WHEN IT COMES TO INVESTING MONEY, ARE MEN AND WOMEN TRULY EQUAL?

Shweta is an ambitious and diligent 34-year-old working woman from Bangalore, India. She is married and manages 2 kids, 1 family, and a team of 8 people at work, all by herself. She is a delivery manager in a well-known IT company where she plans and develops the project idea, makes presentations, monitors project progress, sets deadlines, fixes bugs, ensures stakeholder satisfaction, evaluates performance, keeps up with tech trends, what food to make, and which math table her kid should memorize for the weekly test. Despite being capable and proactively involved in all the day-to-day activities, she misses one of the most important aspects of life, which is managing her money and finances.?

The Divide

Paytm the no-need-to-introduce fintech unicorn of India did a social experiment named ‘The Divide’ ahead of International Women’s Day in the year 2021. The ad was made to highlight the financial literacy gap between men and women involving 30 people of different ages and backgrounds. The participants of the experiment are asked to step forward for every 'yes' and to take a step back for every 'no'. From simple initial questions like if they learned how to ride a bicycle before the age of 10, the questions then focus on finances and money. It’s terrific how the end shows that the front line consists only of men, while all the women are behind.?

Watch the video for a better understanding.

Disturbing Numbers

33% of women in India do not invest at all, and the number is as high as 40% in the 21–25 age group. Overall, 55% of women in the country are either not investing or are unaware of their investments. Women have got good saving habits and attention to detail, two very important qualities for wealth creation, in their genes. It is a deadly combination, actually. Despite these innate strengths, essential for money management, many women end up just saving and not investing. And the majority of the ones who choose to invest, go for traditional options like gold jewelry and fixed deposits, 42% and 35% stating as their top choices respectively, not adequate enough to hedge against inflation and build to build wealth for themselves.?

India, the sixth-biggest equity market globally, ranks in the bottom quartile when it comes to female participation in the stock markets. While the investment arena in the world is male-dominated, the gender gap in India is wider,?with women making up just 21 out of 100 investors.?

You Are Not Alone

The above situation is not just true for Shweta but for many Indian working women professionals like her. Be it IT professionals, bankers, accountants, astronauts, doctors, chefs, or any other domain. The main reasons for women not investing money in stock markets are lack of time, proper financial knowledge, and the fear of losing their savings. Today, with technological advancements and more awareness in the field of finance, seeking professional help is just a matter of a few clicks.?

However, one of the major problems lies in the mindset of people. A lot of women fear seeking help and assistance when it comes to their savings. They are willing to pay making charges, and locker charges for gold jewelry; they will settle for peanut interest rates on bank deposits, but won’t pay a 2.5% to a money manager who can use his/ her expertise in the domain and make the equity investing process smoother. And the fault isn’t entirely theirs. It needs an empowered society to empower women to the level to be able to make wise and informed financial decisions by themselves and for themselves.

Seeing The Silver Line

The above facts and figures portray a terrific scenario for women like Shweta in investing. But women have broken the glass ceiling in all spheres of life, be it politics or education. Despite the economic downturn post the outbreak of COVID-19 leading to job losses and pay cuts, one of the positives to emerge was the increasing participation of women in equity investments. Women function as investors, not traders when it comes to stocks. Hence, many millennial women invested in fundamentally-strong stocks available at a massive discount during the lockdown.

Why Equities For Women?

Traditional options like gold jewelry and fixed deposits, as discussed above, are the most preferred investment choice for many women. However, such options do not generate more than 5% per annum in returns. The average inflation rate in India was 5.95% in the last decade. Also, do not forget, that FD interests and physical gold come with a tax burden. It means these financial vehicles are working in first gear, not properly aligned with your goal to reach the destination of wealth creation. Investing in these options is a sure-shot way of eroding your hard-earned money rather than creating it. On the contrary, if history is any proof, equity is the only asset class that has outperformed all its counterparts over the last 125 years.

Way Forward

“Teach her about how money really works, and she can change the world.” We are going well, but not better. The task is to bring more women like Shweta into the equity investing game. The easiest and safest way to go about the idea for Shweta will be to read and understand more about equity instruments and seek help from Sukhanidhi Investment Advisors for better clarity and planning of long-term financial goals.?

Wait no more, you powerful women of the country, and start your investing journey today. Because you can. Ditch all the fear, for it’s no rocket science.?

Happy Investing!

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Warm Regards,

The Financially Aware Women's Team at Sukhanidhi