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Investment for Women: First Step to Financial Independence

For years we have heard that the hand that rocks the cradle can also rule the world- be it housekeeping, socializing, business related or even investing. The new age woman is now more and more interested in understanding investment and its gamut of products that can help them take the first step towards financial independence. The first step would ideally be to begin by asking the right question and in this case what is the best investment avenue would be ideal.

Planning investment in advance, figuring out what is the best investment option, and setting the time period – all these are crucial steps to financial independence. Determining all these parameters, especially what is the best investment option for you, depends on various factors including your age. Let’s take a look at the different options suitable for different age groups of women and what is the best investment for them accordingly.

For women in their 20s

A penny saved is a penny earned and the sooner you start, the better it is! Your 20s are usually the time when you choose your career path and start working towards it. Sticking your money in a savings account at a minimal interest is getting old now. But investing could actually help you create more wealth. The number of investment options can overwhelm you and finding the answer to what is the best investment can seem daunting. So what is the best investment in your 20s? For long-term goals, you could start by investing in Equity Mutual Funds. Mutual Funds are suitable for those with a medium to high risk appetite and hedging or high-frequency trading would be ideal for people who can bear higher risks because the returns would also be very favourable. Since you are just starting out and the money to spare for investments may not be so high, you could always start small, regulate your investments and take it from there.

For women in their 30s

In India, by the time you are in your 30s you could have a stable job but you could also have started a family and have the additional responsibility of family and kids. Your focus shifts from simply creating wealth to saving up for upcoming expenses. Your goals will probably include a house, a vehicle and of course, setting up your child’s education and future. Ideally you should be able to set aside an amount after accounting for your expenses, to try high frequency trading or get help from investment managers for professionally managing your finances. If you’re already invested in Mutual Fund SIPs, in your 30s you could increase the periodic investment amount and even focus on getting assistance from professional investment portfolio managers.

For women in their 40s

Your 40s are the years when you start planning for your child’s higher education. Although, there’s no age bar for investing in gold, your 40s would be a good time to start (better late than never, right?). If you are inclined towards earning higher returns and have already set aside some cash then it would be ideal to take help from professional portfolio managers and carry out high-frequency trading or start investment in equities. If you happen to fall in a high-income bracket professionally then you need to find out what is the best investment that can help you plan your taxes while saving for the future. Tax-saving investment schemes include Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), and Employees’ Provident Fund (EPF). Pick the one which suits your needs best!

For women in their 50s and above

Most of us put off certain dreams for the retirement period. When you hit the 50s, it’s time to plan the big world tour you’ve always dreamed of or work towards achieving your other such goals. Inflation also impacts your savings and so it also makes sense to shift from riskier avenues to the safer bets. You could consider Debt or Hybrid Mutual funds or hire professional investment managers to handle your portfolio for you. But before that, make sure you have different income sources and save up enough to be able to bear risks in your investments and aim for higher returns.

Gone are those days when the task of finance and investment management was presumably for the male members of the family. Women are naturally intuitive, likelier to be goal-oriented planners, more patient than men, and less likelier to jump head-on into riskier investments. These inherent qualities can help women to become the masters of investing. If you’re not familiar with the financial jargons or the basics of the investment world, start there.

Plot your short-term and long-term investment goals, the money you can spare for investing and your risk profile according to your liking. Then move on to figuring out what is the best investment option for you. You’ll soon be one step closer to financial independence. A very famous new-age song mentions boldly, ‘Who runs the world? Girls!’ and we actually couldn’t agree more!