Women control $20 trillion worth of wealth in the US
According to a report prepared by BMO Wealth Institute, women control close to $20 trillion of wealth in the US alone. The BMO report has identified 3 important things women need to do with the $20 trillion in their control.
- Women must understand what’s going on with their money to be truly secure and independent
- Women need to broadly focus on budgeting, cash flow management and planning for retirement
- Money gives various options to women and the ability to leverage these options only comes from awareness.
In India, most women leave financial decisions to their husbands, because the men turn out to be the earning members in many cases. But that is not the point. The lady of the family must get involved in the nitty-gritty of managing finances since it is the welfare of the family that is involved. There is a lot of lip service paid to the role of women on “International Women’s Day”. However, there is little by way of actual involvement in financial decisions that actually happens. Here is how things can change.
Any sales representative selling financial planning products must try and meet the client at the residence instead of the office and insist that the family be involved in the discussion. Most wealth managers make it a point to have the first meeting with the client’s family and also lay emphasis on involving the family in ongoing decisions. Above all, financial planners must ensure that women are involved in the financial planning process right from the setting of goals to the monitoring of the portfolio. That is where it must all begin.
Above all, women need to take the initiative to get involved
Women of the world unite (God I am sounding like Marx); you have nothing to lose but your own fetters. Here are seven things you can do get more involved in financial decisions.
- If you can manage a demanding boss, boisterous kids and juggle family and friends; it is most likely that you can manage money too. The secret is just to believe in yourself and be assured that you can manage money.
- Don’t start off trying to become Warren Buffett. Even Warren Buffett did not start out trying to become Warren Buffett. That is not the purpose. Start managing small amounts of money, take prudent investment decisions and watch money grow.
- Read up extensively on the subject. Thanks to the open source internet; there is a world of knowledge and you can get the best of resources with very reasonable subscriptions. Avoid the temptation of listening to analysts on media. You are the analyst.
- Idle money is opportunity wasted. We are not going to tell you that Rs10,000 invested in Wipro in 1980 would be worth Rs450cr today, although that is true. The idea is that you put your money to work and take a long term approach.
- Start planning for short range goals first. If you are planning to buy an apartment in five years, plan how you can save and grow the money sufficiently so that you don’t need to borrow for margin money. There is no rocket science; it is a lot simpler than that.
- Take help from a professional and bounce off ideas with family and friends. You never know where you may get a good and workable idea. Sit down with your financial advisor and understand the nuances of money.
- Finally, the proof of the pudding lies in the eating. Assess your performance on a regular basis and jot down where you think you went wrong. Then bounce off your thoughts with an investment expert to take control of your finances.
Financial freedom apart, here is an interesting anecdote that an old lady shared. Men are respected and recognized in this world for 3 attributes i.e. Knowledge, Wealth and Courage. Incidentally, all these 3 attributes are represented by the trinity of Indian Goddesses. The message to women on the International Women’s Day is clear. The next time someone says that managing finances is not your cup of tea; just remind them of this anecdote.