Authored by Prabhakar Tiwari
Are you young and single? Then you must start thinking about how to retain your financial independence in the long run. Financial Independence is not just about earning a hefty amount, contrary to popular opinion.
You need to plan, invest and manage your finances in order to be financially independent throughout your life. If you are a young woman, you need to know that financial independence comes with good education, sound financial planning and smart investment.
Quality Higher Education
Higher Education is needed for employment in the organized sector of the economy and to earn a stable and high income. Hence, young women must invest in college education and try their best to study at a quality institution in order to launch their careers. Young women need financial literacy in order to manage their finances. It will be difficult to manage finances without basic education and preliminary knowledge. Hence, if you are a young woman, you need to educate yourself about basic financial management.
Firstly, you need to be clear about your financial goals, be it children’s education or post-retirement standard of living. While preparing your financial plan, it is necessary to factor in inflation. Although you can consult a qualified financial planner, doing your own research is highly important. You can browse through the information on financial instruments on authentic websites.
Do not fall into the trap of opting for the same financial plan that others are choosing. You need to select your own customized financial plan according to your risk appetite, financial goals and life-stage needs. Besides a realistic assessment of your financial goals, you need to plan for unforeseen crisis events such as divorce, death, etc. It is crucial that you retain your financial independence even in the unfortunate case of an unexpected tragedy or crisis.
If you have just started your career, you also need to begin investing in both short-term goals and long-term goals. You need to make sure that the instruments you invest in do not require you to borrow more than necessary. For smart investment, you need to make sure that the risk is distributed over a variety of instruments. A high-risk instrument such as equity must be compensated with a stable one such as bonds.
Your investment corpus should be a prudent combination of equity, debt, life insurance, real estate etc.
Equities are a good investment choice. It would be even smarter to opt for equity mutual funds(EMFs) through a Systematic Investment Plan(SIP) to plan for long-term needs such as retirement finance. You should also invest in an appropriate health insurance plan as even if you are young, health issues can arrive irrespective of age. In order to be prepared for emergencies, you should also invest in building liquid funds.
To fulfill your short-term requirements, it is advisable to invest in instruments such as FDs, post office deposits, debt funds and Fixed Maturity Plans (FMPs). Another good method is to periodically shift money over and above a specific limit in your savings account to FDs or recurring deposits. You’ll earn greater returns while saving liquidity for emergencies.
Women form a major part of the economy and their economic independence is not just crucial for the growth of the country but it is also their right. With the increasing representation of women in the workforce, it is necessary that we spread awareness about financial literacy amongst young women.
Conclusion: This Navratri could well be the right time to start your investment journey. Don’t forget to celebrate the colors of Navratri with the market. Always remember to start your investment journey with a trusted and reliable financial partner. Angel Broking wishes all aspiring investors a Happy Navratri, and may the goddess bless you!
Prabhakar Tiwari is CMO at Angel Broking. Views are personal
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