Investing is not just for old men!! Young women should invest too! For far too long women have abdicated their investing role to the men in their lives. So it is their father, husband, brother, son – at various points in time who take care of their investing. This has to come to an end because women – a very large percentage of them – will be alone at various points in time. Today women may be unmarried, divorced, widowed, or be in a relationship with another woman. In such cases they need to manage their investments, right?
I do see a lot of women take up investing and I know a small group of women who are serious investors in the equity markets. Not just traders but serious investors with a long term view. However, they are the exception, not the rule.
Women are very close to men today in the pay structure – and the good start goes on till they have a baby. At that stage corporate India starts paying a woman less and the women also justify that saying ‘we now want to work part time’. Sadly corporate India has not learnt to reward women for this very important role – sorry for digressing.
Where to start?
Sit with your parents when you are about 18 years of age and make sure that your 45 year old mother also participates in the learning. Learn the basics of a bank account, term and health insurance, mutual funds, credit card, compounding, income tax, and retirement planning. This is of course not an exhaustive list, and is just indicative.
Once you start earning
A very important stage. Many people start approaching you now to buy a LIC policy, etc. At this stage learn to say no. Go and get yourself a simple TERM LIFE POLICY and say NO to anything else. Get yourself (and your parents?) medical insurance. Start saving money aggressively. If you are staying with your parents target saving about 90% of your take home salary. At worst you should save about 50% of your salary. Remember you are not paying for the food, and roof.
Convert savings to investments:
Once you have saved some money – for the proverbial rainy day – you need to convert these savings to investments. You may have opened a small ppf account, keep it small. For your tax benefits you must involve a product called ELSS. Do a Systematic investment into a good ELSS GROWTH OPTION..and this could be your first investment ever! Congrats. If you have money over and above this look for an INDEX fund with low management costs or open a demat account and start buying low cost ETF and build your portfolio. Start learning about mutual funds – this is also a very important step in your wealth accumulation. Once the saver moves to an investor profile, she will look for help – it is but natural. Keep learning about investments.
Get the right person in your team:
You now need a financial planner – he may not be the first person you meet. Take your time and remember it s a serious start so take this work with utmost sincerity. He IS NOT AN INVESTMENT PLANNER, the cfp is expected to make sure that your budget, tax papers, philosophy statement, asset allocation, nominations, etc. are in place. An investment adviser is capable of helping you choose investments – equities, mutual funds, debt instruments – go the whole virtual investment with him/ her.
Your money, your investing. Just do it…
Keep your fingers crossed – now that does not give you the right to keep your eyes closed!! Keep learning..
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