This is a topic close to my heart. As a single woman in her 30s, I often find myself having to deal with people second-guessing my financial decisions. I am always told to consult a man before taking things further. Don’t get me wrong. I am absolutely okay with consulting experts. The keyword being “experts.” This is a gender-neutral term not limited to men. If they had told me to consult an expert instead of a specific gender, I would have been fine. But that’s not the case. They pinpoint the gender – it should be a “he.”
In my experience, people in India are skeptical about a woman’s money-managing skills. There’s an absolutely valid reason for such cynicism. Over generations, men have been handling money, and women have been doing household chores. This mentality is deeply ingrained in us. It is only now that the roles are shifting, more women are joining the workforce, and men are learning to handle the kitchen by themselves. In the past, this role-shifting was unheard of, which might explain why breaking away from it now takes some conscious effort. It does not come naturally. People tend to look at you with distrust if you take up a role that goes against the gender stereotype.
“I rather my husband not cook. He might make a mess.”
“I rather my wife not handle finances. She might make a mess.”
These dialogues are not fictional. They very much exist – especially in Indian households. True, some women may not be good at finance, but that applies to men too.
Here’s an actual conversation with my mother:
Me: “I have decided to invest in Sovereign Gold Bonds (SGBs).”
Mom: “Oh! Why don’t you consult XYZ uncle about this?”
Me: “But what would he know? He’s a mid-50s person who distrusts new investment schemes.”
“Okay. But are you sure?”
“Yes! I have done my research, and I understand this product well.”
That was the end of the discussion. My mother looked at me with doubt etched all over her face. I had to convince her that I was making an informed decision.
To date, I have not made a poor investment choice. I read both the pros and cons of all investment schemes before selecting. I stay away from products I do not understand. I avoid systems that are too risky. I only invest in government-regulated schemes, not impulsively, but after going through much examination. However, all this research is still insufficient for society to stop doubting my capability to handle finances. Because I am a woman. Instead, a man who has done half the study is trusted more because of his gender.
Women are encouraged to be financially savvy and aware. But my question is – when we do become financially literate, are there people who would trust us to efficiently handle our money?
After all the non-stop cribbing about my performance reviews and facing severe anxiety due to them for the last two years, I am relieved to announce that I did not get any bad reviews this year. So far, anyway. My anxiety is always on the lookout for some bad news, so it is with some apprehension that I open my inbox each day. Probably my anxiety might last till the end of this year.
Things that might have contributed to some relief this time around:
Regular feedback sessions – I made it a point to seek constructive feedback from my manager regularly. I did not wait for him to provide it to me.
Asking more questions – I realized I should be digging deeper into what they wanted so I could help myself. Asking more questions was the way to go.
Pushing myself – I was a nervous wreck after the last performance review. So I had to shift my mindset from my default self-pity mode to learning mode to make way for improvements.
Better management – The manager did better this time. He was good at providing constructive feedback immediately after a task was completed.
If you get a bad annual performance review, try the above approach before completely giving up on the company. It hurts quite a bit when your work isn’t appreciated. Your first impulse might be to quit the company but take any feedback with an open mind, see if the remarks are legit, and work towards implementing them.
I think a part of me was waiting for this performance review to check if my best was good enough for my company, based on which I would have redefined my future plans. There’s no point moving forward if your employer cannot see the hard work you put into your projects. You can work all you want, as hard as possible, but if your employers turn a blind eye or start criticizing every little thing you do, all your effort is wasted. It is one of the main reasons why I feel a constructive work environment should be given precedence over money: getting more money does not always guarantee more happiness. You need a non-toxic environment to function to your best capacity. Money is essential, yes. We are not working for charity. But the side effects shouldn’t be loss of sleep, unending stress, and depleted family time.
Getting back to positive performance reviews, you would want your boss to know you are completely involved in your work, so you may have to speak to them often. Ask them doubts, questions, and share suggestions, even if you aren’t in dire need to get them answered. If there’s nothing to say, dig deeper. There’s always something to discuss, however major or minor it is. The point is to be as proactive as you can. Take the first step in getting things done. Getting work done silently is undervalued in most companies (sadly for us introverts), and putting on a show is the need of the hour. Unless your manager is as understanding as Adam Grant, you wouldn’t need all these tips, but the reality is something else.
Even though you can manage things independently, your boss also requires validation for their work, so give that opportunity to them – make them feel involved. Sometimes, it takes a slight shift in our own approach toward work to change our current company to the dream company we’ve always wished for. It is more or less like a relationship; you and the company must make an equal effort. So this year, I want to tap myself on the back for not giving up, coming out with a plan to better my work, trying out a different approach, and checking patiently for outcomes and feedback with an open mind. My motivation doesn’t come from money; it comes from my work being valued. Being a single, unmarried woman, I do not have many responsibilities, so I can do away with chasing money. Yes, money is a great plus, but more compensation means nothing if we are disrespected or overworked.
I have seen senior citizens in India struggling 5-10 years post-retirement because they didn’t have enough savings. Their financial freedom is ultimately compromised as they become dependent on their children.
One example is my own father.
My dad was the only earning member of the entire family. My mother derived her happiness by not involving herself in financial matters. Numbers made her anxious, and she was fine letting dad make all the financial decisions. He enjoyed a plush job in the Middle East, and we had a wonderfully privileged life. I am eternally grateful for everything that he has provided for us. I went to the best of schools/universities and worked for a bit in the Middle East. Then we all decided to pack our bags and head back to India after dad’s retirement – a much-needed rest for him after 30+ years of service.
Everything went on fine until the 5th year of my dad’s retirement. His anxiety was apparent; he was concerned whether his corpus would last his entire lifespan. I had already started working by then, and I started pitching in. Slowly his mental health deteriorated. It may have been due to a combination of stress and disappointment in his financial matters and his physical health issues. The doctors were unable to help him. My dad, who was an active, cheeky, energetic man, turned silent, desolate, and serious. Since I stayed near my parents, I was a witness to all that they went through concerning their finance. My dad wanted to resume work in his mid-60s, despite his physical limitations, no thanks to his depleting retirement corpus.
I am unsure what went wrong because I never discussed it with my dad. He’s no more (he passed away a couple of years back). When I look at his bank balance, I have so many questions. The most glaring one was – “Where did all the money go?” Then there are others “Did he not save?” “Maybe he saved, but it was not enough for inflation?” “Did he make any bad investment choices?” “Did he not invest in the right retirement schemes?” “Would it have helped if he had invested in some equity, mutual fund, or pension scheme?” My dad had only invested in Fixed Deposits.
You learn by observing the people around you. It was only after I saw my dad’s financial condition that I became aggressive with my own savings and investments. I have no idea whether my plan will work for me in the long run, but I can try. I do not have many lifestyle demands, and I am a minimalist, so that helps.
In the quest to achieve financial independence, I have been reading a lot of personal finance books. My initial few reads were meant for the American audience and they did not help me much. I wanted to read books specific to India. That’s how I first landed upon Monika Halan’s Let’s Talk Money. This has to be my favorite Indian personal finance book so far. Everything is explained clearly and concisely. I have re-read it a couple of times in the hope that her words would sync in deep and become second nature for me. She offers instructions on how to invest for each age group.
The next book that is good for Indians looking into learning personal finance is PV Subramanyam’s Retire Rich. He is a Chartered Accountant who gives some good, solid, no-nonsense advice on how you can carry about your investments. His policy is investing in yourself first, before anything else. Keep aside some money for your retirement and invest in other people and things only after that.
Retiring rich is undoubtedly a priority for me. Keep in mind that the word “rich” is subjective. I want to retire “rich” enough for my own needs, but that amount might not be “rich” enough for you. So the first step is to calculate your retirement corpus based on your annual expenses. There are enough online retirement calculators to help you out. If you are in your 20s, start saving/investing now. I am in my 30s now, and my only regret is that I did not start sooner.
So we are now into the final set of quotes from The Intelligent Investor by Benjamin Graham. I have taken great care to choose the quotes that would make sense to a larger audience and not just equity investors. The book, in my opinion, is quite dry. But then, what can you expect from an investing book? Nevertheless, the advice imparted by Benjamin Graham is worth considering. Being not much of a speculator myself, his thoughts resonated with me.
Without further ado, let’s start Part 3.
It is easy for us to tell you not to speculate; the hard thing will be for you to follow this advice. Let us repeat what we said at the outset: If you want to speculate do so with your eyes open, knowing that you will probably lose money in the end; be sure to limit the amount at risk and to separate it completely from your investment program.
The investor can scarcely take seriously the innumerable predictions which appear almost daily and are his for the asking. Yet in many cases he pays attention to them and even acts upon them. Why? Because he has been persuaded that it is important for him to form some opinion of the future course of the stock market, and because he feels that the brokerage or service forecast is at least more dependable than his own.
Those formulas that gain adherents and importance do so because they have worked well over a period, or sometimes merely because they have been plausibly adapted to the statistical record of the past. But as their acceptance increases, their reliability tends to diminish. This happens for two reasons: First, the passage of time brings new conditions which the old formula no longer fits. Second, in stock-market affairs the popularity of a trading theory has itself an influence on the market’s behavior which detracts in the long run from its profit-making possibilities.
The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.
The happiness of those who want to be popular depends on others; the happiness of those who seek pleasure fluctuates with moods outside their control; but the happiness of the wise grows out of their own free acts.
If you listen to financial TV, or read most market columnists, you’d think that investing is some kind of sport, or a war, or a struggle for survival in a hostile wilderness. But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.
The whole point of investing is not to earn more money than average, but to earn enough money to meet your own needs.
Putting up to a third of your stock money in mutual funds that hold foreign stocks (including those in emerging markets) helps insure against the risk that our own backyard may not always be the best place in the world to invest.
The most basic possible definition of a good business is this: It generates more cash than it consumes. Good managers keep finding ways of putting that cash to productive use. In the long run, companies that meet this definition are virtually certain to grow in value, no matter what the stock market does.
When you research a company’s financial reports, start reading on the last page and slowly work your way toward the front. Anything that the company doesn’t want you to find is buried in the back—which is precisely why you should look there first.
Graham’s criterion of financial strength still works: If you build a diversified basket of stocks whose current assets are at least double their current liabilities, and whose long-term debt does not exceed working capital, you should end up with a group of conservatively financed companies with plenty of staying power.
A small percentage of investors can excel at picking their own stocks. Everyone else would be better off getting help, ideally through an index fund.
At some point in its life, almost every stock is a bargain; at another time, it will be expensive. Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go.
As Graham liked to say, in the short run the market is a voting machine, but in the long run it is a weighing machine. Yahoo! won the short-term popularity contest. But in the end, it’s earnings that matter—and Yahoo! barely had any.
If you buy a stock purely because its price has been going up—instead of asking whether the underlying company’s value is increasing—then sooner or later you will be extremely sorry. That’s not a likelihood. It is a certainty.
Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But, to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.
For the intelligent investor, Graham’s “margin of safety” performs the same function: By refusing to pay too much for an investment, you minimize the chances that your wealth will ever disappear or suddenly be destroyed.
Ultimately, financial risk resides not in what kinds of investments you have, but in what kind of investor you are. If you want to know what risk really is, go to the nearest bathroom and step up to the mirror. That’s risk, gazing back at you from the glass.