It is extremely important for women to talk about money and do their own financial planning. Could you use this lockdown to brush up on money matters and investment basics? Why not. Financial independence and investing will help us prepare better for contingencies like the one caused by coronavirus. SheThePeople conducted an FB Live Session on WoMoneyKiBaat: Importance of preparing for emergencies in partnership with Aditya Birla Sun Life Mutual Fund. The session was moderated by SheThePeople founder Shaili Chopra who talked to Kanupriya Agarwal, founder of Powai Women Networking, Molly Kapoor, Head of Marketing, Aditya Birla Sun Life Asset Management and the standup comedian, Devanshi Shah.
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Brush Up on Investment Basics
Learn to know your money better. Explore books on investing or start a conversation with a friend or advisor about how to start investing smarter. Kanupriya, who leads a women centred group of working moms, says use the break judiciously. “This was quite unexpected, I don’t think any sort of planning was enough at this point of time. However, one thing which is good right now is the fact that the expenses have also come down. Nobody is really going out and spending. So ultimately whatever savings they have, people are able to manage because of the cut down in expenses. Use the time to learn” she says.
“I have started thinking of my money only in this break, when the corona crisis hit,” admits Devanshi. She is thinking of investing in a way that at least a third of her money is saved for emergencies. She says that nobody should sit idle so that “once we hit the road, we have enough to keep going.”
Importance of Financial Planning
Molly Kapoor says, “As a thumb rule, we keep educating everybody around the importance of asset allocation, having the right allocation for savings, for contingencies and for wealth creation. People who have done this are in a better place right now. We don’t anticipate emergencies, they just happen.” We can never plan enough for them. So what kind of investments should one look at? “For example, life insurance, health insurance, asset allocation and mutual funds, preserving wealth, we definitely keep talking about them, but very few people actually do this.”
Molly for herself follows the rule of allocating one-third of her income to each: 1) wealth creation 2) wealth preservation and 3) income generation. She suggests SIP for asset allocation since “it gives a discipline of investment, irrespective of the market cycle”, and it can be started with a minimal amounts.
- So you don’t really have to be a working woman to invest? No. One can start as a homemaker, office goers, single moms, college students and more.
- Investments don’t need too much money to start. You can begin from 500 to 50,000 and more depending on your income
- Only people with regular income can investment? No, you may have chunky income or irregular income just as many freelancers do. Investment can be in regular intervals or in small lump-sum amounts.
How will the coronavirus affect investment?
Devanshi makes a point. The situation we’re in seems so unreal that, “people will start investing better and also, maybe start spending lesser because we’re all out there just spending on what we want, now at this time, we’re spending less, we’re consuming less.” This habit will help in the post-corona world, for sure and now that people know something so serious can happen they’ll be investing more for such emergencies.
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Millennials and Investments
The millennial generation prefers to spend on experiences and travel more than on assets. The shared economy has got many to drop a fixed asset life. Devanshi says coronavirus may change that about millennials. “In the post-corona world, everybody is going to especially save up for their health because suddenly tests are expensive. This calamity is a realization to work on making at least some things permanent.”
Women and Money
For women who are not earning money, Kapoor affirms, “You can’t earn, that’s okay. But can you help whoever is earning in your family to manage the money better? This can be done by understanding different avenues about investments, helping with paperwork, keeping a tab on your investments on a regular basis, having conversations in the house about money, so, it’s not always about earning and then being able to invest.”
Homemakers must invest too. She adds, “Inherently, women are very budget-conscious, they are very prudent in terms of managing the household budget that’s because they’ve done it forever.” Quoting a study, she mentions, “Men look for profits when they are investing while women look for value when they’re investing.” The value approach is definitely more holistic and validates the ability of women as potential investors. It’s better thus, to take joint decisions so as to combine profits with value. The women should have access to money and the shift from individual power over it to playing a combined role would come naturally.
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Saavriti is an intern with SheThePeople