Sunita (30), a middle-class Indian housewife, saves a certain amount of money every week from the household earnings in her money bag. At times, she invests part of this money in gold. She also attends monthly ‘kitty parties’ where she and her friends invest in a popular informal chit-fund saving concept. However, when it came to investing in formal avenues and accumulating large sum of wealth, Sunita would often depend on her husband to take the initiative. While Sunita is investing in the instruments that she is aware of such as gold and recurring deposits, there is a higher tendency for her to face larger issues post retirement as the wealth she is accumulating will not keep pace with the increasing rate of inflation.
On the contrary, Ashmita who is a 25-year-old working woman living in a metro city, has been pondering over the idea of investing in ULIPs for quite some time, but is confused whether she should meet an insurance advisor or start it online. While her parents almost convinced her to purchase ULIP through an agent, Ashmita came across a unit linked insurance plan where the company would also invest with her in her funds through premium boosters and additional allocations. Ashmita took the bold and wise decision of simply purchasing an online unit linked insurance plan.
Why was Sunita’s perspective different from Ashmita when it came to investments?
Lack of financial literacy often hinders women in Indian cities from actively investing their money systematically. In India, men are taught to be financially prudent from an early age because of their ‘responsibilities’ towards their parents, spouse and children. Conventional gender roles in the country define men as the bread-earners and women as the nurturers, even in progressive Indian households.
It is due to these reasons that most women in India still tend to take a backseat when it comes to actively investing. So to encourage woman towards investment here are some pointers:
Try to read about financial instruments and schemes available in the market. There are various wealth management apps, communities, personal finance workshops and courses available online free of cost. Educating yourself and asking questions is the only way to go about things.
One of the biggest mistakes women often make is ignoring insurance. Women may tend to have higher life expectancy but they also have greater incidence of lifestyle diseases. Most women tend to avoid term life insurance because they have a misconception about being the passive income earner and underestimate the power of their financial contribution to the family. As far as life insurance in India is concerned, the stereotypical narrative is that a husband will buy a life cover in order to ensure a better life for his wife and children after his demise. Thus, there is no need for the wife to get a life cover. However, life insurance is critical for ensuring financial security of the family. They also offer additional tax benefits on various schemes.
Grow your investments
While simpler instruments are great to begin early with, it is important to evolve your portfolio as you go along. Investment options like ULIPs and endowment plans may sound intimidating, but it is all a matter of knowledge and education. Once the understanding sets in, things become easy and the potential to make your money grow steadily increases exponentially. Various tools such as money management apps and tutorials to understand financial management are available online. Further, one can always go to a financial advisor for money related questions.
These small steps can certainly lead a woman to a secure future for her and her family.