Four Ways Women Can Diversify Income Streams & Build Support Networks

Despite being the 5^th largest economy in the world today, awareness about finance and money management remains alarmingly low especially among women even though we are witnessing increased participation of women in the workforce. According to the 2020-21 annual report of the National Centre for Financial Education (NCFE), only ~21% of women in India are financially literate; realistically speaking even they could be lacking the understanding and essence of personal finance management (the process of planning/budgeting how money is saved/spent), which is extremely crucial for a secured future/retirement planning.

How should one look at financial planning?

There are two parts to this:

• The primary source of earnings/income is through your main economic activity (such as a job or business).
• Saving and investing: accumulating & preserving your savings and diversifying your income streams further.

Financial growth is not just about earning money but more importantly, making your money work whether through disciplined savings and goal-based investing or diversifying income streams.

You must start by following these steps:

1) Plan your financial goals/objective: Start by identifying your goals, whether it is saving for a major purchase or providing for contingencies/retirement. Make a budget.

2) Create savings, invest and monitor: Having identified your goals, build a habit of consistent savings. Follow it with investing your savings into different assets that align with your goals followed by a periodic review of both the goals and your investments. Today, thanks to the formalization of our economy backed by digitization, we now have easy access to diversifying wealth into equity, fixed income/bonds, commodities, real estate, etc. providing different growth opportunities and security.

• Equity /Fixed Income investing can easily be done through the Mutual Fund /Alternative routes (AIF/PMS) either directly or through wealth service providers.
• Gold, another popular household choice among Indian families as an asset in times of need, can now be held digitally as well (Sovereign Gold Bonds) with the added benefit of an interest payout.
• Real Estate – one need not have stacks of money to own a physical real asset piece any longer – the same can be done through buying REITs which are easily tradeable on the exchanges. 
• One important aspect that often goes overlooked is “insurance”. Insurance serves as a safety net protecting one from unforeseen circumstances for even the best laid-out plans. Whether it's health, life or asset insurance, it is important to safeguard your savings from being wiped out.
• One must also periodically review and monitor both the investment goals, which will undergo a change with time and investments considering changing goals/markets/economy. Financial jargon can be intimidating, and this often leads to procrastination in planning for the future. Reaching out to financial advisors or consultants can help bridge this knowledge gap and navigate the complexities of handling your finances like taxes, investments, estate planning etc.

3) Build a network: Surrounding yourself with like-minded individuals who share the same financial ambitions can be incredibly empowering. Seek out help actively to connect and learn. In today’s digital age, social media/online platforms/podcasts make learning, communication and information sharing easy besides providing countless opportunities to connect with others. From networking groups to support communities, women can easily tap into spaces where knowledge, resources, and opportunities are exchanged, helping each other grow and succeed.

4) Build confidence in yourself: One can never be perfect on day one and experience comes only with trial and error. Build your journey of wealth creation in small steps. The earlier one starts, the more time one has to grow their wealth.  

For too long, financial planning has been a distant dream for many women, held back by societal expectations and lack of resources. But that narrative is changing. Whether you are an entrepreneur, a working professional or a homemaker looking to take control of your financial future, some of these suggestions offer a roadmap to greater stability and success. 

Women have shown time and again that once they commit to something they can not only achieve their goals but excel in it. “Give a woman a dollar, and she can put it to good use. Teach her about how money really works, and she can change the world,” — Linda Davis Taylor, CEO and Chairman of Clifford Swan Investment Counselors.

Authored by Swati Khemani, Co-Founder, Carnelian Asset Management & Advisors