Feeds:
Posts
Comments

Posts Tagged ‘contingency’

Your money matters – Simple steps to take charge of your money matters

1In today’s world, women are equal to men in most ways. Women have achieved high accolades and are doing very well in modern Indian, sometimes even better than their male counterparts!

However, when it comes to financial planning for their family, most times they take the back seat, leaving the details for the husband to handle. Financial planners are unanimous in saying that when it comes to making investment decisions, women rarely take an initiative. A study commissioned by DSP BlackRock Investment Managers Pvt. Ltd and conducted by global research agency Nielsen across 14 cities in India in July 2013, found that only 23% of working women make their own investment decisions.The reason often is that the complexity of products and the mathematics involved in financial planning makes it seem puzzling.

However, women should take control of their finances. Here’s what the empowered women should do when it comes to financial planning for herself and her family.

Create Self Awareness and Get Involved:The first step would be to involve oneself and start discussing these aspects actively with family. Women face different changes in life which affects their finances – be it marriage, child birth, divorce or death of spouse. If you are a single mother, the financial responsibility of raising a child needs to be planned. If you are just married, understanding the outlook of the spouse and jointly planning the future finances should be a top priority. Therefore, it is important to increase the financial awareness when all is well and to be prepared for adversities. Things to do:

  • Read articles / blogs / personal finance books
  • Discussing and take active interest along with spouse
  • Take the help of a financial planner or advisor
  • Attending personal finance sessions

Take advantage of various incentives provided for women:Both the private and public sector institutions provide financial incentives for women, most of which go under the radar. (1) Banks offer customized savings accounts with cash backs and rewards for women who spend using bank’s debit card on shopping, food, etc. Some banks also offer discounts on medical tests required by women like thyroid tests, etc. To save for their kid’s education, mothers can open a ‘Junior/Kid Account’ with the waiver of monthly account balance requirement if it is linked to a Recurring Deposit (RD) Account or a Systematic Investment Plan (SIP). (2) While buying an insurance policy, women receive a benefit on the premium paid as compared to their male counterparts. Traditionally, women pay less premium than men for the same sum insured when it comes to buying a life insurance policy. (3) Many banks offer lower interest rates on home loans if a woman is applying for it or if she is the first applicant for a joint loan. The same goes for car loans too. (4) Some state governments provide certain exemptions with respect to stamp duty and transfer duty in case of sale deeds, conveyance deeds and gift deeds if the property is in the name of a woman.

  • Learn and know the available benefits available for women when buying products / availing loans

Cover Risk and Contingency:All the planning you do could be ruined in case of any emergency. Therefore, contingency planning comes before any investment planning. Such contingencies could be risk to life, health, hospitalisation or any unforseen emergency which may require her to step in financially. If you are a working couple or a single earning member family with a loan, having adequate life insurance ensures that dependants will not have to compromise on their finances in the income earner’s In regards to health, various medical research reports say that women live longer and may have more health issues compared to men. Therefore the need for health cover for women.

  • Have a contingency fund for your family
  • Understand and create enough life cover and health coverfor spouse and you

 Plan for Retirement/ Sabbaticals: For you, retirement can either mean retiring at the end of your working age, usually 60; or when you have children and decide to not work anymore. Various studies show that as women usually live much longer than men, therefore they may outlive their spouses. So, in order to have a secure retirement, it is essential to plan for it well in advance. Factors such as inflation, lifestyle, providing for dependants need to be synced together efficiently.

  • Understand the funds that you may need in retirement (with spouse and without spouse) and invest towards it
  • In case of sabbatical / pause in work, understand the income loss you may face from such a decision and work towards providing a buffer for it

 Investing: While women are known to be great savers, saving in itself becomes futile if savings are not deployed to grow. Women need to get involved in such aspects and contribute actively. Working women should also understand these nuances rather than letting the husband or father decide about her money and investments.

  • Involve yourself in investment decisions, slowly and steadily, to grow confidence and understanding of the subject

 Legacy Planning:– In case of wills, the voice for women to register their own wills is growing louder. Now, more than ever, women have assets in their names which if left without proper will/nominations, can inadvertently end up in the hands of a person for whom the asset was not envisaged. Women may also inherit their parents’ assets. Even in the case of the husband’s will, the wife needs to be informed of the existence and details of such a w Dealing with the loss of a loved one is challenging but can become easy if there is awareness and the lady of the family is prepared and informed.

  • Understand and be part of the will making process

 

From the above, you would have gathered how important it is for women to get started on money awareness. Getting women to manage money requires a mindset shift and the above steps, we hope, will give you some pointers on how to start managing your money matters. After all it is your money and it matters.

Read Full Post »

“Seek not greater wealth, but simpler pleasure; not higher fortune, but deeper felicity.”

It will be 100 years next year since the return of Mohandas Karamchand Gandhi from South Africa, and the start of the freedom movement in India. Whilst the story of his Experiments with Truth is well known, a lot of his principles have great value today in everyday life, and also when applied to your investment portfolio. Here are few of our favorites:

Faith & Patience: According to Gandhiji, one should have complete faith in himself in order to achieve something in life. Faith is also largely associated with patience. He famously said –  ‘If patience is worth anything, it must endure to the end of time. And a living faith will last in the midst of the blackest storm.’ For someone investing in equities, patience is the key. Stock markets are not a place where one should enter to make quick money, but should stay invested for the long term to get the best out of it.

Learning from your errors: “Freedom is not worth having if it does not include the freedom to make mistakes.” – M K Gandhi.So if you are doing something, in all possibility you will fail or make mistakes. But the beauty of mistakes is that we get to learn from them. While investing also you will make mistakes, you will take wrong decisions, but without getting discouraged about your past fallacies you should follow a properly laid down path of action and reach your goals. Seek professional help if necessary and learn from your mistakes.

Discipline: Discipline is a virtue which applies everywhere and in all streams. If you are following a disciplined investment strategy, you would not only be able to achieve your goals but also be able to experience what is called financial well being for you and your family.

Live as if you were to die tomorrow: We live in a world where everything is uncertain. Therefore, making provisions for unforeseen events is a necessity. Plan for contingencies, have a will, and always ensure that you have enough insurance so that you and your loved ones are not left in the lurch due to a serious illness or in your absence.

Live in the present: It is often observed that we ponder too much about our past losses and worry about our future. Trials and tribulations are a part of our lives. Instead of cursing your past and losing sleep over your future, you should invest for a better future by clearly articulating your goals and then working towards them, so that you lead a serene financial life.

Adhere to your values: There might be many instances when an investor is tempted by greed of short term returns or fear of the unknown. Targeted Asset Allocation should be the guiding light for all your investment related decisions as it is arrived at after optimizing an investor’s risk tolerance, goals and investment time frame.

Rebalancing is the Key: One of Gandhiji’s quotes goes – ‘It is Ego we cannot forgo. But what ego does is parts us from our own selves, our loved ones.’ It is a deviation from what we should be doing. Similarly, when our portfolio deviates from its original desired level of target asset allocation, we should make requisite changes. We should rebalance the portfolio at regular intervals and make it adhere to its values.

Some of these values and principles are applicable and guide us in all walks of life. Same is the case with Gandhiji’s principles, simple yet applicable to each and every thing. Follow these simple principles to lead a more efficient and fulfilling financial life.

Happiness is when what you think, what you say and what you do are in harmony.

 

 

 

Read Full Post »

%d bloggers like this: