“Being the founder of a start up is like permanently being on a treadmill. #justsaying #startuplife #bhaagmilkhabhaag,” tweeted Priti Rathi Gupta recently. She should know, as Priti is the founder of LXME (pronounced Lakshmi), touted as India’s first financial planning platform for women. A Harvard Business School alumnus who has also done a Post Graduate Programme in Family Managed Business from SP Jain Institute of Management and Research, Priti aims to break the popular stereotype that women can’t manage and grow their own money, with the help of her start-up LXME. Ahead of Women’s Day, we caught up with the entrepreneur who chose to take the plunge in an industry which is still mostly dominated by men. Here are edited excerpts:
Why a financial platform just for women?
So, I have been in the financial services space for two decades. And one of the glaring discrepancies to me is that very few working women take financial decisions. Each time I spoke to them about it, even after understanding everything, they would say okay I am going to speak to my husband/father/brother and come back. What really bothered me is that as women we need to manage our money even more because we earn lesser than men in the same roles, we take more career breaks and live longer than men. So, we have to start investing. Putting all your money in banks or fixed deposits is not going to beat inflation.
I think we make better money managers than men because we are very disciplined and goal oriented, which is a great way to invest. Even Warren Buffet’s tagline is ‘invest like women’. Why are existing financial platforms not able to reach out to women? The reason is that women build trust much differently. A woman will say ‘I will watch it and when I build trust I will put money’. The world calls us risk averse, but I think we are risk aware. Our time to build trust is more than men and therefore you need a platform which helps you build that trust. A platform where there are a lot of women who are discussing about investing money. I don’t think the world of financial services has the patience. So, they never bothered to give that time and effort to reach out to women.
Things to keep in mind while investing for someone who has just started earning…
Start early. The earlier you start, the richer you will get because when you start young, you can take more risks. It’s okay to begin small. There are enough investment instruments which allow you to do that. Look at investing by way of diversification or asset allocation. Don’t put all your eggs in one basket.
Start understanding different asset classes. Every person should invest a certain amount in equities at least for the long term because it will give you returns that will help you beat inflation.
Investing is a personal journey. Invest according to your goal – your finances, savings, life stage, etc.
Where should women invest…
Invest in different asset classes – some portion into fixed deposit, PPF, EPF, NSS etc. Invest some into equity – equity mutual funds, stocks or shares, about 5-10% in gold. Today you should invest in electronic gold, so maybe gold bonds or gold savings schemes.
Make sure you have taken a risk cover. Take an insurance. Women in India are very under insured when it comes to health insurance. At any point of time, you should have a good health cover. You don’t want a big health expense to dent your investment.
Ensure you have a ‘me’ account -- an investment for your own financial goals. Life is very unpredictable. A lot of us when we get married it’s fair to do joint investment. But it’s also important to put aside a certain amount for yourself.
Your wealth creation tips for women...
The principle of wealth creation is that make sure that the returns that you get from your investment are beating inflation – not the government figures of inflation but inflation for people like us – when we are going out to dine or buying luxury goods like electronics, furniture, education for children –we take that into account, average inflation is 9-10%. So, the return of all the money you put together should be at least above 10%, otherwise you are actually losing money. Therefore, I said diversification. Wealth creation is very simple. Do an asset allocation between equity, debt and gold and you are set.
Obstacles you faced while starting LXME…
A large part of investors of LXME understood why we need to do it. When I spoke about this in Harvard where I was studying, pretty much all the men stood up and asked why do you need a separate platform for women. But about the 25 women who were there said ‘Wonderful, I wish we had something like this in our country’. So the men will always ask why. It’s like the film Gunjan Saxena -- there is no existing toilet for women because women were never there. But as more and more women join the workforce, the number of single women in urban areas increase, there is a need for a platform where women can come and discuss money. You address all the things women need – building trust, finding a peer-to-peer conversation. We have a community called ‘Being LXME’ where women come and discuss everything about money. They are not afraid of being judged. There will be men who will ask why a platform for women but I think increasingly now world over it is being recognized that you need to cater to this segment with a different platform with different product offerings. Your value proposition has to be different than the existing platforms, otherwise why have they not been able to reach out?
Your personal financial planning is…
I am not a very active investor. I invest 80% of my money in mutual fund – a large portion of it is in equity mutual fund and gold sovereign bond and 20% of it is direct equity which is shares etc. I have a simple investment policy and it has worked for me. I am not taking undue risks. For me that is the way of investing where you are not losing your sleep over where you put your money.
Tips for late starters…
The time to start is now. When you even put Rs 500, you will have to learn about investing. Begin small and start learning and keep growing your investment amount.