Are you
Financially Aware?
Don’t be
dependent only on the men in your lives to manage your money.
Find out why and how
to upgrade your financial skills for a more secure future.
Women and money twirl in a curious tango. The woman pirouettes around moolah much like any rational, materialistic person. Yet, in a baffling bout of irrationality, she spins herself away from it, refusing to manage it herself. She lets the men in her life—husband, father or brother—take charge of her finances in a regressive display of reluctance. Why would an educated, working woman refuse to take control of her money? “It’s conditioning. For years, the society hasn’t allowed her to do it. She has been told that she doesn’t understand money and should stay away from it,” says financial planner Kartik Jhaveri. “Besides, finance is perceived by them as a very boring and difficult subject,” says Swati Kulkarni, executive vice-president, UTI Mutual Fund.
So, even though the income level of the urban Indian woman doubled during 2001-10 from 4,492 per month to 9,457 (according to a 2011 IMRB survey), financial literacy among women continues to be among the lowest in the world. India ranked 11th out of 14 countries, as per the Mastercard Financial Literacy Index 2011. This lack of awareness creates financial insecurity, which translates into a discernably disturbing social fallout—women suffer abuse, find themselves stranded if they are divorced or widowed, are cheated out of their rightful legacies, and are rabidly missold financial instruments.
The financial insecurity stems from two reasons. One, despite the fact that a lot of women handle their household finances, they depute the investment of money to their spouses. If they are working, they don’t regard themselves as primary providers and relegate themselves to passive roles. Two, they do not proactively seek information that can be critical to the financial well-being in later life, especially for non-working women. They don’t know if they are nominees in investments, if their husbands are insured, how they will fend during retirement, even where the important documents are stored. This, despite the rising incidence of divorce and a higher life expectancy for women; they live 5-7 years longer than men.
Does this apathy also spring from the notion that men are better than women when it comes to financial dealings? Perhaps, but this belief is not backed by any scientific study. On the contrary, several studies prove that women earn better results in market investing as they take fewer risks and churn less frequently (see page 17). Is this enough to spur women into spunk? Unfortunately, no.
So, what we attempt in the following pages may seem as puny a propulsion in the desired direction, but it’s necessary. We shall take you women through seven simple steps towards financial empowerment. It doesn’t matter how old you are, whether you are single or married, working or a homemaker. All you need to know is that personal finance is not astrophysics and all you need to do is believe in yourself. “After all, you are the best judge of your needs and it’s better to work towards satisfying these rather than expect someone else to do it for you,” says Kulkarni.
Follow this advice and we assure you that you shall jive your way to riches, not financial insecurity.
1 GET A LITTLE BLACK BOOK
Budgeting & banking
Simplistic as it may seem, getting a diary or an online planner is your first step towards empowerment. Start recording in this diary the inflow and outflow of money over a period of 2-3 months. Dismayingly, only 27% of Indian women solely manage the household budget, according to the HSBC Future of Retirement report 2011. So, if you are not a part of the lowly figure, undertake this crucial exercise. You can take heart from the fact that Indian women scored the best in financial planning and basic money management among 14 nations, according to the Mastercard Financial Literacy Index 2011.
Budgeting will give you an idea about the money you save and the amount you can invest. If you are working, squirrel away 10% of your income, and if you get a fixed amount from your spouse, well, do exactly the same.
The next crucial step is to imbibe the basics of banking. Though most women do this on a regular basis, as Jayant Pai, vice-president, Parag Parikh Financial Advisory Services, says, “I’ve seen well-educated women, who don’t know how to fill up a form for opening a bank account.” So, if you fall in the latter category, figure out how to fill it and open a savings account, which is preferably linked to a fixed deposit. This will ensure a high rate of interest and offer liquidity. Having an account is critical since you can use your money to invest as per your will while making it grow at a nominal rate.
Now, familiarise yourself with tasks like the working of an ATM card, writing a cheque, knowing the difference between a demand draft and a cheque, and reading the account statement. A simple way to curtail dependency on your spouse and expunge intimidating trips to the bank is to tame your tech phobia (if you have one) and register for Net banking. This will help you view your account statements, pay utility and credit card bills, transfer funds, recharge your phone, even pay loan EMIs. Yes, you are already on your way to financial freedom ....
Simplistic as it may seem, getting a diary or an online planner is your first step towards empowerment. Start recording in this diary the inflow and outflow of money over a period of 2-3 months. Dismayingly, only 27% of Indian women solely manage the household budget, according to the HSBC Future of Retirement report 2011. So, if you are not a part of the lowly figure, undertake this crucial exercise. You can take heart from the fact that Indian women scored the best in financial planning and basic money management among 14 nations, according to the Mastercard Financial Literacy Index 2011.
Budgeting will give you an idea about the money you save and the amount you can invest. If you are working, squirrel away 10% of your income, and if you get a fixed amount from your spouse, well, do exactly the same.
The next crucial step is to imbibe the basics of banking. Though most women do this on a regular basis, as Jayant Pai, vice-president, Parag Parikh Financial Advisory Services, says, “I’ve seen well-educated women, who don’t know how to fill up a form for opening a bank account.” So, if you fall in the latter category, figure out how to fill it and open a savings account, which is preferably linked to a fixed deposit. This will ensure a high rate of interest and offer liquidity. Having an account is critical since you can use your money to invest as per your will while making it grow at a nominal rate.
Now, familiarise yourself with tasks like the working of an ATM card, writing a cheque, knowing the difference between a demand draft and a cheque, and reading the account statement. A simple way to curtail dependency on your spouse and expunge intimidating trips to the bank is to tame your tech phobia (if you have one) and register for Net banking. This will help you view your account statements, pay utility and credit card bills, transfer funds, recharge your phone, even pay loan EMIs. Yes, you are already on your way to financial freedom ....
2 YOU COME FIRST Specify goals
Identify your goals. Thinking about them is not enough. Pen them down: short-term (buying a car, going on a vacation), mediumterm (buying a house, saving for your kids’ education) and long-term goals (retirement), and the amounts you are likely to need for these. “A lot of young women indulge in the present, assuming that the future will take care of itself,” says Monica Agrawal, director, strategies, Aviva Life Insurance. “They should chalk out clear, realistic financial goals at an early stage,” she says.
At the top of this priority pile should be retirement. But what about kids? Yes, they are important, but saving for retirement is an imperative. Don’t forget that women live 5-7 years longer than men on an average, work for fewer years due to child caring responsibilities, and earn lesser—in India, they make 64% of what men do in the same occupation and at the same level of qualification, according to the Wage Indicator report on gender gaps for 2010 . These three factors can amount to a huge shortfall in savings (see graph). “Due to the difference in earning patterns and priorities women set for themselves, they need to handle their finances differently from men,” says Kanchana TK, executive director, Vantage Insurance Brokers & Risk Advisors.
So start saving for retirement the minute you start working. If you don’t earn, keep aside a small amount from household expenses for this goal. After all, you need to tap the power of compounding. “First protect and provide for yourself and your spouse, then the kids,” says PV Subramanyam, financial trainer at Iris.
This should be an important learning for women like 35-year-old Shikha Khullar, who runs her own placement agency in Delhi, and has an extremely high financial acumen when it comes to her insurance needs, emergency preparation and investments. Yet, she is giving retirement the short shrift. “At this point,” she says, “kids’ studies are more important.” No, your kids can take an education loan, you can’t take a loan for retirement. “Everything else can be compromised, but you cannot scale down on your retirement savings,” says Subramanyam.
3 MAKE YOUR MONEY GROW What is asset allocation?
Asset allocation is the biggest deterrent for women when it comes to financial planning. Now that you have a bank account and have started saving, don’t you want it to grow to a large corpus? So don’t let alliteration scare you into submission or sneak out of financial planning. Asset allocation simply means putting your money in different investment avenues. This will depend on your goals, time horizon and risk appetite. You can put the money in asset classes, such as equity (stocks, mutual funds), debt (fixed deposits, bonds, debt funds), gold or real estate. If you are still dumbstruck by germanely geeky terms like mutual funds and bonds, approach the Internet; it is a one-stop shop for dispelling ignorance. It will be worth putting in the effort to educate yourself if you seriously crave financial independence.
“The investing strategy for both men and women is essentially the same. However, it may differ for the latter since they have to think about easy liquidity of investments and preservation of capital, given the fact that they may be homemakers or may not have the certainty of continuous employment,” says Kulkarni.
“What they really need to be concerned about is that the world has changed a lot and many good investment vehicles have been defeated,” says Jhaveri. Does this make choosing the right avenue more difficult now? The best way to get around this dilemma is to not put all your eggs in one basket. So, even though a stock-heavy portfolio has delivered stellar returns in the past 10 years, as the visual below shows, it is safer to adopt a balanced approach and spread your money in a mix of equity, debt, gold and real estate.
Most women, out of fear or ignorance, stick to just one. Take 54-year-old Bandana Kalita from Delhi or 39-year-old Anagha Kulkarni, an entrepreneur from Hyderabad, (see pictures), both of whom have focused on property. In doing so, they may have compromised on the cost opportunity of their savings. Anagha has started trading in stocks in the past five years, and has even benefited from it. However, Pai is disapproving: “Stock trading is for more evolved people. At the most, women should allocate 5% of their portfolio to it. They should treat it as a stepping stone to learning about finances, not as a serious investment avenue.”
A good alternative to avoiding direct exposure to the risky equity is mutual funds. These buy a bunch of stocks according to the investing mandate and are managed by experts. So you can easily pass on your worries to the fund manager and hedge your bets. “Regularly investing through systematic investment plans (SIPs) of diversified equity mutual funds helps build a large corpus with less hardship. Treat SIPs as a monthly outgo in budgeting and look for a 10-15-year time horizon to reap benefits,” says Kulkarni.
Gurgaon-based Alka Vishnu, 39, does just this. “I was encouraged by my husband to invest in mutual funds and now have a portfolio of 5-6 funds,” says the homemaker, who not only does her own research, but also monitors it regularly and has her husband, Virendra, depending on her completely.
The next googly? How do you know which particular stock or fund to pick? The Internet will again dribble out the answers. You will find the returns of mutual funds, stocks, gold, etc, on the company, mutual fund or fund analysis sites like Value Research, and can scan finance newspapers and TV programmes. It is critical to conduct your own research if you do not want to be saddled with a loser.
If no amount of self-help works, it could be time to employ a financial adviser. He will not only assist you in formulating a plan and deciding the asset allocation that suits you, but also suggest products and monitor your portfolio. This could be money well spent.
Asset allocation is the biggest deterrent for women when it comes to financial planning. Now that you have a bank account and have started saving, don’t you want it to grow to a large corpus? So don’t let alliteration scare you into submission or sneak out of financial planning. Asset allocation simply means putting your money in different investment avenues. This will depend on your goals, time horizon and risk appetite. You can put the money in asset classes, such as equity (stocks, mutual funds), debt (fixed deposits, bonds, debt funds), gold or real estate. If you are still dumbstruck by germanely geeky terms like mutual funds and bonds, approach the Internet; it is a one-stop shop for dispelling ignorance. It will be worth putting in the effort to educate yourself if you seriously crave financial independence.
“The investing strategy for both men and women is essentially the same. However, it may differ for the latter since they have to think about easy liquidity of investments and preservation of capital, given the fact that they may be homemakers or may not have the certainty of continuous employment,” says Kulkarni.
“What they really need to be concerned about is that the world has changed a lot and many good investment vehicles have been defeated,” says Jhaveri. Does this make choosing the right avenue more difficult now? The best way to get around this dilemma is to not put all your eggs in one basket. So, even though a stock-heavy portfolio has delivered stellar returns in the past 10 years, as the visual below shows, it is safer to adopt a balanced approach and spread your money in a mix of equity, debt, gold and real estate.
Most women, out of fear or ignorance, stick to just one. Take 54-year-old Bandana Kalita from Delhi or 39-year-old Anagha Kulkarni, an entrepreneur from Hyderabad, (see pictures), both of whom have focused on property. In doing so, they may have compromised on the cost opportunity of their savings. Anagha has started trading in stocks in the past five years, and has even benefited from it. However, Pai is disapproving: “Stock trading is for more evolved people. At the most, women should allocate 5% of their portfolio to it. They should treat it as a stepping stone to learning about finances, not as a serious investment avenue.”
A good alternative to avoiding direct exposure to the risky equity is mutual funds. These buy a bunch of stocks according to the investing mandate and are managed by experts. So you can easily pass on your worries to the fund manager and hedge your bets. “Regularly investing through systematic investment plans (SIPs) of diversified equity mutual funds helps build a large corpus with less hardship. Treat SIPs as a monthly outgo in budgeting and look for a 10-15-year time horizon to reap benefits,” says Kulkarni.
Gurgaon-based Alka Vishnu, 39, does just this. “I was encouraged by my husband to invest in mutual funds and now have a portfolio of 5-6 funds,” says the homemaker, who not only does her own research, but also monitors it regularly and has her husband, Virendra, depending on her completely.
The next googly? How do you know which particular stock or fund to pick? The Internet will again dribble out the answers. You will find the returns of mutual funds, stocks, gold, etc, on the company, mutual fund or fund analysis sites like Value Research, and can scan finance newspapers and TV programmes. It is critical to conduct your own research if you do not want to be saddled with a loser.
If no amount of self-help works, it could be time to employ a financial adviser. He will not only assist you in formulating a plan and deciding the asset allocation that suits you, but also suggest products and monitor your portfolio. This could be money well spent.
4 BE IN THE KNOW Not
all paperwork is boring
Documentation is not a dirty word, especially when it spells security for you. A lot of women are rendered dependent and destitute because they are not aware of the investments, their nominee status or the redemption procedures. How can you make sure you never land in such a situation?
Even if you are not investing actively, constrained either by time, circumstance, or faith in your own ability, it doesn’t have to be the end of your financial freedom. As important as investing is the knowledge and awareness about investments. “It takes 20-30 minutes in a year to get this information,” says Jhaveri. So, find out about the following from your spouse/father: How many and where have the investments been made? Are you or your kids joint holders/nominees for bank accounts and other investments? What are the EMI size, tenure and size of loans? Is your husband adequately insured if he is the only earning member? (The insurance amount should not only be able to cover your expenses but also liabilities like loans.) Has your spouse/father made a will in which you/kids are beneficiaries? Most importantly, do you know the procedure of processing these documents in case he is not there.
If your answer to any of these questions is a ‘no’, you face grave risk. “What good does it do to sit on crores of rupees if you can’t access it? Establishing the ownership of assets is critical for women,” says Jhaveri.
Get your little planner out and note down all these details. You will need the diary even if you are working and investing proactively. What’s valid for the spouse holds for you if you have dependants. So, ensure all your documents are in order and draw up a will if you have assets, no matter how old you are.
Reading up on documents is also essential if you do not want to be cheated or missold products. “I make it a point to read all documents before buying a product. If I don’t have time, I scan the broader points and even try to read fund newsletters,” says Khullar, mother of two toddlers, whose documents are well-organised.
Documentation is not a dirty word, especially when it spells security for you. A lot of women are rendered dependent and destitute because they are not aware of the investments, their nominee status or the redemption procedures. How can you make sure you never land in such a situation?
Even if you are not investing actively, constrained either by time, circumstance, or faith in your own ability, it doesn’t have to be the end of your financial freedom. As important as investing is the knowledge and awareness about investments. “It takes 20-30 minutes in a year to get this information,” says Jhaveri. So, find out about the following from your spouse/father: How many and where have the investments been made? Are you or your kids joint holders/nominees for bank accounts and other investments? What are the EMI size, tenure and size of loans? Is your husband adequately insured if he is the only earning member? (The insurance amount should not only be able to cover your expenses but also liabilities like loans.) Has your spouse/father made a will in which you/kids are beneficiaries? Most importantly, do you know the procedure of processing these documents in case he is not there.
If your answer to any of these questions is a ‘no’, you face grave risk. “What good does it do to sit on crores of rupees if you can’t access it? Establishing the ownership of assets is critical for women,” says Jhaveri.
Get your little planner out and note down all these details. You will need the diary even if you are working and investing proactively. What’s valid for the spouse holds for you if you have dependants. So, ensure all your documents are in order and draw up a will if you have assets, no matter how old you are.
Reading up on documents is also essential if you do not want to be cheated or missold products. “I make it a point to read all documents before buying a product. If I don’t have time, I scan the broader points and even try to read fund newsletters,” says Khullar, mother of two toddlers, whose documents are well-organised.
5 SECURE YOUR DEPENDANTS Are you insured enough?
This is another pitfall that stares most women in the face even though it holds the key to their financial security. At its worst, women don’t know the difference between life and medical insurance. At its best, there is Vidisha Gupta. The 41-year-old software professional from Bangalore has a term insurance plan worth 2 crore for the next 24 years. The cover is much more than five times her annual salary, the ideal amount you should consider as life cover. However, she also has two unpaid loans—a home loan worth 60 lakh and a car loan worth 9 lakh. It’s a wise move as it will ensure her two kids do not suffer financial pangs if she were to pass away suddenly.
If all this has winged past your cognitive faculties, do not panic. Most women have no clue about insurance. They don’t really need to know about every insurance policy in the market, but it should be mandatory for them to distinguish their term plans from endowment and Ulips from medical plans.
It’s equally important not to confuse insurance with investment. Insurance is an instrument that allows you to secure your dependants, health or property, while investment helps your money grow. The two are often mixed up because of the several products in the market that combine the two. Take a look at the above chart to distinguish between the basic types of life insurance policies. So, if you just want to secure your life, go for a term plan and expect no returns on maturity. It’s simply meant to ensure that if you are an earning member, your family doesn’t suffer financially if you pass away during the plan’s tenure. The other types offer insurance and invest your money, but are either too expensive (Ulips) or offer low returns (money-back).
If, however, you are a homemaker, make sure your husband is adequately covered. “Insurance is the most critical aspect of financial planning and it is advisable to invest in a simple term insurance early enough to ensure financial continuity for dependants,” says Agrawal of Aviva Life Insurance.
What about medical or health insurance? It’s taken to make sure that if you or any other family member is hospitalised, the expense is covered. You can either go for an individual plan or a family floater, which will cover your husband and kids as well. If you are not employed, prod your husband into buying a plan for the family or check if he’s being offered one by his employer.
This is another pitfall that stares most women in the face even though it holds the key to their financial security. At its worst, women don’t know the difference between life and medical insurance. At its best, there is Vidisha Gupta. The 41-year-old software professional from Bangalore has a term insurance plan worth 2 crore for the next 24 years. The cover is much more than five times her annual salary, the ideal amount you should consider as life cover. However, she also has two unpaid loans—a home loan worth 60 lakh and a car loan worth 9 lakh. It’s a wise move as it will ensure her two kids do not suffer financial pangs if she were to pass away suddenly.
If all this has winged past your cognitive faculties, do not panic. Most women have no clue about insurance. They don’t really need to know about every insurance policy in the market, but it should be mandatory for them to distinguish their term plans from endowment and Ulips from medical plans.
It’s equally important not to confuse insurance with investment. Insurance is an instrument that allows you to secure your dependants, health or property, while investment helps your money grow. The two are often mixed up because of the several products in the market that combine the two. Take a look at the above chart to distinguish between the basic types of life insurance policies. So, if you just want to secure your life, go for a term plan and expect no returns on maturity. It’s simply meant to ensure that if you are an earning member, your family doesn’t suffer financially if you pass away during the plan’s tenure. The other types offer insurance and invest your money, but are either too expensive (Ulips) or offer low returns (money-back).
If, however, you are a homemaker, make sure your husband is adequately covered. “Insurance is the most critical aspect of financial planning and it is advisable to invest in a simple term insurance early enough to ensure financial continuity for dependants,” says Agrawal of Aviva Life Insurance.
What about medical or health insurance? It’s taken to make sure that if you or any other family member is hospitalised, the expense is covered. You can either go for an individual plan or a family floater, which will cover your husband and kids as well. If you are not employed, prod your husband into buying a plan for the family or check if he’s being offered one by his employer.
6 PREPARE FOR THE WORST Have a contingency fund
So you are in a sweet spot. You have secured your financial freedom to a large extent. You are a Net-savvy, well-insured, proactive investor, who won’t have to depend on anyone if faced with a crisis during your retirement. But what about now? What if you are in your 30s and left stranded by an adulterous husband? What if your medical bill overshoots the insurance amount by a wide mark or your spouse loses his job unexpectedly? Do you have enough provisions to take care of the immediate financial upheaval?
Most women don’t have funds that are clearly earmarked for such a contingency. They assume that one or the other investment will stand in good stead at such times without considering the instrument’s liquidity. So if you are banking on real estate, or one of the fixed deposits, even PPF, don’t. Real estate is not easily disposed of, FDs have inflexible limits and PPF should ideally be slotted as a retirement corpus and not dipped into prematurely. Besides, you will incur a penalty or tax if you withdraw these funds. While Anagha is depending on her property in Hyderabad to bail her out of any crisis, 31-year-old Sumedha Kang of Chandigarh is sanguinely falling back on some of her fixed deposits with varying maturities. No financial planner would recommend they do this.
There are two options that you can consider. Keep reserve cash that is equal to 4-6 months of your expenses in a sweep-in savings account. This combines the benefits of liquidity with higher interest rates. The other option is short-term liquid funds, which invest in low-risk instruments and can be redeemed within 24 hours. They also offer higher rates of interest than a savings account. So, go ahead and park your money in one of these options and ensure protection against unexpected events.
So you are in a sweet spot. You have secured your financial freedom to a large extent. You are a Net-savvy, well-insured, proactive investor, who won’t have to depend on anyone if faced with a crisis during your retirement. But what about now? What if you are in your 30s and left stranded by an adulterous husband? What if your medical bill overshoots the insurance amount by a wide mark or your spouse loses his job unexpectedly? Do you have enough provisions to take care of the immediate financial upheaval?
Most women don’t have funds that are clearly earmarked for such a contingency. They assume that one or the other investment will stand in good stead at such times without considering the instrument’s liquidity. So if you are banking on real estate, or one of the fixed deposits, even PPF, don’t. Real estate is not easily disposed of, FDs have inflexible limits and PPF should ideally be slotted as a retirement corpus and not dipped into prematurely. Besides, you will incur a penalty or tax if you withdraw these funds. While Anagha is depending on her property in Hyderabad to bail her out of any crisis, 31-year-old Sumedha Kang of Chandigarh is sanguinely falling back on some of her fixed deposits with varying maturities. No financial planner would recommend they do this.
There are two options that you can consider. Keep reserve cash that is equal to 4-6 months of your expenses in a sweep-in savings account. This combines the benefits of liquidity with higher interest rates. The other option is short-term liquid funds, which invest in low-risk instruments and can be redeemed within 24 hours. They also offer higher rates of interest than a savings account. So, go ahead and park your money in one of these options and ensure protection against unexpected events.
7 DON’T REST ON
YOUR LAURELS Keep tabs, keep learning
You have reached the end of your financial learning, but ‘end’ may well be a misnomer. Don’t shunt out your planner, lapse into lethargy, or refuse to upgrade your knowledge in every aspect of personal finance. It’s a sure recipe for risking your long-term security.
Every investment requires periodic and careful monitoring. If your investment, be it stocks, mutual fund or property, is not performing well, it needs to be weeded out and replaced with one that is doing better. It is essential to have a disciplined portfolio by sticking to an asset allocation plan. You will need to alter your debt and equity components as you grow older and with changing circumstances, which is why it’s essential to be proactive at all times.
Keep tabs on changes in rules and regulation in the stock market, insurance, banking or taxation, as all these will impact your finances. It’s not important that you personally file your taxes (you can hire a CA), but know your tax slabs, when you should file your returns and how the calculations have been made. Taxation is also innate to any product you purchase or sell, for the tax levied will chip into your returns. Know how much tax you will need to pay at what stage of a product’s life, be it a house, mutual funds, fixed deposits or bonds.
Finally, remember to pass on your learning to your children, especially daughters. Financially savvy girls will shape up into independent and secure women, who will not have to depend on the men in their lives. You can do this only if you are one yourself. It’s time you took the first step towards empowerment. After all, you need to pirouette around money for the rest of your life.
—with inputs from Sameer Bhardwaj
You have reached the end of your financial learning, but ‘end’ may well be a misnomer. Don’t shunt out your planner, lapse into lethargy, or refuse to upgrade your knowledge in every aspect of personal finance. It’s a sure recipe for risking your long-term security.
Every investment requires periodic and careful monitoring. If your investment, be it stocks, mutual fund or property, is not performing well, it needs to be weeded out and replaced with one that is doing better. It is essential to have a disciplined portfolio by sticking to an asset allocation plan. You will need to alter your debt and equity components as you grow older and with changing circumstances, which is why it’s essential to be proactive at all times.
Keep tabs on changes in rules and regulation in the stock market, insurance, banking or taxation, as all these will impact your finances. It’s not important that you personally file your taxes (you can hire a CA), but know your tax slabs, when you should file your returns and how the calculations have been made. Taxation is also innate to any product you purchase or sell, for the tax levied will chip into your returns. Know how much tax you will need to pay at what stage of a product’s life, be it a house, mutual funds, fixed deposits or bonds.
Finally, remember to pass on your learning to your children, especially daughters. Financially savvy girls will shape up into independent and secure women, who will not have to depend on the men in their lives. You can do this only if you are one yourself. It’s time you took the first step towards empowerment. After all, you need to pirouette around money for the rest of your life.
—with inputs from Sameer Bhardwaj
-- RIJU
MEHTA ETW 120305
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