Housewife’s guide to managing money

The Indian household has an unwritten rule – that the quintessential home maker is the home minister (and perhaps also the Prime minister) and the bread earner being the default finance minister – the husband or the Karta of the house. Now while this has been as normal for an Indian middle-class household; an aspect that has remained hidden through times old and new is the fact that this home maker has always been juggling amongst many roles that she does with great alacrity is also that of being a finance manager.

This aspect seldom comes out since it has never been the main job of the homemaker; her main job has always been to run the operations, human resources, food & beverages, travel & transportation, education, social & media, entertainment, design & development and many more. The one department that is run without much hullabaloo is the finance department since it is the domain of the Karta. Now we are not really stereotyping as modern women have come of age with their finances but generally, women financially aware too willingly pass this domain since there is the main rudder to take care of.

Having said this, the home maker does a silent function in the domain of finances for any household and the following roles as a finance manager ought to be taken as seriously by persons running their personal finances.

Role of the liquidity manager – in this role the home maker’s ability to manage two types of liquidity challenges, depending upon situations need highlight. The tactical one and the strategic one. In the tactical situation the ability to manage the month end low liquidity by having kept reserve cash from previous month’s surpluses, side pocketing and deep valets needs special mentioning. In the strategic situations, the ability to thus dig for hidden side pockets to tide over immediate high demand for funds by dipping to savings / local chit fund activity and access to peer network for deficit funding are extremely crucial. This role is under appreciated and such techniques though widely known are hardly used by individuals in the households who are in-charge of finances. We would go to the extent of saying many frontline money managers seldom use these basic practices and thus end up becoming sitting ducks. So, pat the home maker for this crucial but underappreciated role.

Role of the Risk manager – this is the supplementary role of the liquidity manager for the family. In fact, the role of being a risk manager is of greater value than being a liquidity manager, since being a risk manager averts major catastrophe that might befall a family. During such critical times, the ability to tide over the financial crises becomes foremost. In this role of the risk manager, the homemaker – by methods of side pocketing, hidden box savings and above all, diversifying the savings and investment pattern can significantly control risk. A case in point here might be the penchant of buying physical gold (ornaments and/or coins etc), silver etc. on a recurring basis (festivals / functions) which has been accumulated over a long period adding to significant reserve. This helps to tide over a financial crisis. This apart, the home maker’s ability to stick to basics on managing personal finances are fundamental part of risk management. On this count too, in general, home makers score higher marks on managing financial risk for a family.

Role of the planning and budgeting department – this role come as naturally to homemakers as fish take to water. Be it managing finances on a day to day basis, or for functions and special occasions. Planning and managing the budget however tight things might become is one aspect that seasoned finance manages need to learn. How do home makers, plan, anticipate events, the expenses and prepare for the occasions is something that needs to be inculcated by all. However, small or miniscule the cash flow or cash at hand might be, the home maker would fit the expense to suit the budget at hand. Tactics such as bargain hunting, discounting skimming, substituting and many other methods come quite naturally to them. Individual can learn a lot from them in terms of how budget and expense management should be done.

Role of the financial planner – this role therefore is a logical end to all the things that the home maker does on a routine basis. The ability to think strategic when it comes to financial planning are worthy of note. For instance, planning for retirement and keeping dry powder for a rainy day is something could come by instinct we believe. Though home makers might not be consciously planning the goal planning activity but at a sub-conscious level there is always keeping the retirement planning and kitty building or coaxing to do the same. So, don’t ignore that sane advice. Second, the shorter yet important goals like keeping aside money or accumulating the same for her children’s education even if it means doing spending cuts on other expenses are done with purpose.

So, look around you and you will find a home maker who has done all the above and more. It is time to learn the nuances of how and why things are managed and there are over a dozen things to keep in mind while you do your own financial planning and achieve your financial goals. Just remember the two rules. Do the basics just as the home maker does and concentrate on the various roles she does to find out how it is clicking.

What is the best time to exit my stock options?


* Many clients come to me on how they get it wrong.
* By selling when it goes up, they don’t have the opportunity to sell at the options peak. Sometimes this turns even worse if the market cycle is down in the long term.
* Objectives
– To get the highest price.
– Phased exits by diversifying and monitoring resistance levels.
– Convert paper money to real money.
– It’s very rare that a sector maintains superior return.
– Risk – Working in the same sector.

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Fixed asset allocation vs dynamic asset allocation Which is better?


Fixed asset allocation vs. dynamic asset allocation. Which is better?

Having the right asset allocation has been proven to deliver the best risk return

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* – At Right Horizons we like to look at a dynamic risk allocation.
* – Based on your risk profile you need to arrive at the appropriate asset allocation.
* – As the market goes up – lower asset allocation
As the market falls- higher equity
* – This manages risk better as well as delivers superior performance

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Market volatility with changes


What are the different ways to manage market volatility. There are three ways to reduce risk : firstly, you can reduce risk by diversification. As the saying goes, do not put all your eggs in one basket.

Market volatility with changes.

* The second way to reduce your risk is by increasing the tenure.
– Eg. If you looked at the sensex from inception and calculated the returns on a rolling basis, there was about 35% chance of losing money for a 1 year basis.
* However, if you increase the tenure, to 5 years, you would have lost only about 9% of the times.
* Finally, you can reduce risk by spreading out your investments. You can do this by systematic investing.
* So, if you logically put these two statistics together, if you invested in the systematic mode with a 3 year perspective, the chances of losing money is very very low.
* That is why we believe that disciplined investing in equities with a long term perspective is a recipe for great returns.

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What is the ideal retirement corpus one should have?

ideal retirement image


What is the ideal retirement corpus one should have?
– The retirement corpus that you require at retirement would differ from person to person.
– The corpus required would depend on several factors. It would depend on what is the monthly income that you need at retirement. We have clients whom we support with Rs 50K a month and we have customers whom we support with an income of Rs 5 lakh a month. One way to do it is to look at your current monthly expenses and adjust that for inflation.
– The other factors that go into computing your required retirement corpus is the tenure to retirement. Some of us may want to retire early, and if the tenure for which you require monthly income goes up, it again increases the corpus required. Many clients of ours choose to retire early to either pursue their interest which could range from entrepreneurship to working for social impact.
– There are other assumptions like inflation rate and the rate of return that would impact your inflation. What most people miss out is the impact of inflation post inflation. If you need Rs 1 lakh per month as of today, in the next 8 years that is likely to be Rs 2 lakh per month. At the 16th year, it is a staggering 4 lakh a month.
– Let me give you an example- a 40 year old person looking to retire at 60 years would require about Rs 3.5 to 4 crore.
– Since most of the time, this is a long term plan with many assumptions, we normally review where we stand against our goal every 2-3 year. As we come closer to the need, this helps us refine our assumptions.

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Golden days for Gold

Golden days …

I remember those days,?

One day I was just searching for something like a letter in the cupboard of my bedroom.

Suddenly I found that something has fallen from the top of the shelf.

It was old & covered with dust.

I cleared the dust on my dress and observed it clearly.

An instant smile lit my face,

And a pleasantly surprised look too.!

It was my mom’s wedding photos

I forgot what I was looking for, and got immersed into these photos.

As I kept turning the album, I noticed the date 5/1976

I was so surprised.

My mom looked so beautiful in her bridal saree,

She had worn beautiful traditional earrings complemented with a beautiful necklace and adorned with hands full of jingling bangles,

Mom “Pawan what are you doing up there? “

ME: nothing mom, I just found some treasure!

No reply from mom

I found a paper and realised it is an old bill

The bill was dated with 5/76 (i.e. May 1976)

source Image is capture with 2 MP camera phone

But honestly, most of us don’t know how much the price when our father and mothers purchased gold in those golden days

Gold prices are expected to increase going ahead. The price of 24-carat gold has dropped by Rs 430 today.

Currently, 10 grams of gold in Hyderabad is priced at Rs 36,160. Market experts say that despite the strong trend internationally, demand from jewellers and retailers has slowed and the price has been adversely affected. At the same time, the price of 22-carat gold also fallen by Rs 230 to Rs 33,150.

The silver price, on the other hand, has remained steady. The price per kg silver is stable at Rs. 44,965. This is due to the lack of demand from industrial units and coin makers.

How many of you know the gold rate in golden days

For my readers here it is:

From 1925 to 2014

10 grams of Gold Price in Golden era

I hope Now we know the value of Gold
Let me give my conclusion

Going by the above data and past trends, How many of you expect the the “Gold Price” to Increase the cost ?

Based on these images can you imagine in the next financial year or next upcoming quarter?

The answer is “NO”

Not only in Gold prices
We have so many platforms which are gradually changing the graph every day/month.
Like Mutual Funds, Economy, Real Estate, Portfolio management services, Financial Planning etc.,

Likewise, in the market there are only a few companies who had more than 15 years of experience in the same domain and having the customer’s satisfaction rate more than 95%+

Ex: Right Horizons Financial Services Pvt Ltd.

Talk to our certified “Senior financial planning advisors and wealth managers”.

Bring back this beautiful smile in your golden years. Start planning for your retirement now.

Talk to our certified “Senior financial planning advisors and wealth managers”.

Call us +91 98453 99780

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Follow us
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Email : contactus@righthorizons.com

Whatsapp : +91 9148096684

Hey Woman! Take Charge Of Your Finances To Be Truly Independent

Take charge of your finances

Some Facts and Stats

  • Lack of sufficient funds and home responsibilities largely come in the way of women’s aspirations to start their own business/venture as per a study conducted by Nielsen for biscuit major Britannia.
  • A whopping 4% of women do not have a medical cover as per a survey conducted by Economic Times. Many separate studies across Indian states and cities have shown that women are wary of investing in the equity market.
  • On the positive side,
    • The number of Indian women investing in mutual fund schemes and stocks is on a rising trend which is a good sign.
    • 27% of the stock market investors are women.

 

Indian women have come a long way in terms of education, independence and self-identity. But the tendency to leave financial decisions in the hands of the men in their lives – son, husband, father is still quite prevalent. Though this has been changing, it is important that more women take charge of their financial life as there are many indicators that women are good investors – Why?

  • Indian women are historically and culturally well-versed with saving. Women save more and therefore can invest more.
  • Women are more risk-averse as compared to men. Therefore they perform in-depth research before investing their money. They stay away from risky products.
  • Women have more self-control. They are less prone to impulsive trading and over trading. Overtrading usually results in reduced performance portfolio.

 

But on the other hand, there are certain weaknesses that are inherent in women investors –

  • They are very conservative investors and this can lead to reduced overall portfolio returns.
  • On an average, women earn less. They also take breaks in their career. This leads to lesser funds available for investment. Since there is a smaller kitty, they prefer to invest in debt products which are secure but give less returns
  • They are busy with too many responsibilities of family and work that they do not find time to manage their finances.
  • Women are not part of discussions related to financial matters in social realm as some feel they do not know anything. Sometimes they are not included as it is assumed they do not know much. These discussions are sometimes closed men’s clubs or informal networks; which are not easy to get into.
  • Women are hesitant to ask for raises in salaries. They underplay their skills and achievements while negotiating for a pay package.
  • Women let emotions rule and end up helping friends and family financially without considering the dent it would do to their financial portfolio. It is of course good to help others in need but not at the cost of putting yourself in financial peril.

 

Women  have to play to their strengths and overcome their weaknesses and gain financial independence. Here are some steps that you can take to get involved in matters of personal finance –

  1. Get involved in the finances of the household by managing a budget. It is the simple task of tracking income expenses and savings. You will get an idea of how much is the monthly expenditure and if you can cut back on some expenses.
  2. Read up on personal finance. There are many personal finance websites and books that can be referred to.
  3. Start investing small amounts in different financial products with the guidance of an experienced investor or financial planner to understand how investments work, the returns and tax implications and tax saving opportunities.
  4. Set up financial goals and work towards achieving them. You will be really proud of yourself when you achieve it and gain confidence in financial matters.

 

Make your financial resolutions this Women’s Day to be truly independent

Key takeaways:

  • Women need to participate actively in financial matters. 
  • Personal financial freedom should be every woman’s goal.

 

This women’s day, Right Horizons offers a FREE financial planning session for women at Dialogues cafe, JP Nagar on March 9th, 3-5pm. To register, write to us at contactus@righthorizons.in or 9845399780.