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The phenomenon called ‘female financial paradox’

Yet many women lag behind men when it comes to using assets to plan and build financial security....


Women are a growing economic force and expected to add about $6 trillion in earned income globally over next five years according to the research by the Boston Consulting Group. Yet many women lag behind men when it comes to using those assets to plan and build financial security.
This phenomenon is termed as “the female financial paradox”.
In Delhi, many women see financial planning as a way to protect themselves against the unexpected.
The problem with concentrating savings in lower risk assets like cash is that money will not grow fast enough to help fund retirement and other long-term goals. One area where women need help is to learn — how and where to invest.
However, the stock market and women still seem poles apart. Why does financial literacy and stock market appear so dull on the women front?

A strong financial market with broad participation is essential for a developed economy.
India’s household savings, being one of the highest in the world, can be channelised through equities, bonds and other instruments to achieve greater financial inclusion and improve financial markets in India.
Even in the Capital, awareness about investment avenues is limited.
When asked about where they invest, women from different income groups spelt out their preferences.
Asha Devi (32) is a housemaid who makes around Rs.7,000 per month.
“I save around Rs.2,000 per month at home since I don’t have the requisite documents to open a bank account. I end up using these savings for unexpected expenses like medical treatment of my children and family functions.”
Megha Gupta (26) works with an airline and earns approximately Rs.17,000.
“I started investing in Public Provident Fund (PPF) two years ago so that I have more money when I decide to expand my family. I also have a provident fund account with my company. I prefer to invest for the long term, as need for money will be much more in the future.”
Neha Vijay (22), an employee with another airline, takes home almost Rs.32,000 per month.
“I currently have no savings. I end up spending my entire salary to meet the rising cost of a decent lifestyle in aviation industry. I understand the importance of saving. I think recurring deposits are a good investment avenue as they serve both short term and long term needs.”
Priti Garg (42) is a businesswoman who takes home Rs.12 lakh per annum.
“I invest in real estate and gold in order to accumulate wealth for my children. I also have three LIC policies with my husband as the nominee in all. I believe in having long-term investments as short term needs can be met through my earnings.”
Rekha Gupta (43) is another businesswoman who makes around Rs.30 lakh per annum.
“I prefer short-term investment in savings account so as to meet any emergency. I have also invested in real estate and gold for my children. When it comes to insurance, I had several LIC policies with my husband as the nominee, but most of them have already been encashed.”
Most working women in Delhi, cutting across their economic status, noted that they want to save for the future with minimum risk.
In India, they insist, it is important for women to understand their tolerance of risk and then find an appropriate allocation for their portfolio.
I manage to save around Rs.2,000 per month. I keep my savings at home since I don’t have the requisite documents to open a bank account. I end up using these savings for unexpected expenses like medical treatment of my children, etc.”
Asha Devi
The 32-year-old is a housemaid who makes around Rs.7,000 per month
I started investing in PPF two years ago so that I have extra money when I decide to expand my family. I also have a provident fund account with my company. I prefer to invest for the long term, as need for money will be much more in the future.”
Megha Gupta
The 26-year-old airline employee earns approximately Rs.17,000 per month
I currently have no savings. I end up spending my entire salary to meet the rising cost of a decent lifestyle. However, I understand the importance of saving. I think recurring deposits are a good way to save for both short term and long term needs.”
Neha Vijay
The 22-year-old airline employee takes home almost Rs.32,000 per month
I invest in real estate and gold in order to save for my children’s future. I also have three LIC policies. I make long term investments as short term needs can be met through my earnings.”
Priti Garg
The 42-year-old businesswoman earns Rs. 1 lakh per month.

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