Ladies, Make Some Smart Investment Decisions In The New Year!

Posted: January 5, 2018

Investments have always been a male-dominated area. Time to change that. Here are some tips for a woman to make smart investment decisions!

Since the beginning, men have been earning and handling their own money. But for women, it traditionally began with managing their family budget. But if men can handle their financial decisions, so can women. It’s heartening to see and hear about adult women who had never done this showing interest in the world of finance and investment, and learning to make better money decisions. This is more so as the percentage of working women rises.

Yes it’s true, it all about the money. The more money is there, the more the problems in handling the money well increase. Let us explore some ways to make smart investment decisions.

So when a variety of opinions and options are available, what should we consider or listen to? Before answering this question, let’s understand the need & related queries about investment to choose a favorable option available as per one’s convenience to enable us to make smart investment decisions.

Factors to be considered for smart investment decisions

Investment <=> Returns

Investing itself lays the emphasis on getting something in return. For instance, if one is investing his/her time in studies, it is important to get good results. It is the same with investment.

Time factor

Consider before investing, the time till you get your returns by selecting short-term securities or long-term securities.

Expectations

What are your expectations from investment? Tax saving, insurance, investing for growing your money, WHAT?

Type of returns

While investing what are your choice and type of earnings? How do you want to receive them – stocks, dividend with variable interest rates, cash returns, etc.

Your portfolio

Do consider about holding your investments in a portfolio, as it becomes beneficial to invest in several types of securities. It’s all the game of differing interest rates and variable returns from it. So, when the conditions are favorable, one can make a selling to get a return on the basis of a diversified portfolio, as it covers many options.

Risk capacity

At least, think about appropriate measures of risk involved. So as to earn good returns, you should be willing to take a risk; the desired risk can give back expected reward.

Tax benefits

Nowadays, people are keen on investing in instruments which could give them tax benefits. Some of the securities are also exempt from state and local taxes.

So, how do you decide?

One of your major tasks, beginning with where to explore for investment opportunities, is to find out a leading financial advisor who could give the best suggestions. This includes where to invest, which stocks could give higher returns, how to build up your investment portfolio, and also understand more in detail about smart investment decisions. Do consider the financial advisor on the basis of his past work & education, and moreover a licensed one. To check about license and related procedure, contact the state securities regulator for further information.

As a woman, what should I know?

Girls or women often tend to underestimate themselves, stating that ‘investment and understanding money is not their cup of tea’, as these matters have traditionally been handled by the men of the house. But the field of finance is everyday moving towards convenience of handling money, and more and more women are earning their own, so it makes sense that today’s woman learns to make smart financial decisions for herself instead of depending on men.

Before heading towards something new, I want to have better knowledge of all facts and circumstances. I would like to know more about my options. Women who have been already handling their own money would know about making smart financial decisions, but for the beginners and amateurs, there’s a lot to inquire about, and more convenient options are brought up for bringing up the most beneficial outcome.

So ladies, Take charge of your finances, because investment isn’t a one-time game. For different necessities, there are different solutions.

For women, there are different options depending upon their stage of life.

I am a single homemaker/working woman in my twenties

In the 20s, girls can begin their savings, maybe for further education, future house, marriage, or simply for their own future benefit. The 20s are the best time to decide upon your investments, as it is easier taking risks at this stage since there are no dependants.

Possible choices

Ideal choice is always Bank’s fixed deposit as it provides you with surety of return.

Another arising popular choice is becoming of Fixed Maturity Plans i.e, FMPs, which starts working within new fund offer period and

  • (a) Its returns are indicative.
  • (b) Its dividend, along with growth value, depicts taxation and is more tax efficient than FDs.
  • (c) Sometimes FMPs are not in liquidity state.

Liquid mutual funds could be a good choice because they deal in short-term instruments and are not tied up for a long time period/lock-in period.

I am an older single/married working woman

Living your life on two-duos, definitely at some stance of life creates havoc, but as a strong woman, she manages households and workspace, well. But between these tasks, there’s not enough time to make smart financial decisions. It is advisable to invest in lower risk instruments, and a guideline from a financial planner is better in these situations. A working woman has two worries to considered:

  • For her children if she has any
  • For her retirement

Possible choices

The better option to invest for working women in a more secure setting is a Public Provident Fund (PPF) account, as it can be started with a minimum investment of Rs.500, and it gives assured returns. The advantage of keeping funds in PPF a/c is that the total process is held by the government with no taxation problems, and along with a tenure of 15 years.

For retirement planning, it is favorable to invest in National Pension Scheme, which could start itself during the work life with a lump sum amount, and you could renew annuity to get regular income after being retired.

By taking out time, considering a financial advisor’s guideline, women can also seek out for investing in Corporate Fixed Deposits (FDs). It is if you want to make investments as an FD in a company. It gives you higher returns than investing as usual in bank FDs. Do check out for credentials of a company you’re going to invest in, and also look at its re-payment record.

Equity and Debt funds can also make a higher yield promising an assured return.

Another option is bullion, where one could invest in gold, silver and other precious metals. Do check upon the price hikes to obtain a favorable return.

I am a homemaker

Being a homemaker is the role of the major care-taker for family. Since a homemaker has no source of income, she is kind of dependent on another person for managing finances. But if she is able to manage the family budget, why can’t her saved money make more money?

Possible choices

One of the most convenient options is to invest the savings into a Hybrid Bank Account, which works as a savings account, investment account, and also offering a line of credit for its credit worthy customers.

Another option is about Gold Mutual Funds, with minimum investment, and about investing in gold fund for physical gold, one can also buy pure gold at a lower cost, one could also invest in stocks of gold companies, while being fully informed.

I am a single woman who is widowed/divorced/single parent

It is up to a woman now to earn and take care of all things, including dealing with children and fulfilling their wants. This time, a woman can’t take a chance to deal with any investment opportunity exposed to large risks. Take help from a financial planner, and work on your finances to make smart investment decisions for your future goals.

Possible choices

Same as a married and working women, good choices would be to invest in Public Provident Fund and get your retirement assured through the National Pension Scheme, indeed a type of mutual fund with a low cost.

Savings Funds in case any emergency occurs, and investing it into a liquid fund to ensure returns when needed.

Investing in Savings Bonds as no interest will be accrued even on maturity.

One can also invest in ‘Trusts’. It can be a good option, even for her old parents to be taken care of later. Medicaid Disability Trust is an example of it, a type of trust run by a non profit organization. But before signing up with someone for a trust, don’t forget to consider its legitimacy.

So make your smart investment decisions today!

Well, the initial stage of getting involved in investments seems messy, as does dealing with each single element considering assets. Ultimately, it becomes important to stay in touch, by tracking your investments at end of the month, to ensure its performance.

Be calm and I am sure, every woman can do this with diligence and tactful sense.

Image source: shutterstock

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An MBA Post Graduate, An avid researcher, A curious knowledge seeker and founder of Artizone.

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