Come on ladies, invest smart

You’ve nipped that indulgence to spend and carefully crafted a savings habit. You’ve even deployed these savings into various investment avenues. But are you doing it right?

From our interactions with investors, young and old, there are a few common mistakes most women make. It’s never too late to do things right, so here’s giving you a heads up!

Most women love to hoard gold jewellery. Gold is also considered a safe investment in times of uncertainty, and men are equally willing to buy gold for their wives and daughters.

But if investment is your motive, hoarding gold in the form of jewellery is an absolute no-no.

This is because you may not make much profit on selling a piece of jewellery. When you first buy it, apart from paying for the gold itself, you also pay wastage and making charges.

The charge can be quite substantial. So in the total amount you’re ‘investing’, a good percentage of it goes into these charges and not the actual gold. When you later sell the piece, wastage charges are again deducted, reducing your net gain.

Moreover, if there are any precious stones studded into the piece, these are removed before calculating the weight of gold. So, what’s the smart way to invest in gold? Gold Exchange Traded Funds (ETF) or gold funds (mutual funds which invest in gold ETFs).

In these, your entire investment goes into gold with no ‘charges’ deducted. ETFs track the price of physical gold and are listed on stock exchanges, making it easy to buy and sell. In using the ETF or gold funds route, you can make even small investments.

While retirement may seem like light years away, it always helps to start saving early.

So how do you know what your savings should be decades from now, which will see you through your expenses comfortably?

For starters, look to online retirement planning calculators to get a rough idea of how much money you must have in your retirement fund .

These calculators will help you arrive at this number based on your use details such as your retirement age, current expenses, inflation rate and other sources of income.

Once you know how much you will require post-retirement, you can start planning and investing. While the exact portfolio will vary across women, depending on their needs, sources and stability of income, the thumb rule is to diversify.

Don’t put all your money in safe avenues or all of it in the risky stock market.

So, in the fixed-income part of your portfolio, give priority to provident funds and national savings certificates since they have the best returns, post-tax.

If you’ve reached the investment limits these have, move into fixed deposits of banks and then corporates. Invest in the National Pension Scheme too.

In equities, unless you have the time to actively track markets, use the mutual fund route only.

The younger you are, and the more stable your income source, the more risk you can take. So adjust portfolio allocation accordingly.

Take on a health insurance cover as early as possible, since premiums move higher with age.

With property prices on the rise, many young working women are tempted to buy a house early on in life, even if it means paying hefty EMIs every month, leaving little surplus. Buying property early may be suitable for those who are settled in their jobs and plan to stay put in a particular city. But take the case of a woman who has just started out on her career and plans to take a break some years down the line for whatever reason — further studies, marriage, and so on.

In her case, servicing a home loan can become a huge liability. Maintaining a property in a different location can also be tasking. Money that has been set apart for paying EMIs could have been used elsewhere.

So don’t buy a flat as soon as you get a job. Wait until you have a stable career and you are settled in a particular location.

Your salary at the start of your career may also be too low to get good properties and attractive financing.

Many a time, women are not aware of their husband’s investments. Such women are also likely to be dependent on their husbands for investing their own money too.

In such an event, if the husband passes away, the women may be left clueless as to what resources she has in hand.

It’s therefore important that women take interest and spend some time and effort in understanding where the family money is being invested.