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Expert Talk: Millennial HNIs And Wealth Management

By Anu Jain, Head - Equity Brokerage

The year 2021 started with a resounding crash as glass ceilings were broken by strong purposeful women across the globe. Kamala Harris made history as the first woman to become vice-president of the US. Closely following on the heels of this stupendous victory, Whitney Wolfe Herd, Founder and CEO of dating app Bumble, became the youngest self-made woman tech billionaire after her company went public.

Clearly, there is no stopping the women of today from achieving their dreams and rising to the highest echelons of their respective fields. For millennial women, the world is their oyster. Backed by education, millennial women are well-positioned to leverage the many opportunities that can now come their way. However, as you step out and break glass ceilings, it is important for you to understand, that along with chalking a formidable career, you should also plan your finances judiciously. You are already creating wealth. Now you need to manage, grow, and preserve your wealth.

Acing Your Finances Like A Champ!

As a woman belonging to the millennial generation, you have probably just entered the workforce or are twelve to fifteen years into your career. Thus, taking into account your longer investment time frame, you can consider investing at least 50% of your portfolio in equities. Equities, keep in mind, is a vehicle of long-term growth. In the short-term, equities can be volatile and generate low to negative returns. However, over the long-term, they tend to perform well. This can help you save up for the big goals like buying a house or creating a retirement fund. At the same time, you must ensure that your money is well protected and capable of meeting your unique needs. Thus, you must also consider investing a part of your money in debt mutual funds and specified government schemes and investment plans. By adopting a balanced approach, you can grow and protect your money.

Listed below are a few thumb rules that you should adhere to when you embark upon your financial planning journey.

  • You have done the hard part of earning money, now is the time to protect and grow that money.
  • Your savings and investment journey should start as soon as you begin your earnings journey.
  • You should be intelligent about budgeting. Your mantra should always be to save more, spend less, and be honest about your spending habits.
  • Do not rely on credit cards to meet discretionary expenses or finance short-term goals.
  • Do not take on huge debt, ie, big loans at the beginning of your career.
  • If you have taken a loan, ensure that you always have at least six months worth of EMIs kept aside in a safe investment vehicle.
  • The key to the success of your wealth management plan is diversification – this way your portfolio will never be out of fashion.
  • Start a Systematic Investment Plan (SIP) and invest in it for the long-term – a SIP is an investment vehicle that allows you to invest a fixed amount of money in an investment of your choice and at intervals that suit you best. You can start small and increase the investment amount over time.
  • Purchase an insurance policy that can help mitigate the risk of unforeseen circumstances.
  • Be disciplined and follow your investment plan judiciously.
  • A DIY approach might not always work when it comes to wealth management.
  • Most importantly, do not be scared to have conversations about money and investing.

You are a unique individual with your own set of requirements. You must ensure that your financial plan is equally unique and holistically addresses your requirements. The best part is that today you also have access to a wide suite of digital solutions and tools that can be leveraged to better understand and plan your finances. These tools include SIP calculators, budgeting apps and financial planning apps. Inarguably, it is hard to ignore the thrill of instant gratification and argue with the logic of You Only Live Once (YOLO). However, to secure your tomorrow, continue living on your own terms and consider starting your wealth planning journey today.

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