Women in India are vulnerable because they remain in the background when important financial decisions are concerned, but they must take charge and they may even be much better than men at making such decisions
In continuing the tradition of educating women about their financial needs and the ways to go about fulfilling them, Moneylife Foundation conducted twin sessions titled “What All Women Need to Know about Money!” This workshop was presented in association with the “Womentoring” programme at the National Human Resources Development Network (NHRD Network).
Sucheta Dalal, Founder-Trustee of Moneylife Foundation and Managing Editor of Moneylife, began the workshop with her session on the aspect of safety, where monetary issues specific to women are concerned. According to her, it all starts when women leave all financial decisions to their husband/ father, without realising that these decisions can play havoc with their lives. “They are often made co-applicants in loans and beneficiaries in investments and insurance, without their knowledge. They may then outlive their husbands, end up losing out on their own savings as well as the inheritance, only because of a lack of awareness,” she said.
Many women also tend to give up their savings for financial emergencies in the family, which leaves them vulnerable and dependent. In this regard, the condition of working women is no better than homemakers, especially those who opt out of careers due to family responsibilities. Ms Dalal advised how women should start preparing in a manner that sustains them over decades. She enlightened them about insurance, wills and nominations. The audience members jumped in with questions as the session went on, especially many questions on the specifics of Wills.
Ms Dalal suggested that women should use nationalised and large banks, and avoid dealing with co-operative banks. “Be careful while dealing with relationship mangers. You are targets for them, and they will push harmful products because they know that women are soft targets. No matter what committments they make, their targets are to sell you their products.” She also added that, if you knew financial products well, “you could use Relationship Managers to get your work done, but do not trust their investment advice.”
Moneylife magazine had earlier carried a story about how the actress Suchitra Krishnamoorthy was duped of her savings by HSBC. “Its important to read the fine print word by word while buying insurance, since buying insurance is easy, but getting the claim is a completely different story,” Ms Dalal said. She also said that there is a huge difference between investment and insurance and that the two should never be mixed
Picking up real life cases from the bluntly titled book, “Breaking Up”, on how women have been forced into situations where they have to shoulder the financial responsibilities of the family, irrespective of whether they have a commensurate income or not. There have been many cases when, after shifting some major liability onto them, they were literally thrown out on the road. They are unable to claim either their income or the assets that were purchased by using their income. Overall, the topics covered, ranged from investment traps such as chain-money schemes and guaranteed-return schemes, credit traps such as credit cards and loans, wills, nominations, credit scores etc.
During the second session, Debashis Basu, editor and publisher of Moneylife, spelt out various ways in which one can be smart with money—and presented to the audience the best ways in which they can manage their money. Mr Basu emphasised the importance of saving regularly to deal with big expenses such as education for children and more importantly for retirement. He shared examples that illustrated how one could use the power of compounding to their benefit. “The best way to invest smartly is to start as early as possible and save as much as possible”, said Mr Basu.
There are too many choices in financial products, many of them are half-baked products and brand names mean nothing, because cases of horrendous mis-selling are seen even among banks which charge a fat premium for their services.
One of the most important aspect of savings, is the excessive choice in products, where a majority of savers are left confused. Left with confusing choices, majority of the savers opt for bank fixed deposits, which is a safe and easy option. Mr Basu explained to the audience how much they should allocate to fixed income investments and equity mutual funds depending on their age and whether or not they have dependents.
Every saver needs to ask themselves a question—“What do I really need?” A saver actually needs less, not more. With fewer options to evaluate, an investor will be a much happier person; they will spend more time with your loved ones and have more money at their disposal which can be used to invest wisely. Thus, one needs to make an effort to choose a few items, that suit their profile and their needs. This will increase satisfaction over the long term and lead to lesser regrets. “All you need is just two to three equity schemes, a few fixed income products, a term life insurance, a health plan and tax-saving instruments. Tune out the rest and you will do much better,” explained Mr Basu. This takes care of 90% of your financial needs for a safe financial life, if you are not focussed on getting the highest return and chasing value.
Mr. Basu explained which products to avoid and which products to invest in, with an idea of what is the right asset allocation. He went on to debunk myths about risk and how all that glitters is not gold. He ended the session by saying that, “what works in life also works with investments, patience and the long term.”
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HDFC Life, Birla Sun Life and Reliance...
Nifty will decline sharply, if it closes below Tuesday's low of 7,638
We mentioned on Tuesday that the NSE's CNX Nifty will head higher. However, this turned out to be wrong because of continued decline in global markets. For the entire session on Wednesday, the domestic indices traded in the negative. After witnessing a range bound movement during the morning session, the benchmark indices made a move further lower in the afternoon session and ultimately, the benchmarks closed near their intra-day lows. Weakness on the US indices on Tuesday cast a negative shadow on the Asian bourses today.
The S&P BSE Sensex opened at 25,893 while the Nifty opened at 7,726. Sensex reached up to 25,902 while Nifty managed to reach the level of 7,741. Both the indices managed to keep themselves above past four day’s low (including today). The Sensex hit a low of 25,622 and closed at 25,665 (down 243 points or 0.94%) while Nifty hit a low at 7,659 and closed at 7,672 (down 75 points or 0.96%). The NSE recorded a lower volume of 81.10 crore shares. India VIX rose 2.50% to close at 14.2975.
Except for IT (0.59%) all the other indices on the NSE closed in the red. The top five losers were PSU Bank (2.20%), Metal (1.97%), Bank Nifty (1.86%), Finance (1.61%) and FMCG (1.49%).
Of the 50 stocks on the Nifty, 12 ended in the green. The top five gainers were Infosys (1.34%), Power Grid (1.28%), Asian Paints (1.04%), M&M (0.80%) and Reliance Industries (0.63%). The top five losers were ITC (2.99%), PNB (2.71%), ICICI Bank (2.67%), Sesa Sterlite (2.44%) and Axis Bank (2.35%).
Of the 1,613 companies on the NSE, 716 companies closed in the green, 821 companies closed in the red while 76 companies closed flat.
Today the Indian rupee turned weak to reach its lowest since 14 March 2014. Rupee on Wednesday closed at 61.336 against the US dollar.
Deadlock continued between the Indian government and the opposition over clearance of insurance bill in the Rajya Sabha. Over the past week, the government has reportedly twice sought to introduce legislation in the upper house of parliament permitting 49% foreign participation in an insurance venture, up from 26%, but it has been blocked by the opposition.
Life Insurance Corporation of India (LIC) is looking at equity investments of around Rs60,000 crore for 2014-15. Its chairman SK Roy said the government-run insurer is positive on Indian stocks. "I see further upside for market in FY15," Roy told a business channel.
With government announcing the re-introduction of tax incentives for investors in wind energy, Suzlon Energy is confident of boosting its India business. Suzlon Energy (4.79%) was among the top two gainers in ‘A’ group on the BSE.
Bhushan Steel (20%) was the top loser in ‘A’ group on the BSE. CBI Director Ranjit Sinha has reportedly ordered an internal inquiry after his team did not arrest Bhushan Steel's vice-chairman Neeraj Singhal during searches at his residence in the Syndicate Bank bribery case, despite clear instructions to pick him up. Singhal is on the run from the time of the raid and the CBI has been trying to trace him, so that he can be arrested, reports added. Neeraj Singhal has filed an anticipatory bail application in a local court.
Infosys (2.01%) was the top gainer in Sensex 30 pack. The gain is on the back of the news that the former finance chief of Infosys is leading an effort to persuade his former employer to buy back shares. V Balakrishnan, who resigned from the company in December 2013, is of the view that a share repurchase will bolster confidence in the new chief executive officer Vishal Sikka.
Today all the banking stocks in the Sensex 30 stock were among the losers. ICICI Bank (2.60%), Axis Bank (2.42%), SBI (1.75%) and HDFC Bank (1.27%) were among the major losers.
US indices closed Tuesday in the negative. Service industries in the US expanded in July at the fastest pace since December 2005, according to data from the Institute for Supply Management. Another release showed factory orders rose 1.1% in June, above estimates.
Except for Taiwan Weighted (0.03%) all the other trading Asian indices closed in the negative. Nikkei 225 (1.05%) was the top loser. European indices were trading in the red. US Futures too were trading sharply lower.
German factory orders dropped the most in more than two and half years indicating that geopolitical tension with Russia is leaving its mark on Europe's largest economy. Orders, adjusted for seasonal swings and inflation, slid 3.2% in June from May, when they fell a revised 1.6%, the Economy Ministry in Berlin said today.