scorecardresearchInternational Women's Day: Save 30-40% of your salary for future financial

International Women's Day: Save 30-40% of your salary for future financial security, advises Aditi Kothari Desai of DSP

Updated: 08 Mar 2023, 11:01 AM IST

In an interview with MintGenie, DSP Investment Managers’ Aditi Kothari Desai shared the need to have more women in investment, especially, as fund managers.

Aditi Kothari Desai, Vice Chairperson, DSP Investment Managers

Aditi Kothari Desai, Vice Chairperson, DSP Investment Managers

Women must consider their work as a career, not just a job for fun. According to Aditi Kothari Desai, Vice Chairperson, DSP Investment Managers, women fund managers are less prone to making hasty decisions and are patient.

In an interview with MintGenie, Desai said that men are often more confident in investing and believe they know everything.

Edited Excerpts:

Q. What money advice would you give younger students and newly working women?

I would recommend that they follow the 50-30-20 rule. This means allocating 50 per cent of one’s income for rent and basic needs, 30 per cent for entertainment and going out, and 20 per cent for investment. However, I would suggest starting with the investment first, making it 20-30-50. They can adjust with the remaining 30 per cent for entertainment, but they should never touch the 20 per cent set aside for investments as it is crucial for their financial security. While being young is fun, I believe this is an important piece of advice.

From a career perspective, I would suggest that they consider their work as a career, not just a job for fun. If it's not a long-term career plan, and they're just working for fun, they should save more than 20 per cent. Saving 30 to 40 per cent of their salary is crucial for their future financial security, especially if they plan to have a no-salary life. Having invested money in their name is important to secure their future.

Q. What does money mean to you?

Well, when it comes to money, for me, it's all about freedom and independence. I wouldn't say it's about security, but rather the ability to make my own choices, do what I want, and not have to answer to anyone. Money gives me the power to plan my life according to my own wishes, be disciplined, and have control over my financial future. I don't want to be dependent on anyone else, and having money gives me that sense of freedom and independence. When someone mentions money, those are the two things that come to my mind first.

Q. For some reason, finance is still considered a man’s industry, take us through the beginning of your work in the financial industry and the challenges you faced.

The financial world is undoubtedly a man's world. From a young age, I saw my father working in this business, then known as Merchant banking. He started investment banking within DSP, a 150-year-old firm, in the 70s. In school, my friends had a hard time understanding what my father did, as they were familiar with doctors, lawyers, and shopkeepers, but not merchant bankers. I was curious to learn more, but my father's explanations were never enough. Therefore, I pursued commerce and then went to Wharton for my undergraduate studies, where I finally understood the field. After completing my degree, I worked at Merrill Lynch in New York from 1990 to 2000, where I gained experience in investment banking and equity and capital markets. Upon returning to India, I worked in risk management and fixed-income sales to learn more about the Indian market. In 2002, I joined DSP fund managers, formerly known as DSP Merrill Lynch fund managers. Since then, I've witnessed the growth of the industry and DSP, as well as the changes and challenges it has faced.

It's tough being a woman in the corporate culture, not just in finance. I feel that women do not take up positions as seriously as they should. We see more women in sales and marketing, but not enough in investment, specifically as fund managers. We need to encourage more women to pursue these roles. A survey conducted abroad shows that women fund managers are less prone to making hasty decisions and are more patient. On average, they have done well, although the subset is small, and the data may not be sufficient to make assumptions or claims in India.

We need more women fund managers for several reasons. People have expectations, and women are subconsciously expected to be demure, which is unfair. Men are allowed to speak with raised voices or even shout, but women are reprimanded when they do the same. This subconscious bias exists across the board. It is crucial to recognize biases and allow women to be themselves, just as men are allowed. Everyone should be allowed to express themselves and not be judged based on their gender.

Q. Share with us a piece of advice you always follow when it comes to money.

When it comes to money, my advice would be to not get too attached to it. Money is transient, and we need it to live a basic good life, but we should not stress too much about spending it or not having enough of it. It's important to have the right amount of money, but detachment from it is key. The Gita also emphasizes the importance of detachment and doing work for the sake of the work itself, not for the money it brings. As an investor, it's important to not get too excited or too sad about the fluctuations in the market. Focus on doing your work well, and the money will come as long as the quality of your work and interest in it is good.

Q. How do you think men and women differ from each other when it comes to handling money?

I mean, regarding how men and women differ from each other when it comes to handling money, my advice is that men are often more confident when it comes to investing and believe they know everything. On the other hand, women tend to lack confidence in this area and defer to men's opinions.

However, recent surveys have shown that men do not necessarily make better investors than women when women make their own investment decisions. Therefore, it is important for women to take charge of their own finances and feel confident in making investment decisions for themselves, especially if it is their own money that they have earned or inherited. It is not wise to hand over this responsibility to someone else.

Women should take the time to learn about investing with so many resources available. It is also important to work with a good financial advisor who can teach and guide you through the process. Before investing, it's crucial to understand your risk profile and be aware of how much loss you can sustain based on your financial situation and age. This knowledge will help you make informed investment decisions and avoid making emotional decisions during market fluctuations.

Q. What do men need to learn from women?

Well, maybe men need to learn that, you know, women are the people many times at home that are managing the budget. And they are extremely frugal and extremely cautious when it comes to how to spend money. So, they will probably do the same in investments and be more practical. It's very general, I don't like to generalize. So actually, I would maybe prefer skipping the question, but if you need to know, this is a very general statement that I can make.

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First Published: 08 Mar 2023, 11:01 AM IST