According to Oxfam India's discrimination report 2022, women face bias in recruitment and pay across the country. The average monthly earning for men engaged in everyday work was a mere Rs 9017 in 2020, 58 per cent higher than the Rs 5,709 their women counterparts earned. While this issue will come across to most as a common gender disparity, this also has financial implications.
The pay for women is much less than the men, but the cost of everything is the same. Women don't get privileges or discounts for being the fairer sex. They must take a maternity break when expecting a child. Moreover, they have to take care of their family, do all the household chores, and look after the senior citizens. Hence, they end up with little or no savings in most cases.
Also, since many women earn less than men, they become conservative with money and investments. Hence, they mostly bet on safe and secure assets which give lesser returns. And this often puts them in a financially weak position.
Women make many wrong financial decisions, like giving their entire salary to their husbands without considering it. They also do not often know how to plan their investments and where to invest to grow their money. Often, women also do not have a proper support system in place. Moreover, they quit their jobs at the drop of a hat, hence losing their financial independence.
Here are four investing mistakes that women tend to make and how to avoid them:
Not Investing In Growth Assets: Women tend to keep everything safe and available in case they need it in the near future or in case of any emergency. "This hampers the growth that their portfolio could have seen. Instead, they should keep maybe six to 12 months of expenses as available funds and invest the rest for growth if they don't foresee a need in the next five years," says Shweta Jain, financial planner, CEO and CEO founder of Investography, a financial planning firm.
Not Looking Beyond Physical Assets Like Gold And Property: These tend to be either too capital-intensive big investments or something they might not even sell them. In addition, these may not give them cash flow when needed. So, it might be a good idea that even if they want to invest in these asset classes, they choose gold exchange-traded funds (ETFs) or sovereign gold bonds (SGB) over physical gold and maybe even REITs instead of physical property.
Quitting Their Jobs: Women take a break and quit their jobs to care for their families. While taking care of one's family is good, this often leads to slow career growth or the end of one's career. When they take a break, even forced savings like provident fund stops. Many women stay in unhappy marriages because they have no one to fall back on financially. Hence, when they quit their jobs, ensuring it's only a short break, not the end of their career, is vital. Thanks to work-from-home options now, and flexible hours, women could now balance their home and work. However, only taking up part-time or freelance work could mean a pay cut.
Not Building Their Own Portfolio Or Assets: Women are not independent unless they have created their own investment portfolio and made considerable wealth. Women need to build their own assets too. They must ensure joint ownership with their husbands for all financial assets such as apartments, a house, or bank accounts. Women must also ensure they are included in the will of their husbands so that in case anything unfortunate happens to them, they can still live comfortably enough.
