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Invest To Achieve Your Goals

Mere saving is not enough. Women also need to funnel savings into the right investments to meet their goals and secure their future

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With rising numbers of women entering the workforce, a growing majority are turning breadwinners. In the domestic arena, more single women are securing their families with additional income. Today many women are earning more than their spouses, and are increasingly making household financial decisions.

Not only that, women control a staggering amount of household wealth in India. Women running households have saved and collected, over many, many years, hundreds and thousands of rupees for a rainy day or for the future of their children. I have seen women exceptionally good at making these savings, both tiny and large. The stories that filled newspapers a few months ago, showed lakhs had been kept aside by women in cupboards and almirahs.

But I also observed, however, that women have not as easily embraced investing in mutual funds, as they have done savings. Only a very small percentage of women invest in MFs. While women worry about household expenses (and levels of household debt as nearly all women are averse to being indebted), primary breadwinners worry about not saving enough for their future. These "idle" savings are prone to lose value to inflation and hence the importance of prudent investing.

If saving sizeable sums from household budgets provides a good starting point, investing a small portion regularly in mutual funds through a Systematic Investment Plan (SIP) adds the finishing touch. It channelizes investments to meet one's goals and needs in the future. Most of all it helps build wealth and counter inflation.

No one is able to prepare a five-course meal all at once. It starts with learning the basics of a few dishes, then adding a dollop here, a scoop there, building on recipes, one (or a few) at a time. One day you have sufficient knowledge to take on the deep-preparation five-course. Likewise, investing is all about patiently learning the recipes.

One of the reasons for this lack of 'investment' attitude in women probably stems from the fact that investing in mutual funds may appear too complex. But that is not the case. Mutual funds in fact are one of the simplest investment products to understand and the most cost effective. Expert fund managers manage your investment and you can invest in many convenient ways. You just need to identify your future goals, start investing early and monitor your investments to ensure they meet the goals you have set. Besides, mutual fund investments can be structured easily to meet your goals for both the short and the long term. Over the years several Mutual Fund companies have taken up investor awareness programs and there is a lot of material available on their websites which you can go through to understand the basics of investing and make yourself invest ready in mutual funds.

For the young single working women, having a sizeable amount available for their marriage or buying a house is one of the major goals. Equity mutual funds is a great option if such goals are 5 - 10 years away.

Married working women have similar needs but different goals such as saving for their children's education or for a good retirement corpus to be financially independent. In this situation once again, they should consider long term SIP's that park a fixed sum in mutual funds for the long haul.

If you are closer to retirement, Systematic withdrawal plans (SWP's) in your funds help get regular payouts to meet monthly expenses even after you retire.

Simply put, there is a mutual fund option for everyone. Conservative investors can use Debt Funds, opting for relatively lower but stable returns, while pure Equity Funds which give a relatively higher return but is aggressive can suit women who are younger and can take a higher amount of risk in their portfolios. Balanced Funds with a mix of Debt and Equity is yet another option while Equity Linked Savings Schemes (ELSS) help you save tax and have a growth potential.

As women have proved that are good at saving, they can drive their own financial health. If you are still pondering about investments, don't hesitate to take financial advice. Some of the traits such as being conservative with money, buying when there is a discount, and saving regularly are invaluable traits of some of the world's the best investors. We women inherently know this. And this can be our secret to investing success.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Anuradha Rao

Anuradha Rao is CEO and MD of SBIFM

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