International Women’s Day is just as good a day as any to provide strength to women and enable them to be the torchbearers of their own financial destiny. This can be done through proper planning, effective money management and thoughtful fund allocation.
Now, it is a given that investing appears to be a difficult task for most women, still it is important to acknowledge that with proper financial education and consistent reading sensible allocation of funds can be done. As perfectly stated by American author and journalist Clare Boothe Luce: “A woman’s best protection is a little money of her own.”
Here are a few essential steps for women to plan and allocate their funds:
Know your financial topography
Now before venturing into investment opportunities, have a careful look at your existing financial situation. Calculate your income, expenses, savings, and loans. Identify your financial objectives – purchasing a house, financing children’s education, retirement, or financial independence. Your investments must be according to your plans and risk appetite.
Entering into various investment channels
You must diversify your investments to handle risk and get maximum returns. You can plan a mix of asset classes based on their pros and cons. Some of the asset classes that can be looked at are:
- Equities: Equity investment may generate high returns but come with potential risks.
- Bonds: Bonds give lower returns but also carry lower risk than equities.
- Real estate: Property investment gives rental yield and long-term value appreciation.
- Gold: Gold is a hedge, a safe-haven asset class during economic unpredictability.
- Mutual funds: MF’s ensure diversification and expert management, ideal for beginners.
- Fixed deposits: A safe, popular investment with guaranteed returns.
Granting primacy to financial security
In the process of hunting for highest returns, never lose sight of safety. Make provisions for eventualities to take care of sudden expenditures like job loss, insurance or illness. Provide for keeping three to six months of expenses in a liquid account.
If you are new to asset allocation, it is likely best to speak with an expert from a financial advisor. They will assist you in developing a well-thought out investment strategy that meets needs and aspirations.
Continuous reading, learning and adjustments
The economic climate is ever evolving. Remain in alignment with market forces, investment offerings, and rules and regulations. From time to time, reassess and change your asset allocation plan as your situation evolves. Financial independence is a process, it is not something that can be achieved in a week but is something that is maintained over years.
Therefore, by following these simple steps, sensible women investors can save money, learn investing and achieve their long term goals.
Disclaimer: The information provided in this article is for educational and informational purposes only and should not be considered financial advice. Readers are encouraged to conduct their own research and consult a certified financial advisor before making any investment decisions.
