In an Indian household, discussing finances with a girl child is taboo. It is one of the most challenging things to do. I believe that the trend of not having such discussions will turn around when people realize we are in the twenty-first century and financial literacy is real, even for women. Although the excuses seem lame to me. Discussing money matters and investments is off the table as the entire family is sitting together after a tiring day, just doesn’t feel right to me.
The truth is more like either the parents have no idea about investments altogether because they think the mutual funds, stock market, real estate, and other investment vehicles are fatal, or they think it’s not important enough. Even the school system in India does not include personal finance in its syllabus. We end up not adopting the habit of saving money; even if we used to save money as children, we forget about it as we become older.
In the contemporary household, both the husband and wife bring in money, but somehow, the man oversees the majority of financial decision-making because, when it comes to finances, particularly investment, women have always taken a back seat.
While the widespread opinion, particularly among men, is that women do not know how and where to invest, women, too, are not optimistic in their very own monetary skills because of the lack of education and discussion, of course.
Women are considerably better at saving than men, but they are hesitant to invest since they don’t know where or how to begin. Although it’s a matter of debate, but, it is what it is!
So, the question that arises is, should women also try to learn more about investing and embrace these responsibilities? If you ask me, they absolutely should. Here’s why,
1. Women outperform men when it comes to generating profits:
According to several pieces of research, women’s portfolios outperform men’s. Women investors, for example, have achieved better returns than men every year from 2017 through 2020, according to a poll conducted by ET Money and published in March 2021. In fact, during the pandemic in 2020, they contributed 14 percent of the returns, compared to only 11 percent for men.
2. They are more likely to succeed as investors because of their nature:
Women may be able to outperform their male counterparts in terms of investment performance due to particular behavioral traits. Women are more risk cautious than men, trade less frequently, conduct more thorough research, are more disciplined, and are less overconfident. As a result, they tread carefully, investing more in mutual funds than stocks; they stay invested for the long haul without frequent transactions and changes; and they are conservative in their asset allocations, avoiding knee-jerk reactions or abrupt redemptions. Women outpaced men by 0.94% every year on average.
3. They have a higher chance of achieving their goals:
If the wife invests, the husband can be confident that all of their financial goals will be met because women not only invest with an outcome-based approach but also with a longer-term perspective. It means that, because they are focused on the financial goal rather than the excitement of investing, they invest in a way that allows them to meet their objectives within the time frame allotted.
Let’s keep the conversation going by outlining the basic to-dos. So here are some of my suggestions, for you.
- When a financial decision is being made, never accept a pessimistic or disapproving attitude.
- Address major financial decisions in a more private and comfortable environment.
- Start inculcating the habit of not making significant financial decisions on the spur of the moment in your family. Let everyone make evaluations and add new elements. Allow that conversation to continue for a while, a bit each day, before deciding.
- Prepare the groundwork for the principles. Don’t get caught up in petty disagreements. Make sure your income and spending are on the same page. Build a sense of responsibility and accountability in the home.
- Rather than interjecting with a buzzer attitude every time a spending choice is made, talk about your financial goals.
Written by: Arpita Chatterjee
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