Women have long been the backbone of households with efficient management of household finances. However, when it comes to investing, women have historically been underrepresented and underserved. They still face challenges when it comes to money matters, such as the gender pay gap and a lack of representation in the financial industry. By understanding the investment landscape and implementing smart strategies, such as investing in women health insurance, women can not only achieve their financial goals but also move towards a more secure future. In this article, we’ll explore some strategies that women can use to invest for both financial and health benefits.
Why should women invest?
It’s important to recognise that investing isn’t just about growing wealth but also taking control of expenses. Financial literacy and the importance of being financially independent are things that are crucial for the women of today. Investing wisely can help women to achieve financial liberty. However, the key to making wise decisions is grasping the fundamentals of investing. While most of us learn the basics of investing from our families, going beyond and exploring the multiple-available options is the need of the hour.
Things to keep in mind when you start investing
Before you start investing, there are certain points that need to be taken into consideration. Let’s understand them:
1. Chalk out your financial baseline:
Analysing your financial baseline is the first step while planning your investment. Analyse your monthly income and expenses. Find out what are your discretionary and non-discretionary outflows. This will help you to find out how much you can invest and which expenses you can cut down on.
2. Design a plan:
Once you have got a clear goal, it’s important to plan out your investments. If you need money for your short-term goals, you might opt for short-term investment plans, while long-term investments are well-suited for long-term objectives that require funds in about 10 or more years. Consider how much you’re planning to invest, how much risk you can take, etc. While high-risk investments like stocks, bonds, and mutual funds can provide you with higher returns, low-risk investments like fixed deposits and fixed benefit plans offer a sense of security and guaranteed returns.
3. Start early:
One of the best things you can do is to start your investment journey early. This will help you to save up a chunk of money over a period of time. It is important to note that you do not need a large sum of money to start an investment. Rather, you can start with a small amount and keep investing consistently over a period of time.
4. Make sure your risks are covered:
As a smart investor, you should have at least six months of your income in savings just to cover any uncertain emergencies. While having the right women health insurance is a great way to handle unforeseen medical expenses, keeping a separate emergency fund ensures that you are financially stable and secure against any type of mishaps.
5. Manage your taxes:
Taxes can eat a chunk of your annual earnings if not planned efficiently. While investing, if you choose to diversify your investments and opt for investment tools like tax-saving FDs, ELSS, ULIPs, life insurance plans, etc., they can help to potentially lower your tax liabilities. Apart from that, having health insurance policies can also help you to save on taxes in exchange for the premiums you pay. As per Section 80D of the Income Tax Act, you can claim tax deductions on the medical insurance premium you pay for yourself, your spouse, your children as well as your parents.
6. Take professional help:
If you’re just starting your investment journey, getting guidance from a professional can help you greatly in planning your investment. By assessing your risk tolerance, goals, and financial standing, the expert can help you to plan your investment roadmap.
7. Keep emotional biases at bay:
Investments come with risks. Thus there will be times when the market will be volatile, and you might lose your investments, and there will be positive times too. Don’t let greed or fear take over your emotions. Always calculate the risks and analyse investment tools through the lens of merit.
Investment Strategies
Here are some of the investment options to consider while planning to grow your money:
1. Mutual Funds:
Mutual funds can be an excellent investment option as they are managed by fund managers. With a wide range of mutual fund schemes available, you can choose one that aligns with your investment objective and risk tolerance level. You have the option to invest in a mutual fund through a lump sum or systematic investment plan (SIP). SIP could be a great choice if you want to generate substantial wealth over time with minimum losses and maximum returns on your investment.
2. Exchange Traded Funds:
ETFs are passive investment funds that replicate an underlying benchmark index, making them a suitable option for women investors for several reasons. Firstly, ETF returns match or exceed the benchmark index. Secondly, as ETF portfolios do not need active management, i.e., investors don’t need to monitor them continuously.
There are various types of ETFs available such as equity, bond, currency, and commodity ETFs. and buying and selling them through a Demat account is easy on the stock market.
3. Gold:
For Indian women investors, buying gold is a popular investment option. Banks and MMTC-authorised dealers sell certified gold coins in different denominations, such as 5 grams, 10 grams, and 20 grams.
While gold prices are not fixed, it is considered a rather safe long-term investment. As the price of gold rises, these coins can be exchanged for cash or jewellery as per your preference.
4. Investments with assured returns:
If security is your topmost priority in investment, PPF, FDs, and RDs are the best options. These are best for short as well as long-term investment goals and generate low to moderate returns on investment. The best part is that you can start your investment with as low as INR 500. These investment options can be ideal for women who do not wish to risk their hard-earned money.
5. Real estate:
Real estate is a major investment. It is a tangible asset that can provide both long-term appreciation and regular rental income. Additionally, real estate investments can offer a hedge against inflation and can be used as collateral for other investments or loans.
6. Government schemes:
Government schemes like PPF, NSC, etc., are risk-free and secure investment options that offer moderate to high returns on investment. Finance Minister Mrs Nirmala Sitharaman, in the Union Budget 2023, recently launched a women-centric scheme Mahila Samman Saving Certificate. This is a one-time scheme where women can invest up to INR 2 lakhs at a fixed rate of 7.5%. Such schemes are simple ways to help women save more and become financially independent.
Also Read: Job Responsibilities of a Cloud Engineer
Conclusion
Achieving financial independence and empowerment requires discipline, patience, and a willingness to make smart financial decisions. It’s important to develop good financial habits such as budgeting, saving, and investing wisely. By staying informed about financial matters and health insurance policies and staying focused on their goal, women can achieve financial well-being as well as enjoy good peace of mind.
Disclaimer: The above information regarding Investment Strategies for Women is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.