about retirement, let’s think about other goals like buying a house or child’s education
To your surprise, every other GOAL can be completed by LOAN, but the truth is no one is there to provide you a loan for your RETIREMENT expenses. So, one should start planning for the retirement alongside as well- the sooner, the better!
#10. Investing requires a LOT of Time
As a matter of fact, investing doesn’t require a LOT of MONEY or TIME. Always have your investments aligned with a GOAL; once your goal is achieved- enjoy the achievement. Remember, regular follow-ups are for the ailments not for the investments! Investments need to be reviewed after a pre-defined time as per your GOALS.
Financial knowledge is not just for working women. It is for EACH and EVERY WOMAN. It can empower and make you more independent. With Financial Literacy, you can become more confident to take an interest and active participation in financial decisions for ourselves own and for family.
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Meet our Guest Post Author: CFP Diksha Sethi, is the founder of Penny Pathshala, whose vision is to empower every individual and kid with money management skills. She is a freelance trainer specializing in Financial Literacy and Behavioral, Communication Skills.