Mistakes women should avoid in order to achieve financial stability

Invest in regular health care program and for the long term to create wealth and lead a stress a free life

Today's women are juggling between high-pressure work environments, fast-paced social life and simultaneously managing the family, which can sometimes put money management on the back seat. A few money management mistakes if avoided in the earlier part of life can help women hand carve and secure a financial future. It is advisable that they start their financial planning journey with the help of an advisor, who will help in drafting a customized fiscal road map, ensure optimum asset allocation as per the risk profile and simultaneously help in the execution of the investments.

The seven mistakes that a woman should avoid being financially independent are

1.    Not having a contingency reserve of six months expenses

2.    Not investing regularly in a diversified portfolio with the right asset mix as per the risk profile

3.    Not creating a retirement corpus Not creating a sufficient corpus for children's education

4.    Not protecting against risks to health and life by buying sufficient health and life insurance

5.    Spending too much in impulsive purchases & not keeping avoidable debt under control and

6.    Being too dependent on the male members of the family like husband and father to manage finances and being oblivious of the process is a fundamental flaw which should be avoided

7.    Being financially literate is not a choice today but a necessity.

Have an emergency fund

The blunder of not having a six months contingency reserve in the bank account / liquid funds may have dire consequences in case of job loss or medical emergencies. Having a contingency reserve allows bouncing back in case of any eventualities.

Diversify your investments

We all know the importance of "Not keeping all our eggs in one basket" and so investments need to be diversified. While it is important to start investing early to take advantage of the power of compounding, it is more important to ensure the discipline of continuity of regular monthly investments. Systematic investment plans (SIPs) in mutual funds are a smart solution to this.

Health, wealth and happiness

Retiring from work is obvious, but many women fail to plan for post-retirement. Starting retirement savings in the early part of life leads to a larger retirement corpus, which eventually provides for better post-retirement security. Being frugal and cautious by nature, women prefer to keep money in a savings bank account or make investments earning a fixed rate of interest. A higher allocation to equity generally results in building a larger retirement corpus, though the right mix should be identified after speaking to your financial advisor.

The same is true the women who are mothers. Their biggest prized possession is their child and there the most important goal is the child's education. Higher education costs are growing every year and regularly investing in equity mutual funds through the Systematic Investment Planning (SIP) route and increasing this amount regularly as incomes grow, after discussing the exact amounts needed with the financial the planner is a good solution to achieve this goal.

Life is unpredictable, but managing finance well isn't. The importance of life insurance and health insurance is paramount. Empirically it is seen that women, in general, live longer than men, which increases the importance of health insurance.

Expenses from activities like frequent dining out and impulsive shopping, using credit card borrowings, may lead to a ballooning of debts and then into a debt trap and realization often comes late, when actually one starts checking the interest charged on the credit card statements. It is important to stick to a monthly budget, and as soon as one receives the monthly income, transfer 20 to 30 % to a separate bank account for investments. Also, many mobile apps are now available, which help in tracking monthly expenses and also show the trends in spending. Expense control is a critical step in wealth creation. It is rightly said, "A rupee saved is a rupee earned".

Inheriting money from father or sometimes after the unfortunate death of the spouse generally leads to the acquisition of a large chunk of money. The vulnerability at that moment is also high. It is advisable to protect and invest such corpus wisely, after taking advice from a legal counselor and a financial advisor or getting in touch with a wealth management firm, who provides a 360-degree service.

In a nutshell, every woman should keep this mantra of HWH (health, wealth and happiness) in their mind while participating in the race of life. Investing in a regular health care program, investing in the long term to create wealth and living a stress a free life should be the essence for today's modern women.

The writer is CEO of Karvy Private Wealth

Read at https://www.dnaindia.com/personal-finance/report-mistakes-women-should-avoid-in-order-to-achive-financial-stability-2733561

HNIs are looking at international diversification: Abhijit Bhave of Karvy

The wealthy, Bhave says, has evolved a lot in the past two-three years, especially in terms of making learned decisions and considering the costs involved in the investments

ABHIJIT BHAVE, chief executive officer of Karvy Private Wealth talks to Puneet Wadhwa on the key trends in the wealth management business in India and the road ahead for the industry. Edited excerpts:

Do you think the wealth management segment is getting overcrowded and the margins will get thinner going ahead?

India is on the growth trajectory where projections of a $10 trillion economy over eight years are being made. This leads to a lot of potentials for wealth management companies to grow and the sector will not get saturated anytime soon. In the short-term, there may seem to be some overcrowding in this space. That said, there is huge potential to grow over the long term.

The margins will definitely get thinner going ahead but an increase in the asset base in terms of volumes will bring profitability in the future rather than margins. One of the options that many wealth management companies would consider after regulatory clarity would be to go into the advisory model for long term sustainability of the business.

Can you elaborate on the likely industry growth rate for the next three-five years?

Considering projections of at least a $5 trillion economy over the next three-five years and the increase and inclusion of a larger investor base across the length and breadth of India, double-digit growth in the wealth management industry is very likely.

The wealth management business competes with banks as well. How do you maintain your leadership, profitability and growth strategy?

While a bank will provide comprehensive banking solutions where wealth management is a part of their services, we are specialists in only wealth management. We focus and position ourselves into offering the best in class investment products. By maintaining a diverse and all-inclusive category of products after strict due diligence and evaluation, we get a competitive edge in terms of investments.

How have the investing trends among the wealthy/high net worth individuals changed over the last two-three years? What is the road ahead?

The wealthy have evolved a lot in the past two-three years, especially in terms of making learned decisions and considering the costs involved in the investments. The requirements have also evolved over time, where they are actively looking at absolute return strategies, venture capital (VC), private equity (PE) and international diversification. The merits of advisory models, succession and estate planning are also visible and exercised. Going ahead, we foresee a much deeper relationship between ultra-high net worth (UHNI) clients and wealth managers in the advisory role, where both would have higher levels of awareness and knowledge levels.

Over the last few years, avenues such as art, wines, etc have emerged as investment options. Are the well-heeled in India looking that them?

Though these investment avenues sound glamorous and may seem attractive, we believe these avenues have yet not evolved in a structured way in India compared to the developed economies. The UHNI segment is definitely looking at these investment avenues, but not a lot of actual investments are happening. These investments are expensive to enter and the exits are uncertain. Though if the right one is picked up early, the returns can be astronomical.

Visit - https://www.business-standard.com/article/markets/hnis-are-looking-at-international-diversification-abhijit-bhave-of-karvy-119021100286_1.html

An experience which inculcates a ‘never give up’ attitude

The initiative, conducted over Sept, Oct and Nov by Karvy, is viewed as a great morale booster among employees

The initiative has encouraged a culture of creative thinking, say some employees
It’s not every day that you are cherry-picked to become the CEO of a company. Prashant Wagh, vice-president (VP), wealth management, at Karvy Private Wealth got the chance to sit—literally—in the top boss’ chair as part of Karvy’s “CEO for a day" initiative.

To make the day memorable, Wagh’s family received a bouquet, announcing his new designation, at their home in Pune. The 37-year old moved into the company’s guest house a day ahead of the “big day". The next morning, he was chauffeured to Karvy’s Mumbai head office, where he spent the day familiarizing himself with the tasks of a CEO.

Ratika Gujral Manjrekar, 32, associate VP, wealth management, and Naveen Govind, 41, VP, wealth management, were two others chosen as “CEO". “I thoroughly enjoyed the help and assistance being provided to me seamlessly. The reporting business analyst kept all the collated data ready for me before the conference calls with the pan-India teams and review during the day. The executive assistant to the CEO organized and kept things handy for me and the chauffeur, who drove me around; all of these proved to be a great set of helping hands," says Manjrekar.

They were also handed a new set of visiting cards mentioning their designation as CEO. “It indicated how seriously this initiative was being taken, not as a feel-good activity," Manjrekar says.

The initiative, conducted over September, October and November, is viewed as a great morale booster among employees. Besides bragging rights, the chosen employees got to attend the high-level decision-making process and spend time with the CEO, Abhijit Bhave. The Karvy CEO was keen on receiving feedback and ideas that help the business.

“An employee who wishes to become the CEO writes down various ideas that help the company achieve its corporate objectives holistically, and how he/she would implement the same if he/she were to actually become the CEO. The opportunity to become the CEO for a day and running an organization in itself was a huge motivator for many colleagues to give detailed inputs to try and achieve their aspiration," explains Bhave.

Applications were invited, and the three selected from the 38 who expressed interest.

Getting into the job

For Manjrekar, the day began with a pan-India conference call with different team leads, followed by a western region review, where she sat in on performance reviews and in meetings setting targets for the next quarter with regional head and line managers, including her immediate boss. The day ended with a meeting with the company’s core team and a one-on-one chat with Bhave, during which he advised her on ways of achieving her career goals, how to grow in life, etc. Interestingly, Bhave also had other advice for Manjrekar. “He called me in the morning and said that as it was going to be a heavy day, I should take out some time for meditation. And I did. I picked up some meditation music online and took out half an hour to meditate," says Manjrekar, who admires Ratan Tata and N.R. Narayana Murthy for not only making their companies profitable but also giving importance to corporate social responsibility (CSR) initiatives.

For Wagh, the highlight of the day was being able to share his ideas about each department in detail and explain how this would benefit the company’s growth. “It’s a brilliant feeling when everyone listens to you and your thoughts. I enjoyed the Q&A session during the conference call with employees across centres too, as I was feeling the heat of reactions on some of the points I made. I really felt the importance as well as the responsibilities of the CEO’s chair in that one hour and learnt a lot about leadership. It’s definitely not an easy job when you interact with a large set of employees with different thoughts and experiences," he recalls.

Top takeaways

Wagh and Manjrekar have a renewed appreciation for the role of a CEO, having experienced the challenges it comes with. “It has changed my approach towards the company’s policies and has been a big boon to me as I was able to see the CEO’s perspective towards the company’s functioning. I am now able to convey the organization’s thought process behind any strategy/product mix to my team effectively and make them understand the long-term benefits. Front-line employees react to policies, as, most of the time, they only think about short-term pros and cons, but I was able to curb that," says Wagh.

Manjrekar believes the experience has inculcated a “never give up" attitude. “On the professional front, it has given me a lot of recognition—colleagues, seniors and even employees of other organizations have inquired about this day."

The learning, though, is not just restricted to employees alone. The initiative has encouraged a culture of creative thinking. “Sometimes the top management may lose sight of some low-hanging fruit, which may be easy wins. We found that all the three colleagues selected to be the CEO took quick and implementable decisions," Bhave says.

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