The cost of playing it safe: Why women need to invest

For generations, women in India have been encouraged to save rather than invest. You know this — maybe you have seen it in your own family. But here's the truth: saving alone won't build your future. You already have the skills of a smart investor. Now it's time to put them to work.

Think about it: you're already making informed financial decisions every day — negotiating prices, managing household budgets, and planning for emergencies. These are the very same skills that successful investors use. So why let outdated ideas hold you back?

Many still hold on to the idea that women struggle to access financial independence, often based on assumptions like, "finance is too complex for women," "women might lose money because they are overly emotional," or "investing is a man's field." Recently, during a chat with my colleague about how finances have shaped the experiences of women in our families, we uncovered some fascinating insights that challenge these stereotypes. Let's explore two diverse financial strategies that were popular back in the 1980s.

Saving vs investing: A 40-year lesson in wealth building

In 1985, my colleague's grandparents lived in Delhi. With a salary of about Rs 2,000 per month, their household budget came to around Rs 500, which his grandmother managed. Every month, she set aside whatever spare change she could find in boxes of rice, dal, and pulses. Over the years, as inflation and salaries rose, so did her savings. Decades passed and the loose change she hoarded slowly became worth a lavish house garden filled with exotic plants from all over the country.

Meanwhile, on the other side of Delhi, my grandmother was working as a school teacher and homemaker. Deeply rooted in traditional values, she convinced my grandfather to splurge on some properties on the outskirts of the city to leave as tangible legacies for her children. Remember, at this time the stock market was not accessible to the masses and buying real estate was the go-to form of investment. Although it took them years to rebuild their savings, decades later they managed to leave their children with a generous inheritance.

Suggested read: Why don't women make investment decisions?

Fast forward to 2025: The power of inflation and wealth creation

Both of these strategies adopted by the women of the family were commendable for their time. But that's exactly the problem. It's 2025 now and inflation has risen. The rupee doesn't stretch as far as it once did. In India, inflation averages around 7 per cent annually. This means that even if you sit down and save a majority of your income for another forty years, it will not be enough.

Let's talk numbers. In 1985, Rs 500 would easily cover a family's monthly expenses with more left to save. By 2025, that same Rs 500 would barely last a week. Inflation silently erodes the value of money, reducing your purchasing power over time. This is the hidden cost of not investing — your savings may seem safe, but in reality, they lose value every year.

Now, if that Rs 500 had been invested in the stock market (for instance in Sensex, a leading stock market index), it would be worth more than Rs 50,000 today. Investing comes with risks, but not investing can be far more damaging in the long run.

If you are only saving, you're actually losing money. Inflation eats away at your hard-earned savings every year. But investing? That's how you make money work for you. Wouldn't you rather have the security of knowing that your future is growing, not shrinking?

The case for women in investing: What the data says

Global research shows that women have a higher life expectancy than men. This means that many of you are statistically more likely to outlive your spouse. In the future, post-retirement, with no monthly income and a set amount of savings that diminish in value year by year, you would have to shift your reliance from your spouse to your children. The chain of dependence continues. This is an extremely sad reality considering the potential and prowess women have shown in investing.

Studies in India highlight that women investors tend to be more disciplined and long-term focused. The Axis Mutual Fund Women Investment Behaviour Report 2024, alongside data from CAMS, found that women:

• Invest 25 per cent more than men,
  
• Have 37 per cent higher investment corpus,
  
• Show 22 per cent greater persistence in mutual funds.

While these are encouraging numbers, the share of women investors continues to be low.

The takeaway

The difference between savings and investing is the difference between security and power. A savings account might ensure financial stability, but investments guarantee financial independence. For too long, women have been told to preserve wealth - now, they are learning to build it.

It's time to take control of your financial future. No more waiting, no more doubts. You don't need a fortune to start — just Rs 500 and the decision to invest in yourself.

In the following articles, I'll show you exactly how to do it. Let's get started.

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This article was originally published on March 06, 2025.