Learn to invest wisely

How is investing for women different than men? Well, to start to with, studies show that women are generally better investors than men when it comes to compounding money over the long term. They’re more patient and are averse to taking undue risks.Recently, even in the Indian market, we are starting to see a change in this with more and more women starting to invest in mutual funds and other financial instruments. 

Ww have analysed that on average, women invest up to Rs 80,000 annually, which is much higher than the Rs 50,000 invested by men. Having said that, a recent report by Merrill Lynch states that the top barriers concerned for not investing are a whopping 60% due to lack of knowledge and 34% said they lack the confidence. So, let's address the elephant in the room. Knowledge.
The key to getting women more financially independent is to get started from an early age and educate them on financial planning.

There are many ways women can start investing and secure their finances. We know today that the stock markets give better returns than investing in a bank deposit or fixed deposit. There's definitely more risk in stocks but the dividends are also higher. Some are not built for that risk appetite and for them, mutual funds are an effective tool to get started on with very good returns on investment.

Mutual Funds are created when several people come together and wish to invest collectively. The risk and the earnings are distributed thereby making it relatively risk-free. Mutual Funds are lower in risk than the stock markets yet yield higher returns than a savings bank account and have given a consistent return of 12.5% for the past 10 years. Therefore, it is an option woman can actively pursue when aiming to be financially independent.

Here are some of my basic investment tips for women for a secure future:
Begin early, think long-term
Just like a recurring deposit or fixed deposit, the return on mutual funds is better when planned for the long-term. If commenced at an early stage, investing in mutual funds can give much higher returns, so much so that it is enough to cover life goals like marriage, home buying, education, world travel, etc.

Warren Buffett, one of the greatest value investors and world’s third richest talks about the benefits of compounding and investing early. The best way is to start with a Systematic Investment Plan (SIP) in a long-term mutual fund. This way you don’t have to keep a track of it regularly and get higher returns on investments.

Invest tiny bits every month
A lot of women turn their backs on the world of investing simply because of a perception that the financial world is complex, involves high risk and requires constant vigilance. However, it’s now possible to invest as little as Rs.100 for as little time as a month.Therefore, be it a college-going girl or a homemaker, if one manages to save even the tiniest bit and invest a fixed amount of money every month.

Blue chip funds are low-risk
If you are not willing to take too much risk, you could consider looking at blue-chip funds. A blue-chip mutual fund is composed of company stocks which are sound financially, have a record of strong financial performance and therefore, have less risk associated with them.

Set financial goals first
Most people want their money to grow because they either want to buy something or simply find better ways to re-invest that money. I would recommend setting targets in advance before beginning to invest.

Are you looking to buy a house in five years? Want a crore in the bank in 3 years? Whether you are an entrepreneur or working professional or homemaker, setting targets right at the beginning will help you in planning when it comes to understanding the expected return in comparison to the level of risk you can take.

Subscribe or follow an investment platform
Most women and men are afraid to invest because of their lack of financial literacy which is something that should be taught in our schools. In a country of over a billion people, only a few know the basics of the financial world and are some of the most successful people in making money.Therefore, there is a need to look up various online platforms where information is readily available and accessible.

Diversify diversify diversify
The world of investment is not just company stocks. Diversification makes sure that your money is safe and keeps growing across industries. You can also look to invest in commodities like gold, oil, copper, etc.In a nutshell, investing is the same for everyone. As a homemaker, women juggle with a lot of finances at home. In my opinion, women make the best investors and the best savers when it comes to all thing’s money.

So, start saving for yourself and invest today in preparation for any unforeseen emergencies. Read a lot and stay updated about the market to know more avenues than traditional FDs and PPFs.The author is the co-founder and COO, Groww

 -Harsh Jain