It’s also a fact that many working women have to take a break from work due to family commitments and returning to work after an extended break is not easy. In this article, we will talk about certain ways through which women can achieve financial independence and accumulate wealth.
Set goalsSetting goals is of prime importance as it sets the tone to achieve them. As a woman, set and divide your goals into various buckets as per the time frame within which you want to achieve them as highlighted in the table given below:
|Time frame||Type of goal|
|6 months – 1 year||Short term|
|1-5 year||Medium term|
|Above 5 years||Long-term|
Goal-based investmentA goal-based investment approach ensures that money is available at the right time when needed. At the same time, it’s essential to choose the right financial instrument. For instance, for a short-term goal, it’s ideal to park money in liquid funds and fixed return instruments which offer stable returns.
On the other hand, for medium-term goals, you can opt for aggressive hybrid funds, which invest in a mix of equities and debt. For long-term objectives, it’s prudent to opt for equities.
Save and investSavings form the crux of a good financial plan. As investment sage Warren Buffet puts it “Don’t save what is left after spending but spend what is left after savings”. At the same time, it’s important to invest the amount saved to compound your wealth in the long run.
There are many financial instruments which allow you to start small. For example, you can start investing in a mutual fund from as little as Rs. 500 per month and step-up the amount whenever required. Even a modest SIP of Rs. 1000 per month in an equity mutual fund offering annualised returns of 12% for 15 years will help you garner a corpus of above Rs. 3 lakhs. For a balanced portfolio, it’s important to invest in a mix of equities and debt.
Start earlyAn early start has several perks as it gives your money more time to grow. Also, when you begin early, you can benefit from the power of compounding, which has a multiplier effect on your wealth. Compounding results in generating income on top of interest and this helps you grow your wealth manifold in the coming days.
Meticulous planning coupled with deft investments will not only help you become rich but attain financial freedom.
Learn more about Mutual Funds for a good personal financial management.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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