Most of my money management skills comes from my mother. Growing up in a middle-class joint family that had a modest income – and more dependents than earners – money was rather limited to begin with.
Yet, it was perhaps this exact situation that brought out the best of my mother’s management abilities. With a determination that I’ve almost always seen only in mothers, she had a focus to save for the education of her children – so that they can have a better life in the future.
My mother was a star student & a gold medalist in MSc. Psychology. When my parents got married, she became a full-time housewife – partly a reflection of the times & the societal outlook then. Each month, she was given a modest budget to manage the entire household expenses, which included pretty much everything from groceries to our school fees. And boy, did she manage it well!
She recycled old things in imaginative ways to avoid spending on new purchases. Most spends were done only after a thorough cost-benefit analysis. And all expenses were tracked daily in her handwritten accounts “diary”.
Also back then, we barely realised the sacrifices she’d regularly make. From walking that extra mile to save on bus tickets to limiting the amount she spent on herself, my mother saved small amounts so that she could spend it on us. A random chocolate to cheer us up. New clothes for our birthdays. Or that new Backstreet Boys cassette (shoutout to all the 90s kids :p). My brother and I always knew we didn’t have much – but somehow we always felt that we had enough, mainly thanks to her.
And despite all this, she not only managed to save diligently, but also add a bit more to it each month. In fact, her savings have helped our family get out of many financial jams over the years. Heck, that’s even the reason why my brother & I had some money when we became adults. Mamma would keep aside majority (50-80%) of the cash gifts we received during our birthdays or festivals like Diwali, Holi, etc.
And then she’d regularly invest these all our combined savings (keeping very good accounts of how much belongs to whom!). She’d invest some of this in gold, some in FDs, and some in NSCs. But never equities/stocks.
After growing up & coming across many of the “If you had put X in Infosys/Nifty 20 years ago, then today you’d have 1,000X)” type articles, I wondered why she had not. I often wished that she had invested this amount in at least Nifty-50 (if not in stocks like Reliance or Infosys). If only she had, then we’d be multi-millionaires already..
Why U No Equities, Maa?
So some time back, after I’d been working in the financial markets for few years, I finally asked my mother the question – why had she not invested some of her/our savings in the stock market? Her answer was fairly instant & quite simple:
“I didn’t know much about stocks – but from whatever I had heard/read, it seemed risky. And I didn’t want to risk losing any money that we had painfully saved over the years.”
In my head, I instantly wanted to tell her that long-term stock investing isn’t that risky at all. But the very next second, I realised that equity markets in her times was different indeed:
- There was limited awareness and resources to learn
- Diversified investment options – like mutual funds, ETFs, or smallcases – weren’t available/common back then
- The stock market was not only more volatile, it was also less regulated and even “operator-driven” to a good extent
Investing in single-stocks for a housewife like her – with limited resources & time – would’ve indeed been a crazy proposition in the 90s/2000s. One that had higher chances of going wrong than being rewarding. And one that certainly would’ve caused many panic-stricken & desperate moments.
The Times, Are They A-Changin’?
Times have changed. Today, there is a lot more awareness & financial education is freely available. Equity investments have also become safer & diversified in the form of mutual funds, ETFs, smallcases, etc. Thanks to technology, investing has also become a lot more accessible to the rich & poor alike.
Unfortunately, the equity markets still see little participation from the ladies – not just in India, but all across the globe. A Sep 2019 study of Australian women highlighted that the top 3 issues women experience when it comes to equity investing are:
- Fear of losing money: 48% women avoid investing in equities for this reason
- Lack of trusted advice: Not knowing who to trust is another common issue, experienced by about 55% women
- Lack of knowledge: About 50% stay away because the don’t know how to invest or how to get started
While these results are from Australia, I’d imagine that similar difficulties are also experienced by a large majority of Indian women. Societal pressures & expectations of various forms don’t help either. Personally, I’d love to see this change radically & quickly, and have more women invest in equity markets.
If she had the right resources and investment options, my mother could’ve easily reached her saving/investment goals faster with equities. The child in me would’ve loved that for her – and the investment professional in me realises that it’s now possible for women like her to actually achieve that.
So dear ladies, do you relate to any/all of the above reasons? What is stopping you from investing in equities? And if you managed to take the plunge, what gave you the push? And do you have any advice insights for those who find themselves unable to take the plunge? Tweet your thoughts to me @vikasbardia, as I’d love to hear your story & investment journey! #LadyInvestor
A word of caution: I’ve recently seen many “women-only” investment platforms come up, which claim to offer investment products that meet women’s needs in particular. Please note, that all investment products are created to suit a certain risk profile – and not a particular gender. Now as I mentioned, it’s true that women tend to have certain traits & unique situations which lead to a different risk profile than men – and a good advisor/platform will try and understand that in order to help you better achieve your investment goals. But the basic concepts of investing will remain the same for you, as it will for me, which are:
- Low-cost: the more you save on fees, the more you get in returns. Keep in mind what you’re paying (e.g. if choosing mutual funds, go for Direct plans vs. Regular plans)
- Diversification: your portfolio needs to be diversified, so that your risk is minimised
- Long-term: equity markets can be volatile in the short-run, so the more time you give yourself to meet your investment goals, the more likely you will be able to achieve them
Happy Women’s Day! And happy investing!
PS: Gentlemen, how about you share this story with the ladies in your life and do your small bit in bringing more women to the equity markets & achieve their financial (and life) goals?