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Personal Finance

And you thought women can’t handle finances?

Brindha Rao Financial Planning, Finwise Woman, Personal Finance 2 Comments

Looking out at the azure sky with your morning cup of coffee, watering the ferns, listening to the wind chimes softly sing their song and smiling to yourself.

 

This is the dream my retired life is made of. A white picket fence is welcome too.

 

When you about to think how clichéd that sounds, let me tell you it is possible.  The prime factors for the  said situation being good health  –  physical, emotional and financial.

This image is for representative purposes only

 

How did I come up with this, you may ask. Meet Mrs. M, in her 80s, who I would like to call a Finwise Woman. I had the opportunity to meet with her some months back and interview her for this piece.  As I walked into her spacious and well decorated apartment, I couldn’t help wondering if I had entered the wrong house.  A confident mother, who brought up her kids all alone, who worked hard through her prime years, who is today proud that her children are well settled, who has excellent knowledge in the finance and investments world, who is seasoned in the trading market, Mrs. M is an inspiration to every one of us.

 

When life upset her with the sudden demise of her husband in her late 40’s, she picked up the pieces and decided to stare right back at the challenges ahead. She started out as a financial advisor for mutual funds, insurance, ULIP etc. as taking up a full-time job meant she would be away from her young kids, moved to be near her family and started re-building her life. From ground zero.

 

Often having heard and observed her family members who were stock market savvy, she began to invest small amounts in stocks. She managed her finances well and gave the best possible education to her children, and saved wisely.

 

Today she is financially independent, manages her home and investment portfolio, which is so good it can give any financial planner a run for their money! As I chatted with her over tea, I realised it was not just her courage that stood by her all through, it was also her willingness to learn under any circumstance , the confidence to rise above the challenges and her wisdom and forethought in planning.

 

This interview was so much better than any other luncheon meetings I have been to. I returned home with a head full of inspiration, a heart full of admiration and a story to write about.

 

Here’s to the Finwise woman in her. And in you.

 

This article is written by Brindha Rao, our guest writer. I would also like to thank an unnamed family friend, whose image has been used, with permission. She is an equally good candidate for being a Finwise Woman, being a savvy and financially independent woman in her own right.

 

Finwise is a personal finance solutions firm that helps people plan for their financial goals, follow their passions and achieve financial independence. If you wish to consult us, please reach me at prathiba.girish@finwise.in or 9870702277.

Six urgent personal finance actions you must take as a woman!

Prathiba Girish Financial Planning, Personal Finance 2 Comments

six actins
1) Invest don’t save
While most people use both words interchangeably there is a world of difference between the two. We women are considered to be very good savers. That is, we do put away a part of our income for a rainy day very effectively. When it comes to Investing which is ensuring that the money put away is fetching us appropriate returns that are commensurate with risk taken we fall woefully short. One of the main reasons for the same is extreme risk averseness and lack of interest in finances, which we don’t consider our domain. There are a lot of resources available for you to explore different options before you invest do take complete advantage of the same
2) Indulge your love for gold.
The very thought of gold brings a sparkle to most of us. Indulge in gold it can be a very good hedge against currency. Ensure gold forms 5 to 10 % of your portfolio. Investing in the right form is very important. The making charges a, wastage etc. levied on jewelry does not make it a desirable choice. Consider gold coins and better still gold ETF. Invest in gold on an ongoing basis and avoid buying them during Akshaya Tritya and Dhanteras and such other auspicious occasions where the gold price is at its highest.
3) Befriend Equities
Investing in equities is no rocket science. When you are investing for the long terms there are very few asset classes which can match the returns given by equity. Learning the basics of investing in equities is an absolute must. If you find it too cumbersome to invest directly choose the mutual fund route. If you need to take advice on which funds to invest in, take advice of a professional who is not motivated by the commission he/she receives from the mutual fund company but has your best interest at heart. If this means you need to shell out a fee for the advice don’t scrounge, it will stand you in good stead
4) Take an health insurance
This is something you absolutely must do, with spiraling costs of hospitalization being left with no health insurance is not an option any of us can afford. I would go a step further and say take a personal insurance even if you and your family are covered by your/spouses employers. This will cover you when you/spouse are in between jobs. Further when you decide to take insurance at the time of your retirement you may not be insurable due to pre-existing illnesses and will be deprived of the facility when you need it the most. Look at a pure term life insurance if you contribute substantially towards the expenses and definitely opt for a critical illness cover.
5) Ensure you have a will in place
No matter how young you are it is critical to have a will. Accidents and unforeseen sickness is not something which you read about in papers and happens to unknown people any more. You would be surprised and shocked to know the laws applicable to women who die intestate. Making a will gives you peace of mind and costs you very little (anywhere between 7500 and 15000 depending on the complexity). You live all your life catering to every whim and fancy of your child would you like to leave them in a lurch in case of an unfortunate unseen event such as loss of both parents? Make sure you give a serious thought to who should be their guardians in such a scenario. Ensure your nominations and bequeaths are in line with each other. Get your spouse to make a will too.
6) Don’t put all your money into your business (this point is specific to self employed women)
List your goals and ensure you have a plan to achieve them. When you invest all your surplus into your business, which by the way has a never ending thirst for funds you may create a good company and net worth but you may not have the liquidity which you need. Once you have listed your goals start setting aside some money for your goals and don’t dip into it unless it’s a matter of life and death.
If you can juggle a family and business/job all by yourself this is fairly simple and straight forward. Wear the personal finance hat, believe me it is very liberating! Go for it now!

Shopping for consumer electronics? Here’s how to save 5% of your purchase cost over and above the best price offered to you!!

Prathiba Girish Personal Finance , , 0 Comment

home-appliances (1)As a Financial Planner or a prudent investor one would be very reluctant to take on debt, it’s the right approach in a majority of the cases. But imagine if you have accumulated the amount required for a big ticket purchase and when you land up to buy it, somebody offers you an interest free loan!  Should you grab it? Or continue as planned and pay upfront for your purchase?

I suggest grab the offer with both hands, provided there are no hidden charges and the processing fee is really small, like in the case of Bajaj Finserve. You have an opportunity to earn 8- 8.5% p.a. while paying 0% interest on the borrowed sum!  What could be better!

Let me explain further on the thought process behind writing this article. A dear friend of mine who is setting up home wanted me to accompany her to help decide on the brand, model, etc.   Once we were done with the nitty gritty of picking the model, the person at the cash counter asked her if she would like to avail of interest free EMI. She being a prudent person said no without checking the offer. With great skepticism I asked about the offer and was amazed to find that the offer was indeed interest free and included a small processing fee which was negligible given that she was buying goods worth two lakhs. The icing on the cake was the process was very simple with very basic documentation.

I suggested that she invest her corpus in liquid funds, and withdraw each month, from the liquid fund to pay for her EMI. I explained that investing in liquid funds (a type of debt mutual fund) is very simple with a Dmat account and you could invest  your surplus even for 2 or 3 days, and earn interest on it. Further, when you want to withdraw the funds you can do so at the press of a button and the funds hit your bank account the next working day. She saw merit in my recommendation and opted for the EMI, parking her funds as suggested. On a purchase of Rs.200,000 she would end up earning Rs12,000 post tax in a period of 2 years!