Money Mindset: Approach problems in a non-linear fashion

Mar 06, 2023
At the age of 54, Padma Ramarathnam became a caregiver and had to take charge of the finances.

My husband and I were contemplating a laid-back retired life when the tables suddenly turned. My partner and dear friend suffered a paralytic stroke just a few months before he was to retire.

Here’s how I tackled it and my advice to younger women.

Don't minimize your role as a wife or as a woman.

Don’t assume that finances are only your husband’s problem, even if you are not earning. It is a partnership. You both are in the marriage together. Money decisions affect everyone in the house.

Society is always feeding us a narrative. You don’t have the mind for finances. You are too young. You are too old. Who is to make that decision for you? Why must age be a barrier? Why must gender be a barrier?

Take an interest. Question. Do your research. Offer solutions. Discuss. Start investing, whatever be your age or social status. If you husband gives you a monthly budget to run the house, you can even take as little as Rs 1,000 and start a systematic investment plan (SIP) into a mutual fund or a bank recurring deposit.

Never assume that good times are a given.

Besides the emotional and physical impact of me taking on the role of a caregiver, I was forced to take charge of the finances, something he had looked after all our married life.

The best time to educate yourself is when the going is good. I sometimes regret that I wasn't this financially aware while we had a regular monthly income. I could have done so much more. Now, I even have an emergency fund in case I require it for a sudden medical expense. That way, I do not have to touch my investments.

Be clear on what you want. 

When the final settlement cheque of my husband’s company was handed over to me, I realized that it was not the amount I envisaged. We had taken a loan on his provident fund to purchase a 2-bedroom apartment Bangalore.

The remaining amount would rapidly disappear if I did not take charge instantly and invest it.

I had one goal: Be financially independent and not ask my daughter for monetary support. All my actions stemmed from this decisions.

Approach problems from multiple angles. 

I was brutally honest and aware of my complete lack of knowledge when it came to stock market. I did not understand chit funds.

This was in the mid-1990s when government undertakings were issuing bonds to the public at around 15% per annum. And, non-banking financial companies, or NBFCs, were passing on huge commissions to investors who invested in their debt instruments.

I began investing in these bonds and lived off the interest. By living frugally, I also was able to reinvest the interest too, and gradually increased the principle. When interest rates began to dip, I started to look at mutual funds.

I scheduled my investments to ensure that cash flow comes from a Systematic Withdrawal Plan (SWP), dividends or interest payments. With these inflows, I managed my daily expenses, outings and pampered my two grandsons. Larger purchases and expenses are put off till an investment matures.

When I was handed the cheque, I realized that I needed to attack the problem from various aspects. For one, I had to cut down on wasteful expenditure and adopt a frugal lifestyle. This would help save my corpus from getting depleted. But simultaneously, I had to grow the corpus. Because the erosion of the value of money due to inflation would continue, irrespective of my circumstances. Hence, I had to invest the money and take a call not to touch the principal, and instead add to it when possible.

  • Approach a problem from different angles. To be financially independent, I had to do various things - cut down on frivolous expenditure, increase my corpus and ensure inflows. Good investing is not just about knowing where to invest, but what to avoid.
  • Don't blindly follow what another is doing. You need to take a hard look at your circumstances, and knowledge and what you are comfortable with.
  • Never be afraid to ask questions. Never be too arrogant to not reach out for help. Where I am today is because of the sound advice from well-meaning individuals.
  • Just because I avoided an investment at one time (equity), doesn’t mean I should continue. Allow yourself to evolve, as an investor and as a woman.
Padma Ramarathnam's husband passed away. She is financially independent even in her 80s.
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ninan joseph
Mar 12 2023 12:16 PM
"This would help save my corpus from getting depleted. But simultaneously, I had to grow the corpus."

Every person who is planning for retirement or retired, should do this. These are golden words and comes straight out of life experience and not from what a MF manager says or experts keep talking about.

You need to grow the corpus. This is the only way. A very small RD will result in a reasonable amount every two years which to a certain level offset inflation. This is a must.

Love to read something like this - which is true - which is real life - which is more for people in India.

There are so many Indian Women who has gone through the same experiences. All of them will come out stronger, eventually, the purpose of the article is for those who just do not want to get involved in finances will find themselves hard landing - but life is such that everyone, just everyone will have to stand up on their own.

To all women out there who just do not want to get involved, if you learn the basics, your landing could be marginally softer. It will never will be smooth but it will be softer. Quite inspirational, this write up, Madam Padma Ramarathnam.
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