How to Manage Your Finances Effectively in 2023 as a Female Investor?
Women’s Day celebrates the spirit of feminism and upholds the principle of gender equality and equity around the globe. Breaking the rigid cultural, political and socio-economical confines imposed upon them, women have embraced all the challenges gracefully and risen above them, proving their mettle.
However, merely proving yourself once is not enough. Doing so again and again would develop a strong foundation not only for your own self, and your current generation but also for the generations to come.
Can this be accomplished through knowledge and network alone? No; because the power of wealth is required to bring any idea to fruition successfully. It is the power of well-managed finances that acquires and uses the right resources, explores the right opportunities to one’s benefit and nurtures the right talent, at the right time.
Money matters a lot, collectively for all nations, for all societies and for all women as citizens. It matters more for you as an individual, to secure you against the vagaries of life and to realize your dreams about a beautiful future. So, on this joyous occasion of Women’s Day 2023; let’s explore how you can manage your finances effectively as a female investor.
Tips and Strategies to Become a Smart Female Investor in 2023
The first important thing that all female investors must consider is their personal goals, preferences and life circumstances. Even male investors have to consider these before making any investment decision. But these have a greater bearing on the earnings, savings and investments planned by women.
In Indian society, men have a fairly straightforward career path and growth as compared to women. Events such as weddings, and childbirth do not impact the professional life of a man as much as they do for a woman. Hence, savings and investment strategies for women must be flexible enough to accommodate such changes.
After defining their life goals clearly, women must accord them a priority based on their tenure. Accordingly, the investment allocation can be worked out, funding the goals with shorter duration out of investments generating stable returns with less risk and vice-versa. This goal tenure and investment type matching is very crucial for the success of your investment strategy.
In the end, the financial plan for a woman must provide aggressively for the emergencies of life as well as investment in her own upskilling. These two are very important as the earning potential and career growth for women are hampered because of the breaks owing to personal life. Upskilling and sufficient emergency funds would ensure that the quality of her life is maintained even during personal emergencies and getting back to the workforce becomes easier.
Asset Categories and Allocation to Explore as a Smart Female Investor in 2023
After devising the investment strategy, asset allocation to the individual goals is the next important step. Before the asset categories can be explored, a smart investment strategy for women must set aside funds for a minimum of 6 months of living costs as emergency funds.
Buying a comprehensive medical cover comes next to setting up an emergency fund. Also, a smart debt management plan has to be incorporated, limiting the raising of debt to only important causes and factoring in a timely repayment schedule before committing to investment goals, thus improving the credit score and reducing the cost of debt.
Funding long-term goals such as retirement planning and children’s education having a tenure of more than 10 years require adopting investment instruments such as National Pension System (NPS), PPF (Public Provident Fund), multi-cap mutual funds and blue chip i.e. large-cap mutual funds. This combination provides the benefits of diversification, stability and aggressive market-related growth to the overall portfolio.
Short and long-term debt instruments such as liquid funds, gilt funds, government bonds and investment grade (AAA credit rating) corporate bonds are yet another avenue to fund your mid-term goals such as putting up the down payment of a house or higher education of your teenage children. Though the return may be low as compared to equity, the security of the capital and stability of return are the essential features that make these instruments suitable for funding a mid-term goal or obligation materializing in 3 to 5 years.
You must also explore specific, women centric savings instruments or schemes such as Sukanya Samriddhi Yojana which was launched in the year 2015 and Mahila Samman Savings Certificate which has been announced for two-years period in the Union Budget of 2023. Sukanya Samriddhi Yojana, with a maturity tenure of 21 years, yields return @7.6% and is an excellent avenue to save for the higher education or wedding of your daughter. Similarly, under Mahila Samman Saving Certificate, you may invest up to INR 2 lakhs for 2 years @7.5% p.a.; thus allocating those funds for any short to mid-term investment objective such as a down payment of your house or funding your start-up.
Some other investments may also be considered for aggressive returns on one hand and gaining a hedge against inflation on the other. Investment in gold through Sovereign Gold Bonds (SGBs) or Gold ETFs serves the latter purpose while Alternative Investment Funds, Leave Investing and Green Bonds may be considered for the former.
To lead a peaceful, confident and prosperous life where you have the liberty to invest your time and energy for the goals that you desire the most needs a smart execution of a well-placed investment strategy. You would have the roadmap ahead with the above-mentioned tips to get started on the path of turning your dreams into a reality.