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Why don't women in India invest?

By Shrestha Saha

19th Aug 2022

4 mins read

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‘Tu rehne de na hum karlenge’

A very widely heard sentence in India, but the situations where they are heard are different for men and women. For example, men hear this when they do any household work, and women when they want to invest their own money.

Now you might say, not all women hear such a statement. But, considering the deep-rooted patriarchal society of India, they are the lucky ones. Why? Because standing in the second decade of the 21st century, many women still have to hear and abide by such comments. Educated independent women listen to statements like ‘tumhara bhai kar toh raha hai invest, tumhe karne ki zaroorat hai?’

It doesn’t take rocket science to understand that the percentage of women investors in the country is less. (Actually, less is an understatement when the stats are as follows. )

For every 100 equal income-earning men & women in India, a man is 5x more likely to invest money than a woman.

The pay gap might have decreased, but the investment gap hasn't. Investing is still considered a man’s job, and cooking a woman’s.

She might be managing the household and earning a handsome amount of money, but it’s thought she wouldn’t be able to manage her finances. ‘Le paaogi tum itna risk?’ Moreover, her risk appetite is questioned when she wants to invest, not when she is willing to risk her career for her family's well-being.

Such doubts about her confidence have led to ‘68% of women being confident about managing their household budget, but only 19% are optimistic about their investment planning.’

As an organisation working towards building a nation that invests regularly, we were shocked to see the stats and the truth behind it.

Just like a nation cannot prosper if half of its population is left behind, it cannot be an investing pro nation if we resist the better savers from investing.

So, our first step towards resolving the problem is acknowledging it through our campaign #YesSheCan. ( Watch it here)

If the video has nudged you enough to invest, here’s a to-do list for you!

Recognise the goal of your investment.

The most important question you must ask yourself before making investment choices is, "What am I hoping to achieve?" For example, your investment decisions will be vastly different if you save for a pension versus a deposit for a house. So, ask yourself the following questions: "Will this investment allows me to purchase my dream car sooner? Will it enable me to pay for college without relying on my parents?"

Determining your risk tolerance

If you are a female child and want to begin investing, you will listen to comments like ‘Kitne paise kama rahi ho ki ab dubana bhi hai?’. Yes, these comments are discouraging. They'll

It’s no news that investment comes with its share of risk. And every individual’s risk tolerance is different.  That’s why it’s essential to assess your own.

The amount of risk you are open to taking determines your risk tolerance. If you're staying up at night worrying about your stock portfolios and suspecting that your portfolio will fall too down if the market tanks a bit, you're probably carrying too many possible losses in your portfolio.

If you're concerned about missing out on potential earnings, your portfolio may be too conservative. So, to properly assess your risk tolerance, answer the following questions:

  • How does the word "risk"  sound to you when investing?
  • Do you have a mental image of the "rush" of investing?
  • Do you think it's a good investment?
  • Do you believe that risk is just a necessary element of the investing process?

Consider your behavioural traits, like what you are more likely to do if you've suffered a substantial investment loss or what decisions you've made in the past when markets worsened.

How can you reduce investment risk?

Diversifying your investment opportunities is the key to lowering risk. It will help you diversify your portfolio by investing in stocks, debt instruments, real estate and cash. All these investments react differently to the changes in the economy.

If you don’t want to invest in an FD and are a first-time investor in the securities market, check out Spenny Wise. We are sure you will love it. It provides

  • Lower risk than a SIP
  • 10% stable returns
  • Guaranteed return of principal
  • Only seven days of lock-in
  • Daily interest credit

What else do you need to grow your confidence about investments? To be honest, it’s a great product to have in your portfolio if you want to diversify.

What is the most important investing principle?

Most financial investments carry some level of risk. So, as an investor, you should first determine your risk tolerance before investing. Then, after you've kept your emergency funds aside, you can invest your remaining funds.

What should the ideal duration for investment be?

Generally, the longer you invest, the more risk your portfolio will be able to withstand because you have more opportunities to recover from a mistake.  Also, investing in something non-liquid (like real estate) may make sense if you're saving for retirement but are decades away from it.

Final word

These were the list of questions that we thought would help you begin your investment journey. To all aspiring investors (mainly female), everyone around you had incurred losses when they started. That's the way to begin. The day you begin investing is the day you start building your confidence for it too. For a simple, quick and hassle-free investment, visit Spenny. If you still have questions about investments, please feel free to mention them in the comments; we’d be happy to help you.

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Made with ❤️ in India