Wednesday, April 20, 2011

Women – Start Investing Now!!!

Every home in India revolves around the Lady of the house. Be it the Mother or the Wife, either of these two women run our houses and to a major extent influence our lives. Women of India are multi-faceted and extremely talented. They are good at running houses, raising children, handling stress, as managers, as software engineers and what not. All that being said, the women of India are not so good at Investing.

Am sorry to have said that, but the grave truth is the fact that, Women in India do not bother much about investments or savings. They leave it to their husband or son or father, the man in their life to worry about those aspects. Though this is a nice approach, I personally feel that the women of today must come out of their shells and start investing and saving money for their future. The purpose of this article is to help them do just that.

Before I begin, if you are reading this article, do share this with your lady friends/colleagues/cousins because they too need to understand a few things about Investments and start saving money for their future.

So, let’s get started!!!

How are Women Different from Men?

Apart from the obvious physical differences between Men & Women, there are a lot of major differences between the two sexes. Some are:

 Most men earn money uninterruptedly throughout their lives (until retirement of course) whereas Women are forced to take breaks here and there
 Men are considered the chief income earners of the family and women don't bother much about the quantum of money they earn or save because the man of the house is there to worry about it
 Women have so many other responsibilities like running the house, taking care of the kids, taking care of their parents/in-laws etc that they tend to oversee or ignore the investment or saving money aspect of life
 Family and Children have a far higher priority in a woman’s life than it does for men.
 The list is endless and if I start listing it out, one blog wouldn't be sufficient. So let me stop with these differences alone and add an etc to the list to wrap it up.
 Etc…

Do Women need to Invest?

Most Men might think like this: When I am there to earn money and Invest it for my family’s future, why should my wife bother too much about it?

Many women might think like this: Investment is a mans job. He needs to worry about it. I have more pressing duties like raising my children or taking care of the home.

If you are one among the thousands who think like what I mentioned above, you need to revisit your thinking. Women Do need to Invest and save for their future. Investment is not a Mans Job and Women too can and must invest.

Why should women Invest?

The life of a Woman in India is a lot different when compared to the western countries. A majority of the ladies in our country are house-wives or home makers and do not have any steady source of income. Even the ones that earn face many challenges. Some are:

 Having to take a break from work for a year or so for child-birth and maternity
 Having to take a break from work to join the husband who might be employed overseas
 Having to relocate to a different city to join the husband who is employed in that city or got transferred to a different city – thereby sacrificing their current job and career

Most working women face a daunting prospect of having to sacrifice their careers and income in order to maintain a balance in their married/personal lives.

Every family today wants to provide the best possible education for their children, the best possible life-style for themselves and their parents/children and an extra bit of income from the wife is an added advantage. And if the woman is forced to compromise on her career or income because of any of the above mentioned reasons, her investments or savings can help her supplement her families income.

Apart from this, the average life expectancy of women in India is significantly higher than that of Men. So, she must have a solid corpus to support her in the unfortunate event of her husband not being alive to support her financially later in her life. Statistics show that, on an average, women live five years longer than men, earn 25% less during their life time and work 11 years less in their careers.

So, the point is – Women should Invest and do it regularly.

A Real-Time Example:

Lets say, lady X is currently employed and is earning Rs. 50,000/- per month but she has taken maternity leave and is planning to stay home for one year. Subsequently her husband gets an abroad opportunity and she accompanies him in order to stay with him and her family, she extends her break by lets say 4 more years. So in all, she has taken a 5 year break.

If we assume that she would have earned the same Rs. 6 lakhs every year, the family would have lost 24 lakhs of money that she could have earned (I have just considered the time she spent jobless while abroad with her husband. The time spent on maternity cant be equated with money as it is priceless…) assuming she would have got an average of 10% increment every year – the total amount the family lost sums up to nearly 28 lakhs. That is a lot of money. This 28 lakhs could have been used to:

 Fund her sons education abroad or
 Pay the initial payment on the family’s new home
 Be a corpus that can be used for her daughters wedding
 Pay for a new Car for the family and so on…

Apart from this, when she comes back to India at the end of 5 years of break, she might not get the same kind of job with the same kind of income.

Now, imagine how good it would have been, if she had invested at least 15-20% of her income for the 3 or 4 years of her career before she took this long break, the money would have grown and she would have had at least 8 to 10 lakhs of money that she can utilize for her family. Though this is not as much as the 28 lakhs, 10 lakhs is still a lot of money.

Now, do you realize how important it is for Women to Invest and Save Money?

If this article has instigated your urge to start investing or suggest your wife/daughter/friend to do the same, I would consider the purpose of writing this article served.

And – if you have been a regular reader of my blog, you are sure to know that I am not someone who will leave a topic half finished. As a continuation to this chapter, I will be writing the next chapter about how women can invest and what instruments she can choose and how to structure her investment portfolio.

Happy Investing Ladies!!!

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