Women are nowadays financially independent
A large number of women asserted to have an invest-first mentality
It is said finances are not the woman’s best friend. The handling of money, managing savings and making investment decisions are widely considered to be a man’s job.
But, times are changing, and women are nowadays financially independent globally. More and more women are not only taking care of their own savings but also that of the household and the spouse. Women are actively participating in investment decisions by analyzing the various factors such as degree of risk associated with the investment, opinion of family members, friends and colleagues and their capability of investing in modern and innovative investment avenues.
In this article, I would discuss the investment behavior and patterns of women in detail.
- The life expectancy of women today is at an all-time high i.e., 69 years than men, 66 years, and about 90% of them eventually end up living on their own. Therefore women require sound financial health.
- A woman needs an extra 55 lakhs to manage her expenditures properly.
- With the increasing divorce rate, women are more likely to have dependents to take care of. For them, investment is a priority. It requires them to invest their savings wisely to earn a regular income.
- Only 33% of women make investment decisions independently as compared to 64% of men.
- Women, who make their own investment decisions, initially started with the encouragement by their husband (33%) or from their parents (24%).
- 13% of women said that they were forced to make their own investment decisions because of the death of their husbands or divorce.
- Only 30% of women made their own investment decisions because they themselves decided for that.
- Husbands (40%) play a significant role in introducing women to investing than their fathers (27%). Whereas 40% of men were introduced to investing by their father, followed by their colleagues (35%).
- Women are less willing to take risks like men. They can become comfortable making investment decisions involving different risk levels only by learning all about investment.
Key Findings on Investment Behavior of Women Professionals and comparing their investment behaviors with that of Men
What is the woman’s mentality in general? How they associate “money”?
A large number of women asserted to have an invest-first mentality. According to 39% of women (compared to 33% men), they planned investments first and only then adjusted monthly expenses accordingly. Men and women both associated the word money with necessity, a better life, fulfilling dreams, success and better health. However, a large proportion of married, working women without kids associated money with ‘power.’
What do women professionals prefer?
Working women mostly prefer safety and regular return on their investment. The women have different expectations from the investment depending on their nature, such as most of the women want capital appreciation, interest and long-term saving.
What are the goals of women professionals? Where do they differ from men?
The study found that the top goals are similar for both men and women. They include dream home, child’s education, child’s marriage, debt-free life and a high living standard.
Women are found slightly more inclined towards child-oriented goals like their education & marriage (34% & 29%) than men (31% & 26%).
Surprisingly women think of planning for a future child’s goals- education & marriage (22% & 23%) even while single. The figures were only 16% & 12% for single men.
However, fewer women (23% & 20%) aim to start their venture & plan for retirement than men (26% & 23%).
Why do most women professionals avoid investing in the stock market?
The lack of knowledge about the stock market and different investment options prevents women from investing in the share market. The insecurity and high volatility in the stock market are concerning issues for women investors. It also reflects in the low confidence of women for taking the decision.
What are the decisions that women dominate?
The study found that, while investing or buying a car or house, men dominate when it comes to decision making. Women, on the other hand, play a larger role while buying gold/jewelry, day to day household purchases and durables.
Only 12% of women said investing in market-based instruments (stocks, equity, MFs etc.) was 100% their decision compared to 31% men. On the other end, 28% of women said it was entirely their decision when buying gold/jewelry than only 17% of men.
What women think about a financial advisor?
When it comes to consulting someone to make investment decisions, only 42% of women (men at 46%) asked for a professional financial advisor. More than 40% of men and women said they were gender-neutral regarding financial advisors. However, the second-largest preference by both men (55%) and women (31%) was for male advisors.
When it came to female financial advisors, 19% of women (6 times more than men) preferred them than men.
Another key finding was that the educational qualification of a financial advisor was the top parameter considered while choosing a financial advisor among 47% of women. The same figure stood at 50% for men.
What do women think is the right age to start investing?
In a survey, a more significant number of women (76%) felt it was ideal if one started investing before 25 and 65% of respondents said they started investing even before they turned 25. They believed children should start making investment decisions at an early age- while in college or when they start working, and that children should be taught about investing before they turn 20.
Keeping the above facts in mind, it is required that specific and relevant information should be provided to women to ensure their proper decision making in investments. It can be done through various steps such as awareness programs and seminars or conducting an educational workshop to make them aware of the different investment avenues.
So, why not start from today itself!
That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.
(About Author: Arindom is a professional writer, editor, blogger and a member of the International Association of Professional Writers and Editors, New York. A management postgraduate in finance with extensive industry exposure, he is associated with many reputed global online magazines and publications as a regular contributor. He loves to help his readers writing highly informative and well-researched investment-related content to make informed decisions.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of organization)