Salary disparities between men and women persist, making it more important for women to carry the responsibility of properly investing their hard-earned money until men and women achieve parity. Maybe you are a stay-at-home mom, taking care of kids. Investing in the stock market is a wonderful way to put money aside for long-term goals such as buying a home or paying for your child's education.
Types of investments and their benefits
At the armature stage of investing, make sure you do it in a way that optimises your return on investment (ROI). Women have the added pressure of balancing work and home responsibilities. As a consequence, they may find it difficult to review their portfolio on a daily or weekly basis.
Some women, on the other hand, may desire to be more involved in the management of their portfolios. Since no two investment portfolios are alike, it's critical to keep track of how much time you have available, as it will influence your investing choices.
The following investment choices are available to women:
1) Flexi deposits with a fixed rate
Being well-prepared instils confidence in you. In an emergency, most women have no idea where to access emergency savings or insurance information. While it is critical to protect your family's finances, you should also secure your emergency fund. Maintain a six-month emergency fund in a Flexi fixed deposit that you can readily access. Bank deposits come with the added advantage of being able to borrow up to 90% of the value of the fixed deposit in a short-term loan. Keep in mind that, although Flexi deposits are great for short-term investments, they are useless for financial goals beyond three years.
2) Super additional health insurance
Super additional health insurance is purchased in addition to regular health insurance. Having appropriate health insurance coverage is critical. Do not rely only on the benefits provided by your company. Also, consider purchasing additional health insurance. Given the high cost of treating serious illnesses, a health insurance policy of Rs 15-20 lakh is recommended (which may also be purchased as a family floater). Super top-up plans are a less expensive way of getting health insurance.
A super top-up provides low-cost health coverage in return for a co-payment from you. So, if you had a Rs 10 lakh policy with rupess one lakh deductible, you'd have to pay the first lakh in claims each year (cumulatively) and the insurance company would cover the rest.
3) National pension programme with an active equity option
Women's attitudes on retirement have changed throughout time. These days, early retirement is the norm and it is about following your interests and checking things off your bucket list. Investing in traditional vehicles, such as employee provident funds or public provident funds, would not help you build the necessary corpus. You might use a mix of EPF and NPS to reduce the risk.
The National Pension Scheme's active equity option, a low-cost retirement savings vehicle, might be used to finance the equity component. The NPS is a great method to save for retirement since it encourages you to make consistent annual contributions, and the funds are locked in until you reach the age of 60, allowing your money to compound actively. An active equity option is suggested because it offers a high degree of equity exposure throughout the investment term, improving overall performance.
4) Index funds, flex caps, and midcaps are all options
Women despise losses and avoid investing in equities. Traditional investments, on the other hand, do not outperform inflation and, as a result, do not grow in value. Financial dreams are quite important. However, most people lack the necessary means to invest in their financial goals. You'll need to invest in equities at least 30-40% of the time if you want to achieve your long-term goals.
However, picking companies to invest in might be difficult. In such a scenario, consider one of India's 4000 publicly traded companies. By allowing the fund management to evaluate the companies, you may make better use of your time and money by investing in mutual funds.
Long-term risk-adjusted returns in the index, Flexi cap, and midcap equity funds have been consistent, and a combination of these products will provide enough diversity.
5) Gold
Gold is one of the finest investment possibilities for Indian women as it gives outstanding security in times of uncertainty. It's a low-risk investment that might provide a steady stream of income. Women can get gold coins from banks and authorised vendors. They can earn a lot of money in the markets if gold prices rise. Gold coins can also be used to make jewellery or traded for cash. Investing in gold may help a woman overcome financial difficulties during periods of high inflation.
Conclusion
At first, investing may seem time-consuming, but when you understand it, there is no going back. As a woman, you can invest wisely, logically, and successfully. This will enable you to achieve your financial objectives and guide you down a road of progress and opportunity. Asking for guidance is one of the best things you can do when you're having trouble deciding how to invest. There are no foolish questions, and the doubts you're experiencing today are likely to be the same ones others had when they first started.
(Sucheta Mahapatra, MD, Branch International-- a personal finance app)
