Why It’s High Time For Indian Women To Learn Personal Finance?

Indian households, more or less, continue to retain their patriarchal image where a male member gets to flex his financial muscles. Many believe that women will learn about personal finance eventually as their participation in the workforce continues to rise. Regretfully those beliefs are largely unfounded based on statistics that indicate consistent fall in the percentage of working women in India. A report from the International Labour Organization evidences the fact, highlighting 10% drop in women workforce since 2005. 

Even majority of working women appear to be reluctant in managing finances as they personally feel less confident about the subject matter. The role of Indian women is largely restricted to bill payments, monthly budgeting or at the most managing individual taxation while a male member of the family calls the shots on investments, insurance, savings and other financial planning aspects. A trend that explains continuity of sub-par financial literacy among Indian women. 

The continued indifference to finances is harming Indian women more than ever, leaving them vulnerable to long-term results of ongoing social changes. Let’s look at some of these changes that command increased preparedness from women on the financial front. 

1. Extended maternity leave - Women often require extended maternity leave over and above the company provided leaves to ensure the well-being of their newborns. A majority of working women either take a sabbatical or career break to raise their children. However, there are some women who do not enjoy privileges to be at home due to financial commitments that overlook them. At these times, a well laid out plan before entering motherhood can take care of the financial commitments during the extended unpaid leave without compromising on the care of the infant. 
2. Looking after parents, spouse or children- Many women want to financially support their parents and look them through their retirement years. Unforeseen circumstances like losing a family member or critical illness of spouse or parents might force women to shoulder the entire financial burden of a family. Thus, awareness about financial matters and a well-implemented financial plan right from the beginning can systematically avert financial troubles during uncertain times. 
3. Higher life expectancy - Several medical studies have found that women tend to outlive men. Thus, retirement planning without considering this aspect may prove to be futile. Women should provision enough for themselves that can help them cover their extra grey years. 
4. Increasing divorce rates  - Divorces are mounting in India every passing year and its best to take financial matters into own hands if separation seems inevitable. Addressing financial complications early during a rough marriage can go a long way in securing one own's financial independence later. 
5. Changing the image- Active participation of women in big-picture financial planning can effectively inspire others in their social circle and family.In fact, by starting now women can set an example for future generations and shed off the label of “the female financial paradox.”

Women participation from workforce might be declining but it’s never too late to fix this shift. If the thought of comprehensive financial planning is in itself overwhelming then it’s time to remind the incredible efficiency with which women manage a household budget. Several studies have already concluded that women are better money managers than men, which should leave no room for doubts on the abilities of women power. 

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. She is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

Visit www.facebook.com/Inverika to learn more.

Land Vs Flat - What Should Be Your Second Home Investment?

Buying a second home for investment purpose is not only common but appears to be the next logical step for first-home owners. Everyone wants to settle their debt on the first home and move ahead to buy another that can become a dependable income stream. However, such investors seem to be divided when it comes to choosing an apartment vs land as a preferred investment alternative. 

Where land gives ample freedom to the investor to utilise it in numerous ways, restrictions apply in a case of an apartment or flat for its limited use. At the same time, a flat is seen as more secured than a vacant land that is exposed to litigations. 

In an effort to understand the appropriate mode for second-time buyers, we will try to look at the advantages and disadvantages of investing in land vs flat here.

Areas of concern	Land	Flat
Investment Cost	Dependent on proximity of land to main areas, particularly those under development	Varies from locality to locality. Price can be high for gated communities than standalone flats
Recurring Cost	Indirect cost involved in protecting land from illegal encroachment or litigation	Maintenance or society cost is applicable and increases with passing years
Financing	Banks do not offer loan to buy land	Loans are readily available for flats/apartments
Return	Non-disputed land easily appreciates in value	Flat/apartments witness slow growth after certain number of years for their limited life span. Other factors like water availability and road connectivity plays important role in determining value
Source of Income	Rental income is low but myriad of options are available to utilise land	Rental income is high for a ready-to-occupy flat. Flat owners do not have many options to use their investment other than giving it on rent.
Risk	Highly risky as it is exposed to illegal encroachment or litigation	Less risky due to operation of modern laws. However, quality of construction and delay in possession can entail risk
Liquidity	Land is highly liquid due to excessive demand	Flats tend to lose value over a period of time and are not as liquid as land

When Is Land A Better Option?

Buying land makes sense if it is meant to be used for building a self-occupied home or for personal use. If not for personal consumption then a piece of land can also be used for commercial purposes, however, location of land is yet again an important factor to this end. 

When Is Flat/Apartment A Better Alternative?

If the purpose of an investment is solely to hold and resell then flats outweigh land as an investment due to demand for residential properties. Further, depreciation on construction value is minimal during early years post-construction. Over and above this, a flat is a convenient investment option for those who do not have time to look after their property or want regular income stream. 

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. She is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

Visit www.facebook.com/Inverika to learn more.