Women must automate their investments, says Shalini Warrier, Executive Director at Federal Bank

Shalini Warrier, Executive Director at Federal Bank gives advice to the working millennial women on investing and ways to avoid falling into a debt trap

On the occasion of International Women’s Day on March 8, Moneycontrol presents a two-part series of women leaders from the banking industry.

Today, we meet Shalini Warrier, Executive Director at Federal Bank. She is a qualified chartered accountant (CA) and has over three decades of banking experience. She has served in various roles at Standard Chartered Bank for more than 25 years, of which 15 years were in India and 10 years across multiple geographies – Brunei, Singapore, Indonesia, and Dubai. In 2015, she joined Federal Bank.

In an exclusive conversation with Moneycontrol, Warrier talks about her first earnings, learning budgeting skills from parents, savings, financial journey, managing her investments, and more. She gives advice to the working millennial women on investing and ways to avoid falling into a debt trap. Edited excerpts:

Who in your family first taught you budgeting, savings and investing?

Like most middle-class families, my early lessons about money were from parents, and in particular, my father.

I come from a family where my father was the earning member and my mother a homemaker. The first thing I learnt about was budgeting skills from my father. Then, I started keeping track of my earnings, spending and investing.

Also read: Five reasons why it is important for women to take charge of their finances

Did you set financial goals and start investing to achieve those goals?

When I was studying for chartered accountancy, I earned very little (from articleship). It was a stipend. So, I couldn’t plan for any financial goals back then. But, two to three years after joining Standard Chartered Bank, I started setting aside money for a contingency.

Then I started setting aside money for paying insurance premiums. I would keep some savings in fixed deposits (FDs) and invest regularly in Public Provident Fund (PPF) which was very popular at that point in time.

After about four years of working, I started thinking of financial goals a little more seriously. My first financial goal was to buy a house.

Also read: Two investments that women should urgently get rid of

What was your first investment?

Being a banker, I started investing in something as simple as fixed deposits (FDs) and recurring deposits (RDs) in my mid-twenties. I used to set aside some amount of savings to invest regularly. In those days, mutual funds were not so popular. So, I had diversified my portfolio by investing in bank FDs, RDs, PPF, and insurance schemes.

Where do you invest now?

I strongly believe in having a balanced portfolio. My overall portfolio consists of equity, debt, sovereign gold bonds, recurring deposits, fixed deposits and (some) cash. I follow the principle ‘don't put all your eggs in one basket’.

I avoid physical assets and do not invest in cryptocurrency. My philosophy: if you don't understand it and if you can't manage it, you should not invest in that asset.

Do you manage your own investment portfolio or take financial advice from experts?

I take my own investment decisions. Having said that, I do take advice from my relationship manager, who helps me to review my portfolio at regular intervals.

What are the key lessons from your investment journey?

Be responsible: Keep track of the investments, due dates to pay insurance premiums, and maturity dates for fixed deposits, insurance policies, and other such investments.

To keep track, make an Excel spreadsheet. List out everything. Keep track of it, at least once a quarter.

It’s important to have a plan for re-investing the insurance proceeds and fixed deposits after maturity.

Today, I would encourage women investors to automate their investments. There are a lot more opportunities from the banking and fintech industry. For example, you can do a systematic investment plan (SIP) in mutual funds and invest in recurring deposits by auto debit from your savings account.

What investment advice would you like to give to independent working women?

First, take control of your financial decisions.

Second, start with a small investment, but start right away, recognise the power of compounding.

Third, learn how to make investments and reviewing of portfolio digitally.

Fourth, if you don't understand an investment asset, learn about it before investing, get clarifications, and then only decide to invest in it.

Be aware of what the risk-reward trade-offs are before investing in a particular asset.

How should women avoid falling into a debt trap?

I believe women should use credit cards judiciously. While spending using the credit card, make sure you have a budget and spend accordingly. Set aside money for a contingency before spending ambiguously using credit cards.

When you want to buy something that’s a bit expensive and beyond your budget, then buy it on your credit card, convert it into an EMI-based spend, so that you have control over the repayment.

It is fine to borrow the amount, but take the responsibility to repay it on time. This way, you will build up a decent credit score to apply for any loans from banks in future.