Mother’s Day has just passed, and it is just the moment for us to recall how many roles a mother plays today. She can be a homemaker or a partner in a double-income household. She could be supporting children or other family members.
Many mothers in Taiwan are entering the workforce, as the rate at which women participate in the labor force in Taiwan has shown a gradual growing trend over the past 10 years to stand at 51.03 percent in December last year, according to data provided by the Gender Equality Committee.
With greater income potential than ever before, women need to become money-wise and wealth-savvy.
Financial independence and long-term security start with a plan. Financial planning allows women to map out their goals based on their present circumstances and future needs. With early preparation and a disciplined approach to saving and investing, women can take care of a variety of needs — from emergency funds to retirement, health protection to children’s education. They can make informed changes along the way as their personal situation and financial holdings evolve.
FINANCIAL CHALLENGES
Some of the challenges faced by our female clients include time, focus and a need to become investment-savvy. With more women taking on jobs alongside family responsibilities, women have little time left to sit down with a financial advisor and draw up a plan.
We suggest that working mothers be informed about their family’s financial situation and be involved in the financial planning. Better yet, building up a separate savings pool can help a woman support specific goals and ensure that she can maintain financial independence and quality of life regardless of what the future brings.
The best place to start in investment is to master the basics: Know your goals and understand your risk appetite. Diversify your holdings by keeping a balanced portfolio of cash (including an emergency fund) and investments that suit your needs (a mix of equities, bonds, funds and foreign exchange). Take a long-term view and expect volatility along the way. Save regularly and stay invested to smooth out the effects of the markets’ ups and downs. Review your portfolio at least twice a year and rebalance to align with changes in your investment goals and risk tolerance.
INVESTMENT TIPS
This 3-point checklist can help women advance their financial well-being:
Save now. Build up your own savings fund and be disciplined in setting aside a specific amount on a regular basis. No amount is too small, and you can top-up whenever you have extra income or a bonus. You can use these funds to create an emergency stash, save for the down payment for a new car or apartment, or accumulate excess funds to start investing for long-term goals such as retirement.
Explore investment options. Whether you are new to investing or experienced enough for a DIY portfolio, a balanced and diversified portfolio consisting of cash and suitable investments might help you take advantage of opportunities to cope with inflation, grow wealth and manage volatility.
If you are investing for the first time, you might consider a diversified portfolio managed by a fund manager — what are also known as mutual funds or unit trusts. These are convenient and accessible to retail investors and leverage the expertise of professionals. For investors with moderate risk levels who want guidance while maintaining control over investment decisionmaking, Portfolio Advisory Services are investment solutions provided by a financial advisor based on your risk appetite.
Seasoned investors take the reins of investing in a basket of asset classes at their discretion. They do their own research and make their own investment decisions on a broad selection of investments such as a variety of funds, bonds, structured products and foreign exchange. They use online or digital platforms for their self-directed investments, which could mean lower fees as well.
Prepare for the unexpected. Smart women think about the future and anticipate the unexpected. Insurance protection is critical to ensure that the needs and lifestyle of your dependents and other family members are met, and that future goals are left unchanged.
Women’s health issues can be varied and increase over time. Make sure that you have adequate health coverage to take care of short-term illnesses and preventive care, but more importantly, review and adjust coverage to prepare for rising costs of critical illness and healthcare in retirement.
Linda Yip is head of Retail Banking and Wealth Management at HSBC Bank (Taiwan) Ltd.
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