The M2W Financial Freedom Survey reveals a fascinating paradox: women have bigger financial goals than men but a much lower risk appetite. Discover the three unique reasons women must change their investment behaviour, embrace equities, and learn to prioritize their own financial futures today.
When we conducted the Financial Freedom Survey at Milestones2Wealth late last month, I was prepared to see only limited participation from women. Having been writing on and doing interactions in the field of personal finance for at least 15 years, I have always found representation of women to be few and far between, when it comes to discussing money. First, there is this great divide of âworking womenâ vs âhousewivesâ. A good chunk of the population who donât actively earn a monthly income automatically cut themselves off from money conversations. Even a working womanâs story is surprisingly not very different. Many are still reluctant to spare a thought to money matters, due to lack of time and lack of confidence.
Like I predicted, the women participation in the M2W Financial Freedom Survey was on expected lines, with only 13% of the 379 participants being women. However, what stood out was their voice â loud & clear, and distinctly different from the men.
Here are three areas in which womenâs idea of financial freedom, their aspirations, their fears and the gaps are distinctly visible in the survey:
#1 No end to worries
As women, most of us have the tendency to overthink and worry about things that may never even happen. But nevertheless, we donât want unnecessary obligations and nasty surprises on our paths and always want to be prepared. This very nature is reflected in the responses. Almost 40 % of the women fear shortfalls during medical emergencies ( vs. 21% of men); Women are more anxious (41 % of those surveyed) about funding important milestones such as a home buy or childâs education/marriage than men (31%). Importantly, more women equate being debt-free with financial freedom and two-thirds of women worry they wonât be able to save enough for retirement compared to just 43 % of men.
#2 Big dreams
When looking at the big dreams women have, their anxiety over financial preparedness becomes more relatable. Nearly half the women consider financial freedom as the ability to travel around the world, compared to just 27 % of the men. 24.5% of women define financial freedom as living in their dream house/location, compared to 17 % of men. Thus, the fact that women are constantly looking to up their lifestyle is reflected in the survey. The lofty aspirations also show up in their financial freedom number. Women are shooting way higher than men here – a significantly higher proportion of women (22.4%) target a corpus of Rs 50 crore or more, compared to men (11.9%).
#3 Low risk appetite
For all the worries, lifestyle dreams and lofty financial freedom targets, whatâs happening on the ground hits hard. It is usually well-known that women perceive stock market related investments as risky and display a higher affinity for gold, real estate and debt products. This is reiterated in the survey results. Only 67 % women invest in stocks / mutual funds vs 89 % for men. In contrast, a higher % of women invest in FDs/post office/insurance vs the men.
Why urgent action is needed
Women have big aspirations, but the gap from dream to reality needs to be bridged. Three reasons unique to women warrant urgent action.
#1 We Put Others First
By nature, we are tuned to thinking and providing for others first and, most of us have not one, but two families for which we do this exercise continuously. In the process of taking care of everyone, you end up sacrificing on what âyouâ want to do in life. A promising career goes out of the window as other more important responsibilities become priority. And then, a comeback looks overwhelming. Even if you have managed to keep the job, saving for the childâs education / marriage, sending out money to parents or supporting their medical needs, sharing household expenses and home loan EMIs, all take precedence over saving something for yourself.
You love travelling. You want to do more certifications/ courses so that you move up the corporate ladder. You want to start your own business venture for which ideas have been brewing in your head since college. And finally, you dream of a life where you enjoy the freedom to do what your heart tells you to.
For all this, you need to put yourself first, save enough and invest well in equities so that compounding will work for you when you fall back on the money.
#2 We End Up In Unique Situations
One of the most common situations women find themselves in, is having to take a career break for childcare, eldercare, etc. Then, there are single women with children, women who are divorced/separated, women with deceased partners â the list goes on. Joint assets and liabilities become a point of contention in separation; Succession tussles happen when a partner dies without a Will.
All these situations are very unique to women. And when legal and financial angles join hands, it sends most women into a tailspin. In challenging circumstances, nothing but a comfortable financial safety net will come in handy to tide over most difficult of times. Even if you must start from scratch after a change in life situation, your investments will help you hold your head high. And building this safety net cannot be done overnight. It involves systematically thinking for yourself and putting your interest on priority at all times.
#3 Demographics Show Longer Lifespan
A third reason is that we live longer than men. Life expectancy for women in India stands at 74.4 years while for men it is 71.2. While the difference dosenât seem big enough to be taken seriously, remember, averages can be misleading. Look around in your circles near and far, you will get the proof. Secondly, WHO estimates show that currently, the women population in India starts outdoing that of men beginning with the 65-59 age bracket. By 2050, WHO estimates 13.4 million women in India in the 85+ age group vs. only 9.8 million men.
Thus, we need strong financial backing in our silver years to do away with dependency on children and live life on our own terms. Given the longer lifespan, it is heartening to see women targeting a higher financial freedom corpus than men. It is also equally important that we continue to use the compounding power of equities even after retirement and spend the corpus wisely so that we will not exhaust it within our lifetime.
Achievement
Thankfully, the survey reveals that women do recognize their knowledge gap when it comes to investment products and over half of them say their biggest obstacle is lacking the time to plan, review, and adjust their investments. Interestingly, an overwhelming 83.7% of women plan to overcome obstacles by improving their product knowledge or hiring professional wealth managers.
Milestones2Wealth is designed exactly for your need. We do all the work so that you can sleep in peace. We help you think in numbers and guide you towards achieve financial freedom by building your investment behaviour right. Better behaviour, better decisions, better wealth â is our philosophy.
Our Kodeeswari program, designed especially for women, is built to make money conversations simple, practical and judgment-free, so you can learn at your own pace. Kodeeswari helps you take charge of your financial future, whether you are just starting out, already earning, managing a family or investing without clear direction.
If you wish to join 8000+ investors who are already on their journey towards financial freedom with us, Enroll now!
