Women in Money Land

September 26, 2015, Chennai

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WoW- Our women only workshop on personal finance focusses on all the aspects related to women and money in India.

Inheritance laws is one of them. Discriminatory inheritance practices (legal and social) leaves women with less or no rights to inherited properties. The negative aspects of these patriarchal practices get compounded due to ignorance and lack of confidence. This not only hurts their financial security but also leaves them with less say in their households and lower self-esteem.
The plight of women is reflected in this United Nations statistic: 
*67% of the hours of work done in the world is done by women
Though they earn only 10% of the world’s income
And own only 1% of the world’s property
*Includes farm work and domestic chores
In my practice I come across many of such cases. Last week I received an unexpected call from my best friend’s father – Mr. Sundaram. Mr. Sundaram’s father had passed away seven years back leaving behind the ancestral property to the male heir of the family that happened to be Mr. Sundaram’s only son – Harish (my friend’s only brother). Harish lives in USA and could finally sell that property one and a half years back. 
Harish gifted Rs.1.25 crore from the sale proceeds of the house to his mother (Mrs. Sundaram). Mrs. Sundaram is 72 years old and a home maker and has never handled the money independently. She is suddenly surrounded by a lot of advice from all family members about what to do with that money. She is unsure about what to do. She was confused. She wanted to distribute her estate to her grand-children, at the same time enjoy the comforts and confidence with the money she finally had in her hands.
Mrs. Sundaram is not alone. When women do not inherit any property, they become prone to future financial crises.  But the irony is that when women are blessed with inheritance or gifts, like in case of Mrs. Sundaram, they are still not empowered and are haunted by feelings of nervousness to make wise decisions. There are a lot of women who are not sure about their capabilities in handling their finances and are not sure about the advice given by their kith and kin. Their own past and incidents  in the society make them suspicious of all the advice. Moreover, the lack of knowledge creates a bigger sense of insecurity. In India a girl child is not encouraged to learn about money management and most of them grow up into adults who are  not equipped nor confident to make any major financial decision. Unaware of different tools and techniques that are available in the market, they cannot think beyond real estate, fixed deposits and gold. They have misperceptions about the laws of inheritance and a sales oriented market has them suspicious of the service providers. Advice from friends and family can be equally bad.
The answer to Mrs. Sundaram’s problem lies in consulting an adviser who can design a portfolio according to her needs and her emotional status. The money that has come to her at this later stage of life should be able to add happiness to her life, rather than increasing her anxiety and stress. 
We first ascertained what Mrs. Sundaram wants from her money. She needed liquidity for her daily needs. An additional servant, a driver to take her around and some cash to be able to gift at her own will. She did not want to take too much risk with her capital and finally wanted to divide the corpus equally amongst her grand-children. Buying an apartment down OMR and creating FDs will solve neither this nor that. An apartment cannot be divided and she was worried about inflation and the ability of FDs to be able to provide for her till her last days.
We created a conservative portfolio for this goal to take care of her daily needs after accounting for inflation. This portfolio was meant to provide regular income to her and also take care of inflation. The debt portion was laddered to take advantage of falling interest rates. We also mixed differently rated papers to balance the risk and return for this very critical portfolio.
The balance was divided into five individual portfolios for wealth creation. These portfolios had more equity component in them. Equity would give the required growth and create wealth for the next generation at the same time giving Mrs. Sundaram the comfort of having the funds at her disposal in case she needs them for emergency or if she changes her mind. Debt portion allows for the stability in the times of turmoil. We also helped her nominate and assign the funds to her grand-children, so the estate can be passed to her grand-children without any additional cost.
The cost of doing this whole exercise was much less than the cost involved in buying / selling of house and then dividing the proceeds between the heirs. It has given her peace of mind, the grand children are happy and aware that Patti is gifting them, my friend and her sister is happy that there is fund available to dip into for higher education for their children and Mrs. Sundaram has enough to live her life with.
At the end of the day, each and every one of us wants to be rid of our stress and anxieties.  Financial tensions can be solved only thorough knowledge and expertise and not with mere guess work and amateur advice. Most of the people end up making bigger mistakes by following these amateur advices. Women can now enjoy their lives by having a well-planned goal based portfolio which would cater to their needs and desires. This would not only prove to be cost effective but also make them feel empowered and would help them to have a financially sound hassle-free life. 
Your personal finance adviser should not be selling products to you. Make sure he/she is not making money on you but with you. Look for registered advisers who not only suggest investment avenues but work for your overall financial well-being.
 *Names changed to protect privacy

WoW- Our women only workshop on personal finance focusses on all the aspects related to women and money in India. Inheritance laws is one of them. Discriminatory inheritance practices (legal and social) leaves women with less or no rights to inherited properties. The negative aspects of these patriarchal practices get compounded due to ignorance and lack of confidence. This not only hurts their financial security but also leaves them with less say in their households and lower self-esteem.

The plight of women is reflected in this United Nations statistic: 

*67% of the hours of work done in the world is done by women

Though they earn only 10% of the world’s income

And own only 1% of the world’s property

*Includes farm work and domestic chores

In my practice I come across many of such cases. Last week I received an unexpected call from my best friend’s father – Mr. Sundaram. Mr. Sundaram’s father had passed away seven years back leaving behind the ancestral property to the male heir of the family that happened to be Mr. Sundaram’s only son – Harish (my friend’s only brother). Harish lives in USA and could finally sell that property one and a half years back. 

Harish gifted Rs.1.25 crore from the sale proceeds of the house to his mother (Mrs. Sundaram). Mrs. Sundaram is 72 years old and a home maker and has never handled the money independently. She is suddenly surrounded by a lot of advice from all family members about what to do with that money. She is unsure about what to do. She was confused. She wanted to distribute her estate to her grand-children, at the same time enjoy the comforts and confidence with the money she finally had in her hands.

Mrs. Sundaram is not alone. When women do not inherit any property, they become prone to future financial crises.  But the irony is that when women are blessed with inheritance or gifts, like in case of Mrs. Sundaram, they are still not empowered and are haunted by feelings of nervousness to make wise decisions. There are a lot of women who are not sure about their capabilities in handling their finances and are not sure about the advice given by their kith and kin. Their own past and incidents  in the society make them suspicious of all the advice. Moreover, the lack of knowledge creates a bigger sense of insecurity. In India a girl child is not encouraged to learn about money management and most of them grow up into adults who are  not equipped nor confident to make any major financial decision. Unaware of different tools and techniques that are available in the market, they cannot think beyond real estate, fixed deposits and gold. They have misperceptions about the laws of inheritance and a sales oriented market has them suspicious of the service providers. Advice from friends and family can be equally bad.

The answer to Mrs. Sundaram’s problem lies in consulting an adviser who can design a portfolio according to her needs and her emotional status. The money that has come to her at this later stage of life should be able to add happiness to her life, rather than increasing her anxiety and stress. 

We first ascertained what Mrs. Sundaram wants from her money. She needed liquidity for her daily needs. An additional servant, a driver to take her around and some cash to be able to gift at her own will. She did not want to take too much risk with her capital and finally wanted to divide the corpus equally amongst her grand-children. Buying an apartment down OMR and creating FDs will solve neither this nor that. An apartment cannot be divided and she was worried about inflation and the ability of FDs to be able to provide for her till her last days.

We created a conservative portfolio for this goal to take care of her daily needs after accounting for inflation. This portfolio was meant to provide regular income to her and also take care of inflation. The debt portion was laddered to take advantage of falling interest rates. We also mixed differently rated papers to balance the risk and return for this very critical portfolio.

The balance was divided into five individual portfolios for wealth creation. These portfolios had more equity component in them. Equity would give the required growth and create wealth for the next generation at the same time giving Mrs. Sundaram the comfort of having the funds at her disposal in case she needs them for emergency or if she changes her mind. Debt portion allows for the stability in the times of turmoil. We also helped her nominate and assign the funds to her grand-children, so the estate can be passed to her grand-children without any additional cost.

The cost of doing this whole exercise was much less than the cost involved in buying / selling of house and then dividing the proceeds between the heirs. It has given her peace of mind, the grand children are happy and aware that Patti is gifting them, my friend and her sister is happy that there is fund available to dip into for higher education for their children and Mrs. Sundaram has enough to live her life with.

At the end of the day, each and every one of us wants to be rid of our stress and anxieties.  Financial tensions can be solved only thorough knowledge and expertise and not with mere guess work and amateur advice. Most of the people end up making bigger mistakes by following these amateur advices. Women can now enjoy their lives by having a well-planned goal based portfolio which would cater to their needs and desires. This would not only prove to be cost effective but also make them feel empowered and would help them to have a financially sound hassle-free life. 

Your personal finance adviser should not be selling products to you. Make sure he/she is not making money on you but with you. Look for registered advisers who not only suggest investment avenues but work for your overall financial well-being.

 *Names changed to protect privacy