Everyone makes mistakes. That’s why we have the saying: To err is human. Thomas Alva Edison apparently made failed more than a thousand times before he invented the light bulb. If Edison himself made so many mistakes, it is not surprising that the rest of us make mistakes too. And when it comes to finance and investing, people make all kinds of mistakes: over confidence, lack of knowledge, not doing careful analysis before investing and so on. However, there are a few mistakes that are more common among women. Here are three mistakes you can avoid if you are a female investor.
- Transfer of control
India is a predominantly patriarchal society. When it comes to stuff like money, budgets and finances, men take the decisions in most households. As a result, even working and financially independent women can tend to transfer the control of their finances to their husbands or fathers. This needs to change. It is important for women to take charge of their finances and plan for their future.
- Fear of the stock market
For a lot of people, including women, investing in the stock market is synonymous with gambling. Many women tend to avoid investing in the stock market because they are afraid they could lose their entire investments. Agreed, investing in the stock market has its own risks but overestimating the risks can be a bad thing.
This is because investing in the stock market can offer you great returns over a period of time. It is important to take well calculated risks in order to earn the returns you need. A good way to approach equities is to invest first through mutual funds. Based on your investment needs and risk tolerance, you can invest in equity funds or balanced funds through Systematic Investment Plans (SIPs).
- Lack of funds for retirement
Retirement planning is an important aspect of financial planning. It can become a problem if a woman depends on her partner’s retirement plan, especially since women on an average have a longer lifespan than men. According to the Sample Registration System, men in India tend to live for 17 more years after turning 60. Women, on the other hand, live for another 19 years. As a result, it becomes all the more important for women to save for retirement. Investments in pension plans or long-term equity funds are ideal for retirement planning.
To err is human but by learning from your mistakes, you can become a better version of yourself. Or when it comes to investing, you can make more money for yourself. By overcoming these common mistakes, female investors can invest better and reach their financial goals in a better and faster manner.