Women today are equal to men in all walks of life. When it comes to financial planning for attaining financial freedom, they are no different. In the present age, there is greater opportunity for women when it comes to investing.
With the rise of digital investment apps and more, women are empowered to manage their money more effectively. Today, women can invest in various assets such as equity funds, liquid funds, real estate, bonds and more.
Financial planners believe that women have specific financial needs. For example, there is a high probability that a working woman may want to take a break from employment during the pre and post-pregnancy period. During such times, she can remain financially independent if she has a financial plan in place to help tide over the temporary break.
Here is how you, as a woman, can invest smartly for the various stages in your life.
Investing in your 20s
At this stage, you could consider growth assets, such as equities. The twenties is an ideal time to begin investing, as you may have fewer responsibilities, and importantly, the power of compounding at this stage can work wonders for your future.
You can start by apportioning some money from your salary to invest in mutual funds online. For instance, you can invest through a SIP to help multiply your money in the long run. Having a medical insurance cover at this age is also an excellent idea as the premiums are relatively affordable. Plus, you can invest in tax-saving schemes such as Public Provident Fund and balance your portfolio with a mix of debt and equity.
The next stage in your life could have additional responsibilities, with a family needs and hence, your priorities may be reshuffled. You may want to look at buying a home or assist your spouse in paying home EMIs. You may also want to consider a life insurance term plan for the whole family. Look at saving at least 40% of your income through smart investments.
Once you reach your 50s, retirement must become part of your financial planning. Since risk tolerance levels at this stage could be far lower than in the 20s, it makes sense to reduce your stakes in equity mutual funds and replace them with SIPs in bonds.
You can invest in debt or hybrid schemes based on your risk appetite to enjoy the benefits of mutual funds. You can also consider tax-saving options such as Equity Linked Savings Scheme to save up to Rs.1.5 lakhs under Section 80C of the Income Tax Act.
Since you started investing at an early age, your equity corpus built over the years can help you enjoy the best days of your life.
Thus, it is essential to include inflation-beating investment instruments such as mutual funds in your financial plans to create wealth in the long run. The earlier you start investing, the better mutual fund benefits you can enjoy.