Smartest money decision: I started an SIP in an index fund in my late twenties. I have largely stuck with it despite temporary blips. It is true that compounding is your best friend.
Biggest money mistake: In my late twenties, I uncharacteristically gave into peer and parental pressure to invest in real estate right before the financial sector troubles began in 2008. People don’t tell you about all the troubles that come with home ownership—builder uncertainties, low rental yields, maintenance, various taxes and society dues that are not part of the “sticker price".
Money mantra for women: Start investing early for long-term goals and retirement; build an emergency buffer that lets you take a work break when needed. Make sure the insurance is adequate for your dependents, and not just for loan obligations or expenses.
Gender clichés women face: Workplaces make assumptions about women that they won’t be interested in certain kinds of roles or travel will be a problem after a certain stage. Flexibility should not be positioned as a “perk" only for women but for all employees. This makes it a part of the company’s culture.
Letter to young women employees
You may not be aware of this but only about 1 in 5 Indian women who could be working are doing so; what is referred to as the female workforce participation rate. We are doing worse than several countries much poorer than us. The other 4 have either dropped out after a marriage, because it is seen as not befitting the “status" of the family or because of safety concerns. Some of these, presumably a minority, could be a genuine choice made by the woman. So, you are part of an elite group. You are also role models for women in your network, your cousins who are still in school and college. I think it is important to be mindful of that.
You are all accomplished in your respective fields and working on important problems. I would urge you to find the time to invest in your personal and financial health—so that you can be a source of strength for the people you care about.
Your biggest asset is your human capital, growing it is not just about moving to higher paying jobs every few years. Discover what you are uniquely good at and aim to be the world’s best at it. Continuously invest in your skills, raise your hand to take on a newer role or be part of a founding team and build networks you can turn to for advice and support.
Put your hard-earned money to work and don’t leave it in 3% return accounts or bad insurance policies. Us bankers have created bewildering jargon around personal finance. It is really not that complicated. Take control of your financial life and take concrete action like committing to a long-term investment plan in your late twenties or early thirties.
More power to you and may your tribe increase.