In the ancient times, women were not allowed to even get education. Their role was purely to look after home. Their world was limited to their families. But then, the people slowly started recognizing the importance of education for women. And today, we find many highly educated women. They are progressing in real sense because in almost all sectors we find women working successfully. And of course, while doing so, they haven’t forgotten their job of homemaker. On both the fronts i.e. home & job, they are doing just fine. They know how to manage work life balance. Now-a-days, we find more and more women who are financially independent. No doubt, today’s women are more successful. They are getting paid handsome salaries. But what about their investment behaviour? Are they financially aware enough to make their own investments? If yes, then what are their investment patterns? What are their perceptions towards savings and investment, what is their risk bearing capacity? The answers to these questions are necessary for getting the picture of the role of Indian working women while taking the investment decisions.
Financial investment is the purchase of a financial security such as stock, bond or mortgage. As a woman & an investor, shaping of financial future is as the many other roles they play in life. Women today, have more earning potential & more influence over financial decisions than ever before. Women represent almost half of the workforce & many businesses are owned or managed by women. Many women influence or control the majority of all consumer decisions. As a result, it becomes important for women to focus on finances now more than ever.
Throughout their lives, as a woman, they face different financial challenges than their male counterparts. If women are going to take control of their financial future, it’s important that they recognize those differences & empower themselves.
Earning money is only half the equation for achieving financial independence. Effectively putting your money to work for you is equally important. In addition, circumstances are frequently different for women, and whatever choices you make will be better as a result of greater knowledge of the underlying issues & your options.
Economy of any country is driven by investments leading to capital formation. Savings lead to investments. In India, the household sector occupies the prime place as far as savings is concerned in comparison to institutional sectors, whether it is private or public. Every government in the world would like households to save, as personal saving constitutes the largest segment of national saving in most of the countries. This is followed by savings of the corporate sector, with government savings being least or negligible in most of the countries.
According to the economists and central bankers, for sustained economic growth of a country, rise in domestic savings is necessary. As per 2013 RBI annual report, household saving for 2012-13 is 22.3 percent of the GDP.
Every individual earning money, spends it to meet his or her own personal needs or to fulfil the basic needs of his or her family. Individuals use money for various purposes including funding their 2 daily house hold expenses and expenses incurred for buying luxuries for a better life. Money earned is generally used to fund some immediate expenses or saved to meet some future needs. Those who spend less than what they earn end up with savings. These savings can be accumulated and grown to fund various goals, such as, for education, marriage, vehicle purchase, house purchase or for acquiring any other asset, for medical emergencies and for meeting the post retirement financial needs. In general, the entire amount saved is not held in cash, but is invested in different asset classes or investment avenues in order to get areturn, which can be in the form of regular income or capital appreciation or sometimes both.
Women, in general are savers according to the Association of Bankers 2013 report. Even in India, under the recently launched Janadhan Scheme, a large number of new bank accounts were opened. In rural areas, major part of the new accounts was opened in the names of women according to the report released in 2014 by Punjab National Bank, resulting in a greater contribution by women. This scheme provided an opportunity for women to open bank accounts thereby increasing the percentage of the population under financial inclusion program of the government.
Three successive governments in India have stressed on providing and improving the educational opportunities for children, especially girl children. The efforts of the government have led to an increase in the number of educated women, who are well qualified and have the necessary skills to gain employment. With the opening up of the economy and the progress and investment made in the banking, financial services, insurance, software and educational sector, job opportunities have increased for women in India. The increase in the number of employed women has led to rise in the number of savers as well as the quantum of savings by women.
As per Census 2011, the population of India is 1210.19 million comprising 586.47 million (48.5%) females and 623.72 million (51.5%) males. Females have a share of 48.1% in the urban population and of 48.6% in the rural population. Women find more opportunities to work in urban cities. According to the NCAER survey of 2004 -05, the main source of income is through salary, for people living in urban areas is 36.9 percent and 81.4 percent of households at the all-India level save a part of their earnings. The figure is 88% for urban India and 78.5 % for rural India. The work force participation by women in urban sector was 13.8% for females and 54.3% for males. Employment to population ratio for 4 female in India was last measured at 27.50 % in 2011. Table 1.1 helps us understand the avenues of investment according to the NCAER survey. This table gives the distribution of investment in percentage of the total investment made by households. Avenues of investment in this table are us as part of investment classification in the current study.
Millions of investors buy bonds, mutual funds, equity, gold or similar investment products,for different purposes. The decision to invest in a specific assets class or classes of assets is primarily driven by the risk and the return associated with the product.
Any investment made carries certain amount of risk, which isthe uncertainty of return on the investment made or even losing the capital invested. There is no uniformity of opinion about the risk associated with a particular investment product across investors. What may seem to be highly risky to one investor may be considered to be average risk product by another investor. Evaluation of risk associated with a financial instrument may depend on the past experience of the investor, financial expertise or dependence on others for investment. These factors may drive an individual’s opinion about the risk level of a certain financial product. The perception of investors about the risk associated with a financial instrument ranges from no risk to very high risk in relative terms. The perception of investors towards different asset classes is captured in the current research using suitable questions.
For centuries women have been viewed as the caretakers of the family. However, as more women are either earning higher salaries than their spouses or taking on the role as the “breadwinner” of the household, that view gets a little more complicated. According to an analysis by the Pew Research Centre, 40% of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family – this number greatly increased from the 11% in 1960. These mothers who are the primary financial supporters of the family are divided into two groups: 37% are married and have a higher salary than their husbands while 63% are single mothers (“Breadwinner Moms”).
The role of women, both in the household and in business, cannot be undermined. It is also believed that the full participation of both men and women is critical for development. As more women become breadwinners and business owners who generate income and make financial decisions for their households, the power of the purse—and the market opportunity it represents—will grow exponentially (Hewlett, Moffitt and Marshall, 2014). The role of women in investment decision making in the family is also critical. Previous researchers have suggested that women, compared to men, tend to be risk averse, have a conservative investment attitude, lower levels of financial knowledge, lack of confidence and are dependent on guidance from others when it comes to investment decisions. Indian women, even after having their own investments, tend to rely on the advice of husbands. Husbands can play an important role in married women's investment decisions. This article attempts to highlight the role of women in investment decision making in the family. Existing literature related to women investors and role of women in investment decision making in family is presented at the beginning of this article. A questionnaire was used to collect the responses to get a better idea of how the spouse influences the investment decisions of a working woman for different investment instruments.
‘Investment Awareness’ is not an altogether new concept. In fact, it is very much discussed topic. Life of a human being is full of uncertainties. Hence, it becomes very much essential or is rather a necessity to save money for the future. Now, just saving money & keeping it idle is not sensible. Because, the value of money will get decreased. Hence the money saved should be invested; so that its value will get increased. Out of this need, various investment avenues have come into force. The risk bearing capacity of each & every individual is different; depending upon their age, income, perceptions & beliefs.
Today’s women are definitely financially independent. They are heading the important senior posts in various sectors. They are doctors, engineers, IPS officers, artists, professors. The list is unending. Hence, in the society, women are getting great respect. They have got financial soundness. But only earning high income is not enough. It is just half the battle won. The remaining & very much important thing is investment. If the amount earned is invested in the right manner, one can increase one’s wealth. As it is one of the objectives of financial management, wealth maximization is really very important.
As far as the Indian scenario is concerned, working-women here have started doing investments slowly. The percentage of working-women who take their own financial decisions for making investments is low. Many a times, they rely on their husbands or parents to make investment decisions. There is still a class of working-women who just don’t bother much about making investments out of their income. This is because their husbands are financially very strong & these female working professionals join somewhere with the sole intension of killing the time or they don’t want to sit at home idle. The reason for not making investments on their own might be male dominance in some cases.
No doubt, there is a class of working-women who are handling their own portfolios & getting good returns on their investments too. But the percentage of such class of women is a bit low. Such class includes mainly single mothers, divorcees, widows, unmarried women etc. This needs to be changed. That means more & more working-women should be financially aware & they should take their own financial or investment decisions. Then only the term ‘Women Empowerment’ will be justified in real sense.
Recent research demonstrates that there is an important difference between the investment choices of women and men. Therefore, examining the differences in financial decision-making between the two is relevant these days. By investigating the gender differences, we show important differences and this allows various economic agents to handle them. Research has already been done all over the world, but there is still a need for. To find this evidence we take questionnaires to investigate the different influencing factors of financial choices. We conclude that gender doesn’t have a great influence on the investment behaviour, but other factors like saving quota, risk and financial literacy.
According to Ellevest, an investment platform created by women for women, “of all the assets controlled by women, 71% is in cash – aka not invested.” Statistically, women are less likely to invest, and even those who do invest tend to wait until they are older to start.
Most women don’t think they know enough about investing to properly grow their savings; therefore, they wait to start investing until they feel they’re more financially stable and believe they can risk the possibility of losing money. A common misconception around investing is that you have to be an expert in the industry to succeed when the reality is that there are so many tools and resources that make easy to start investing with as little as your pocket change.
As a woman, the life expectancy is high as compared to males; hence it is very much essential to have enough investment to maintain the lifestyle throughout their lives. The main objectives of any investments are – safety, growth and income. The growth of money is important to fulfil basic needs in life and investing can help a person to meet long term life goals easily. Return builds and creates wealth over time.
• If we observe the current scenario of metro cities of India, we will get to know that the percentage of career oriented women is on the rise. Hence many women are such that they don’t get married but many a times they prefer adopting children & prefer to become single mothers. Now in such situations, they would need higher amounts of funds to meet the increasing needs arising out of the entry of the children to their families.
• Secondly, the number of divorcees is also increasing day by day. Now, in such case, again women should not only be financially independent, but they should have sound investment to secure their future.
• Thirdly, it is always observed that women are no risk takers while doing investment decisions. If they educate themselves well about investment avenues & the returns which can be availed from them, they can take important and bold decisions for making investment.