Podcast Overview –
How should you start your investment journey as a woman in India? We sit with Avanti Doshi from Proinvest Nirmiti where she works as an investment manager. Know more about investing as a woman from Avanti Doshi in this podcast.
Transcript
[00:00:00.310] – Avanti Doshi
Welcome to Swatantra. In this podcast, we are going to go deep into personal finance for women. We’re going to try and decode everything that there is on how women can get on top of their finances, managing money, investing their money and becoming finance financially independent. So I’m going to welcome our partner, my partner, Avanti Doshi. Avanti Doshi has a very interesting background. She comes from the healthcare industry as a dentist and has now transitioned into managing personal finances and the investment world. So before we get started on talking about why financial independence is important for women, Avanti, maybe a quick overview of who you are. And I’m kind of very curious how you went from becoming a dentist or being a dentist to now joining the investment world.
[00:01:04.880] – Avanti Doshi
Hello everybody. I’m Dr. Avanti Doshi. I am actually a dentist by qualification, but since last few years I am in this world of finance and financial planning. The transition actually happened when I had my second child. I wanted a little more flexible hours because I was not able to focus on full-time working. So that is how I transitioned into this new world of finance and which I feel is very important for women. Because as women, we are not really taught anything about finance. And we have been told that this is a very complicated world and it is a man’s field. Only your father or your brother or your spouse can take decision. But after being in this field for so many years, I feel that as a woman, you can actually be actively involved in your own finances.
[00:01:55.240] – Darshan Doshi
Yeah, so it’s very interesting you say that last part. I’m going to broaden that a little bit. In my experience, we are anyway not taught about personal finances and how to beyond earning income through job. There’s not a lot of emphasis laid on managing personal finances, which I think we want to focus on and that is why we have started Swatantra-Simplifying Investing, right? We are extending that to women where the problem is even more acute. The problem is even more exaggerated, if I may say that. A quick stat. I was reading this article in which they’ve done a research around Indian women. Only 18% of Indian women are actually in the workforce as compared to men, which are three times. So the first challenge is how many women are at the workforce. And we are one of the lowest as a country in the world. Now it becomes even more problematic, or a challenge that as a society we must face is out of these 18% women, only 70% women are cognizant and on top of their personal finances. Now you can say, well, 70% women are actually taking control of their own money. That should be a good thing, right? But to what extent and what are they doing about it is something that I’m curious to learn from you. So my first question to you I’m completely into financial independence. And so why is financial independence important for women even though when they may be well off? What I mean by well off is they could be at a job, they could be earning money or they could be housewives taking well care of, from a personal finance perspective, at home. Now these are the realities of our society. So if that is the case where they are well off, why should they think about being financially independent?
[00:03:42.450] – Avanti Doshi
The Indian economy is evolving and the next generation is also doing so well. Everybody is really able to manage their own finances and women are managing businesses as well as homes. They are actually balancing and trying to balance each aspect of their life. And if you see even our financial financial minister of India is also a women this time. So why should women be left behind? They should not actually think that it is a man’s world to manage the finances. It is very much their own thing. And this is one important thing which this COVID pandemic has taught us. So many men have lost their jobs or they got salary cuts or they will lose their lives. So many close friends have lost their husbands in this pandemic and suddenly they were faced with this huge challenge that now what am I going to do? As a woman she was completely lost as to now what is going to be her next decision for herself, for her children, if she has any, for the husband’s parents also. So I feel this pandemic has really broadened the perspective and it has opened everybody’s eyes to accept this challenge of managing their own personal finances, is what I feel. So like he said, even if the woman is well off, but in case of crisis, she should be well aware about her finances, is what I feel.
[00:05:02.970] – Darshan Doshi
Yeah, I think you touched a nerve actually. COVID exposed so many vulnerabilities in families, in individuals and in the society. I think one thing COVID has exposed is you don’t know what’s going to happen and living a long life is not a surety exactly. There are a lot of uncertainties in place, the worst being death. And death kind of helps you keep the most important thing at the forefront. And so the number one need for women to get on top of their personal finances is even though you might have a spouse or a father or a brother who might be helping you with managing your money, you should be able to do it independently. In the same research that I was reading, there are two things that come out to me. One was at the age of 35, women who are below the age of 35 are focused more on increasing income. They just want to set financial goals. Their financial goal itself is to increase income. And women above 35 are kind of said post COVID, let’s get an emergency fund in place so that I get at least a year or a two year breathing space to get everything sorted right. So that, I thought was very important. I’m going to continue asking you on this question, what is financial independence for a woman? You’ve explained why it is important, but what is it? What does it really mean on a day to day or a year to year basis?
[00:06:32.550] – Avanti Doshi
See, there are some phases in women’s life two important, that come to my mind is that when the woman is going to get married and the second phase is when she has children. This is the time when her income is actually going to dip. This is the time when she needs this emergency fund for herself, not just for the entire family. She may have a husband who’s earning at that time, but to have that corpus for herself is very important. So after marriage, you have a certain amount of uncertainty whether you may be shifting to a different city, you may be taking a break from your job for a few months. So what I feel is that even if you’re earning enough, you’ve never saved it or you’ve not invested it into anything. So as soon as the woman enters the workforce, not just getting that money, but actually investing it, is very important. From her first paycheck, she should start investing it in a financial instrument, which currently which is one of the safest and easiest right now, is what is commonly known as very famous called SIP- Systematic Investment Planning in the mutual fund. Mutual fund is basically a professional fund which is managed by professionals and it is one of the safest thing that you can do. So from her first paycheck, she should start investing it. So generally, a woman will start earning at about 24 years of age and by the time she gets married, it is about 26-27. So she has that two years in hand where she can start with something as basic as Rs 5000. And if she puts it in a good fund with a good return, she will have about two to three lakh rupees in her kitty, which she can use in this period of uncertainty post marriage. And the second phase which comes is when she has her children. She has her children and that is the time she definitely doesn’t want to be dependent on her spouse because there’s already so much of emotional and hormonal changes happening to her that you don’t want to be in financial crisis on top of that. So you generally have children at about 28 or 29. So again, she has about three, four years. And if she starts with basic Rs 5000 to Rs 10,000 depending on her salary, she will definitely have some corpus ready with her. Mentally, she knows that she has a fund ready and it is invested. So she has a buffer about of six months to choose what she wants to do after she has her kids.
[00:09:03.540] – Darshan Doshi
Brilliant. We’ll go deeper into that. But before we go there, I know when you transition from being a dentist into the investment world, you did your own research around personal finance for women. I’m curious to understand what this research was. What did you find out? What were the things that you thought were wow, I could never imagine the problem was such a big problem or this is actually a good thing that’s come out right, positive or negative. So just curious to understand what was this research, what was the outcome, what was the insight that you got out of this?
[00:09:38.130] – Avanti Doshi
In your graduation level you are never taught about management at all. You are just focusing on the subjects that you are learning. Something like in dentistry we are not really taught how to manage anything, not just money. So when I first transitioned into this, the first thing I did is that you have to plunge into it, you have to invest yourself, just Google the top schemes, just take the plunge it’s like swimming, just dive into the pool and that is the only way you can learn swimming. Similarly investment journey you can only take when you invest your own money that is the time when you actually start looking at the market. So I just chose the top fund that time I think it was the HDFC or top 100 fund that was the most popular that time so I started a basic SIP of Rs 1500 that time and then once I was invested in the fund, I opened the portfolio, I knew what all stocks HDFC top hundred fund is investing in and that is how I started looking at it. Each stock then every day I used to follow only those stocks so that is what you should do and after that SIP that I started, I could actually buy the engagement ring so I didn’t really have to depend on my mother to buy it so that was a big achievement so with a small Rs 1500 I could just buy a diamond ring so that’s like a huge thing. So the first thing is that you just Google the best scheme, follow that scheme every day, just read what all stocks that scheme is invested in and that is how you’re going to learn about it just plunge into the market.
[00:11:19.230] – Darshan Doshi
Brilliant.
[00:11:19.810] – Avanti Doshi
So recently I conducted an online survey in the middle of this pandemic in which I wanted to study the impact of gender on the decision on financial planning decision that which gender would actually take this decision. So I got very interesting stats. About 40% women said that they have actually penned down their financial goals and on asking this question, 26% said they will think about it in the future that they will think and jot down their financial goals. About 53% women are actually open to taking help of a financial planner as against only 35% men said that they would actually take help from a financial planner. And on asking this question, almost 26 women said that they will also think about taking help from a financial planner. So that’s about 75% women who are ready to take help of a financial planner. That means they do have an inclination to get in control of their finances. And there was another survey which was done by script box which also said that during this pandemic about 70% women have said that they actually researched and Googled about financial planning, about personal finances. So that’s also a big step.
[00:12:37.160] – Darshan Doshi
I think it’s a great step forward and not at all surprised by the stat about men and their ego in terms of reaching out for help. That’s just on a lighter note, I’m sure there are enough men as well who know what help they need. Now let’s switch gears a little bit and get into how part of it, we’ve covered the why, now let’s get onto the how part of it. Women or men irrespective, how does a person get on top of their personal finances to get on top of it and have control over their money? What would you say?
[00:13:12.540] – Avanti Doshi
See the traditional way of investing so far was looking at the benchmarks like Sensex on Nifty50 but your personal financial life is not going to be dependent on the market. If market says go for this year, my goal placed in that year itself, that’s not going to happen. So when I took this transition or when I changed my profession, I didn’t really bother whether the market was in bull run or it is doing too well. I first focused on my own personal goals. We as a family wanted to invest towards our goal. So we actually sat and jotted them down that what are we as a family investing for? What is our time frame for those goals, how important those goals are for us as a family and how much is our time frame, how much time period do we have to actually achieve them rather than focusing on the market. So in this way we know how much risk we can take, what returns we want. That was very important. And how long is my sabbatical going to be? I mean if it’s going to be little extended I need more emergency corpus. So in that way we can invest in that way.
[00:14:29.860] – Darshan Doshi
Right. So this is good. Okay, one is kind of understanding how do I get on top of my finances, know what your goals are. Now let’s go down that road a little bit. What are typically the financial goals and can you make it specific for women?
[00:14:46.150] – Avanti Doshi
So even in my survey I actually asked them what goals they want to plan for. And again a very interesting finding I got that many people actually want to plan for vacations. Emergency fund is something which I thought would be their priority or retirement. But about 50% said that they do want to plan for a yearly vacation. So people have varied goals. So let me just quickly jot down the goals that you can actually plan for. Emergency fund is the first one which was actually ignored, that they don’t even know what is emergency fund. So basically emergency fund is something you need to have in a very short while you’d be able to get that money in a liquid fund or something which is very liquid. So we recommend about three to six months of your monthly income rather than expense. Generally people say that you should have three to six months of your expense. But we feel that you should have three to six months of your income in a liquid fund depending on your lifestyle. Okay, yeah. So this is something, first of all we plan for is emergency fund. The second one is your children’s education. That is very important because the education inflation is really high. Every year there is about 11% rise in the fees. So by the time they reach the undergrad level, it’s going to be tremendous. So you can actually plan for even if you’re just married and you don’t have kids. There are many people who have come across that they have actually planned for even before they have kids. So that’s something which is really good and which you should really think about it. The next thing is children’s marriage is something even if it is very far off, you can plan for and also I said like early vacations, you can plan for it. And retirement is something which again is ignored in India because it is very long, it’s a little far away. So they don’t really think, they say that okay, we are investing EPS, PPF, we are doing MPs, but they are not actively they don’t know how much they want as a retirement corpus. And another trend that we are seeing these days is early retirement. The people want to retire early. So they want to actually some there is another set of people who actually want to plan for retirement only because they want to retire early. So when we ask them about this, they say we don’t want to retire as in retire, but we just want to retire from an active nine to five job. So they are planning this small investment corpus which they will need in that transition phase when they want to go from an active nine to five job to a consultancy or a freelancing thing. So they want to actually plan for this.
[00:17:27.750] – Darshan Doshi
Brilliant. So those are some financial goals and you need to have a number against it. You need to start investing based on those financial goals. Your investment vehicle needs to be different based on your financial goal, whether it’s short term, immediate, long term. You made a very interesting point around emergency fund. About 33% of people, men and women, kind of give research in india, which said post pandemic, they’ve actually put emergency fund as one of the top priorities or the top financial goals. Now, whether that’s three months, six months, twelve months, it’s different. But emergency fund is what it says. Emergency. You don’t know what life is going to throw at. You might get fired from a job, you might lose a close relative. Anything could happen. And so at that point of time, you don’t want to do things because you need to earn money. You want to ease the pressure off a little bit. And on the other end of the spectrum is retirement or children’s wedding. That’s so far off. But that’s very typical and heavy cultural. Coming out of India. You wouldn’t see an American typically think about it this way. So if we live in India and we are Indian, then we need to create financial goals based on who we are, rather than copy paste the American or European method to the Indian lifestyle. Right? It shouldn’t be that way. Now, let’s go one step deeper in this. Okay, my next question to you, Avanti, is on a day to day basis, what should one do? What are the habits, what are the routines that can help connect the dots between here’s, my financial goal or yours, where I want to be financially independent. But what are the things that I need to what are the building blocks that I need to do today or every day or every week? Can you just walk us through that?
[00:19:24.270] – Avanti Doshi
Yeah. So in older times, women, everybody used to actually write down their expenses and their income, which is not so commonly seen these days. So what I feel is that first you should write down your monthly income. By income, I just don’t mean salary. There are other ways also that you are earning that in that month by rental income, by interest, by dividends that you’re going to get for that month. So make sure you jot it down. The second thing is expenses. How much are you spending, how much is your necessity and how much is your discretionary expense. So start by doing this daily, every day. Please note it down. And the third thing that you should know is your liability. You should know what kind of loans that you have taken and how much part of your salary is going in your EMIs. Many women are lost as to how much the loan has been taken by their husband. By loan, I don’t mean just housing loan. There is car loan, there is credit card loan, there is personal loan. There are so many loans which are taken and which the wives are maybe not aware of.
[00:20:29.140] – Darshan Doshi
So getting on top of that is very important, especially when you have a partner who you are living with. But understanding and getting transparency from your partner on what are the liabilities, because ultimately it is going to come at your doorstep.
[00:20:43.840] – Avanti Doshi
Exactly. So knowing about your liabilities also lead us to a very important point is does your spouse have a good insurance? It is not like the olden times where your relative is just coming to you and saying I’ve just got into the insurance business and I want to just take an insurance policy. That is not how it works anymore. Insurance is a very personalized thing. It has to be as per your requirement. So this whole exercise that we did of jotting down the goals, doing the cash flows and knowing your liabilities, all this will give you your insurance need. So you have to know how much loan is left and based on that your insurance can be planned. It is no longer random, it is extremely personal. Another very important thing in insurance planning is the dependency. For a time period there is only a single earning member, the dependency on his salary is more. And plus on top of that, if you have some liabilities then it gets even more. So in insurance planning you also see how much the family is depending on the salary of that one person. So that also you need to plan for.
[00:21:55.430] – Darshan Doshi
Absolutely.
[00:21:55.970] – Avanti Doshi
Another one thing that women are completely unaware or partially unaware is the taxes. How much tax are you paying for that year? They find it is extremely complicated and we have actually not been taught about it at all and no discussion happens over it. And Indian taxes system has become so simplified now. On the website you will find so many sources which you can read on after every budget, each bank, each insurance company publishes its own tax reckoners. So just get hold of them, just start reading them. And another simple thing you can do is that ask your husband for the previous year’s ITR returns. It’s like a one big PDF which the government sends you. Even if you just go through that PDF you will gain so much knowledge about your finances for the previous year, where you have invested, how much you’ve invested, how much is the salary, how much is your liability, how much?
[00:22:51.650] – Darshan Doshi
I think on that a good practice is really catch hold of your husband or brother or father or your chartered accountant and just say walk me through, I didn’t understand this. You know that one hour can be your own education on what is taxation and how it works. You do that over two, three times, over two, three years, you’re going to be on top of what it is and how simple it is. And it’s not really does not need to be complicated. And this black box unknown the thing we have to fear a lot about. So I think you raise a very important point around taxes but also understanding at what areas are sitting down with your Chartered Accountant because you’re trying to get on top of your personal finances and there are only two things that are certain death and taxes. So if you are earning money or you want to get on top of your personal finances, you can’t turn over an eye or a leaf over taxes. You have to get on top of it. All right, so we come at the last part of our podcast, Avanti. This has been fantastic when it comes to investing, managing personal finance. Now you can’t have a conversation of personal finance without talking about financial advisors. You’ve talked about going to your chartered accountant and figuring out taxes. But when and how should women engage with financial advisors? Should it be with their partners husbands or should it be independently? How should they go about it?
[00:24:20.130] – Avanti Doshi
What I have seen is that when you are planning during a financial planning exercise, it is always better that the couple comes and meets the financial planner. You have to go with your spouse or your father or your brother and get to know about who is investing or who is handling your money. That is very important. So in case of any unforeseen circumstances, you know who’s your point of contact. So what I have seen is that usually the financial planning exercises that I give an Excel sheet which they fill about all this cash flow, what we spoke about right now. And when I have women on board in that meeting, it just gets concluded in that one shot. Because they know their financial, they have their goals in their mind. We just think that they don’t know or they are unaware, but they just know what goals they want to plan for, which was also seen in my survey. So the meeting gets done very faster because as women, they are very goal oriented, they’re very detailed oriented. They have the figures, they know what they want to plan for. It’s just that they are not being given the opportunity. So in the financial planning meeting, it’s always better that a couple comes in and discusses because it’s after all, they are planning for the family. So it’s always better that they plan it together.
[00:25:37.770] – Darshan Doshi
So this has been an awesome podcast. What we kind of say is get on top of your money. You should be in complete control of your money. You can’t outsource it, right? We want to simplify investing and investing financial independence. This is important for individuals, whether you are a man, woman or as a couple, as a family, you just need to get your finances in order. And that’s why we’ve launched this podcast series. What questions do you have? Are you managing your own money? Are you investing your own money? Do you have any questions? Have you kind of got stuck somewhere? Just put that in comment and we’ll bring a podcast or the relevant video, topic, conversation expert for you. Lastly, make sure you subscribe to this YouTube channel. Like it, share it, give us some feedback, send us some love our way as well. We’re doing this for you. And I’d love to hear from you. Until the next time. Thanks.
